Wealth Wednesday - Navigating Nigerian Economic Reforms Amid Global Inflation and Market Uncertainty
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Market Overview
Good evening and welcome to today’s market wrap up. Today’s update reflects a dynamic blend of domestic policy shifts, global inflation signals, and evolving investor sentiment. From Nigeria’s telecom tax relief and banking recapitalisation efforts to rising global oil flows and inflation pressures, markets are responding to a complex web of economic indicators.
Nigerian News & Market Update
DMO to re-issue ₦230billion NTBs as yields rise:
The Debt Management Office (DMO) will re-issue ₦230 billion in Treasury Bills on August 20 to refinance maturing debt. While last week's Nigerian Treasury Bills (NTB) market was bearish due to tight liquidity, upcoming inflows are expected to boost demand. Analysts anticipate stronger interest and potentially lower stop rates, especially for the popular 364-day bill. Despite tight CBN policy, high yields remain attractive for investors hedging against inflation and currency risks. - TheSun
Tinubu scraps 5% telecom excise duty in new tax law:
The Federal Government has scrapped the 5% telecom excise duty to reduce costs and support industry growth. The Nigerian Communications Commission (NCC) is implementing reforms to improve transparency, consumer protection, and network performance. Recent audits found no billing fraud, with data issues linked to device settings. Nigeria has 141 million internet users and 105 million broadband users. - TheSun
Banks Raise ₦2.5trillion Ahead Of Recapitalisation Deadline:
Nigerian banks have raised ₦2.5 trillion, mainly from local investors, to meet the Central Bank of Nigeria (CBN)’s new capital requirements before the March 2026 deadline. Industry assets are projected to reach ₦242.3 trillion by year-end. Despite funding pressures and rising non-performing loans, liquidity remains strong. Profitability is expected to decline in 2025 but recover in 2026 as capital is deployed and loan impairments stabilize. - Leadership
Nigeria’s oil worth ₦341trillion locked in undeveloped fields:
Nigeria has over 3.5 billion barrels of undeveloped oil and 18.8 trillion cubic feet of untapped gas reserves, worth around $227.5 billion. Many oil blocks remain unlicensed or dormant despite growing debt and crude shortages. Authorities urge faster development and regular licensing to attract investment, warning that idle blocks may be reclaimed and reassigned to boost production. – Punch
SEC, NAICOM partnership boosts insurance recapitalisation:
The National Insurance Commission (NAICOM) and The Securities and Exchange Commission (SEC) have agreed to strengthen collaboration to support Nigeria’s insurance sector recapitalisation, following the recent signing of the Nigeria Insurance Industry Reform Act 2025. SEC pledged technical support, while both agencies emphasized digitalisation and reforms to boost industry growth and efficiency. - Punch
Nigeria Sectoral Indices Performance
The table below shows that most NGX sector indices declined in the short term (1-Day and WTD), with the Insurance Index dropping the most. However, year-to-date (YTD) performance remains strong across most sectors, led by the Insurance, Lotus, and Industrial Goods indices. Only the Oil/Gas sector is negative YTD.
Fixed Income (FGN Bonds)
Global News & Market Update
UK inflation rises to highest since early 2024 at 3.8%:
UK inflation rose to 3.8% in July, the highest in 18 months, driven mainly by airfare and service costs. With services inflation at 5%, the Bank of England is expected to delay further interest rate cuts until 2026. Inflation remains well above the 2% target, making it the highest among major economies, partly due to labour market pressures and rising wages. - Reuters
Sanctions-hit Indian refiner Nayara turns to dark fleet, tanker data shows:
India’s Nayara Energy, partly owned by Russia’s Rosneft, is using EU-sanctioned “dark fleet” vessels to import Russian oil and export fuels after facing shipping and insurance issues due to EU sanctions. The company has reduced refinery operations to 70–80% capacity and is seeking government support, while Russian entities are helping with logistics. Despite challenges, Nayara continues operations within India’s sanction rules, which only follow UN not unilateral sanctions. - Reuters
Dollar falls as Trump calls on Fed's Cook to resign:
The U.S. dollar dipped after Donald Trump called for Fed Governor Lisa Cook’s resignation over fraud allegations, sparking concerns about political interference. Markets await Fed Chair Powell’s speech for rate cut signals, with expectations still high for a September cut. The New Zealand dollar fell after a rate cut, while Sweden kept rates unchanged. Bitcoin also edged lower. - Reuters
China's July fuel oil imports climb to seven-month high:
China's fuel oil imports rose by 40% in July to 1.96 million metric tons, the highest in seven months, driven by lower prices and increased tax rebates for independent refineries. Imports were also 42% higher year-on-year. Meanwhile, exports of low-sulphur marine fuels dropped 37% from June and 13% from a year earlier. The rebound in imports reflects improved demand as fuel oil became a more economical alternative to crude. - Reuters
Canada's annual inflation rate eases to 1.7% in July boosting some hopes of rate cut:
Canada’s inflation rate dropped to 1.7% in July from 1.9% in June, mainly due to falling gasoline prices. Core inflation also eased, raising hopes for a rate cut in September. However, food and shelter costs continued to rise. Markets responded by increasing the odds of a rate cut, while the Canadian dollar weakened slightly. - Reuters
Indices, Commodities & Currencies
The table below depicts that the markets were mixed. Major stock indices fell, led by Nikkei and NASDAQ, while volatility (VIX) rose. Oil prices climbed, but metals and cocoa dropped. Grains mostly gained, though soybean oil plunged. The U.S. dollar slipped, with modest moves in other currencies.
Fixed Income (USA Bonds)
Events
Conclusion
Looking ahead, Nigerian markets may benefit from improved liquidity as NTB inflows return, while tax relief and sector reforms could support telecoms, insurance, and banking stocks. However, persistent inflation and policy tightness may limit near-term gains. Globally, expectations of delayed rate cuts (UK), political tension in the U.S., and commodity volatility will likely keep markets cautious. With energy prices rising and central banks watching inflation closely, investors should prepare for continued market swings and focus on sectors resilient to policy and macro shocks.
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