Wealth Wednesday - Navigating the Dynamics of Nigerian and Global Markets Amid Rising Uncertainty
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Market Overview
Good evening and welcome to today’s market wrap up. Nigeria's bond yields rose after a cautious auction, while oil production hit a six-month high. MTN and Airtel are expanding into cloud and AI, and pension reforms may boost infrastructure investment. Cocoa exports surged, and a ban on raw shea nut exports aims to support local processing. Most NGX indices fell, though year-to-date performance remains strong. Globally, U.S. bond yields climbed amid Fed tensions. India faces trade pressure from new U.S. tariffs. Natural gas and cocoa prices rose, gold dipped, and the dollar strengthened as European economic sentiment weakened.
Nigerian News & Market Update
Nigerian Bond Yield Rises as Auction Triggers Reactions:
FGN bond yields rose on Tuesday, August 26, 2025, after the latest Debt Management Office (DMO) auction, with the average yield climbing 19bps to 16.89% due to sell-offs in mid-tenor bonds. Short- and mid-term papers saw the biggest moves (FEB-2028 up 113bps, APR-2032 up 19bps), while the long end stayed flat. The DMO allotted ₦136.2billion, below the ₦200billion offered, signaling reluctance to push yields beyond the 18% ceiling. Market activity was thin, with wide bid-offer spreads reflecting cautious investor sentiment. - dmarketforces
Nigeria’s oil output hits six-month high in July:
Nigeria’s crude oil output rose to a six-month high in July 2025, averaging 1.507 million bpd (1.712 million bpd including condensates), slightly above June levels and exceeding its Organization of the Petroleum Exporting Countries (OPEC) quota for a second month. Production peaked at 1.8 million bpd, driven by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)’s Project 1 Million Barrels of Oil Per Day (MMBOPD) Incremental initiative and measures to optimise efficiency and reduce disruptions. This marks a steady recovery in Nigeria’s oil sector after earlier declines. - BusinessDay
MTN and Airtel’s Push into Cloud & AI Sets Stage for Market Revaluation:
Nigeria’s stock market is buzzing as MTN Nigeria and Airtel Africa shift from telecom competition to a battle in cloud computing and AI. MTN launched its Dabengwe Data Cloud, while Airtel is building a 38MW hyperscale data centre. With MTN trading at ₦435 and Airtel at ₦2,310.50, MTN offers more liquidity and affordability, making it attractive for investors. Both firms’ push into digital infrastructure could revalue them as tech leaders, with early investors likely to benefit from future price gains. - dmarketforces
FG to channel $17billion pension assets into infrastructure, equity:
Nigeria’s pension regulator (PenCom) is set to ease rules capping pension investments in infrastructure and private equity at 5%, allowing more diversification beyond fixed income, which makes up 62% of assets. The move, driven by high inflation and naira depreciation, aims to boost returns for retirees and support national development. Pension assets have grown to ₦22.51trillion, with ₦5.51trillion already invested in alternative sectors. - TheSun
President Tinubu Orders Immediate Ban Of Raw Shea Nut Export:
Nigeria has imposed a six-month ban on raw shea nut exports to boost local processing, create jobs, and curb informal trade. The policy aims to transform Nigeria from mainly exporting raw nuts to becoming a global supplier of refined shea products, with expected short-term earnings of $300million and significant growth by 2027. It will also empower rural women, raise processors’ capacity, and help Nigeria capture more of the fast-growing $6.5billion global shea market. - Channels
Nigeria’s Q1 cocoa exports soar to ₦1.23trillion:
Nigeria’s cocoa export revenue hit a record ₦1.23 trillion in Q1 2025, up 220% YoY, thanks to soaring global prices and stronger volumes. The windfall boosts FX inflows, narrows the current account deficit, and supports rural economies, but risks remain due to aging trees, poor financing, and infrastructure gaps. Global cocoa prices are expected to stay volatile, with a 2025 surplus likely to ease prices. - TheNation
Nigeria Sectoral Indices Performance
The table below shows that most NGX sector indices declined today, led by the Insurance Index (-3.42%). Only the Oil/Gas Index posted a gain (+0.18%). Despite the daily losses, year-to-date performance remains strong across most sectors, especially Insurance (+80.76%), Lotus (+65.59%), and Consumer Goods (+47.11%). The only sector in negative territory for the year is Oil/Gas (-11.73%).
Fixed Income (FGN Bonds)
Global News & Market Update
Long-term yields keep rising as Trump amps up fight for Fed control:
U.S. Treasury yields climbed as Trump’s removal of Fed Governor Lisa Cook sparked concerns about Fed independence and inflation control. The 30-year yield hit 4.95% and the 10-year 4.28%, while short-term yields dipped. Cook is suing Trump over the firing, and analysts warn the situation could trigger bond market unrest. Markets now await U.S. Gross Domestic Product) (GDP) data and the Personal Consumption Expenditures (PCE) inflation report for economic direction. - CNBC
India’s Russian oil gains wiped out by Trump’s tariffs:
India saved $17billion from discounted Russian oil, but new U.S. tariffs up to 50% could cut its exports by $37billion, threatening jobs in textiles, gems, and jewellery. The move strains U.S.-India ties, even as New Delhi balances reliance on cheap Russian oil (40% of imports) with strategic ties to Washington. Analysts warn halting Russian oil could push global crude to $200/bbl and spike Indian fuel prices. Modi faces political pressure at home, while competitors like China, Vietnam, and Mexico may benefit from India’s trade losses. The standoff risks pushing U.S.-India relations to their lowest point since 1998 sanctions. - Reuters
Gold slips as dollar, yields gain; PCE data in focus:
Gold slipped 0.4% to $3,379.76/oz as a stronger U.S. dollar and rising Treasury yields pressured prices, though safe-haven demand limited losses amid concerns over Trump’s bid to fire Fed Governor Lisa Cook. Investors await key U.S. GDP and PCE inflation data for rate-cut signals, with markets pricing a 90% chance of a September Fed cut. Silver, platinum, and palladium also declined. - Reuters
Russia slashes 2025 economic growth forecast to 1.5% from 2.5%:
Russia’s economy is slowing, with 2025 growth now forecast at 1.5%, down from 2.5%, as high interest rates (18–21%) curb borrowing and labor shortages bite. Despite strong wartime growth of over 4% in 2023–24, GDP expanded just 1.1% in Q2 2025 versus 4% a year earlier. Military spending is fueling inflation, forcing tighter monetary policy, while manufacturing and industrial output forecasts have also been cut. The IMF projects only 0.9% growth in 2025, suggesting Moscow may need to raise taxes and cut spending to stabilize its wartime economy. - Reuters
Dollar rebounds with focus on Fed policy as French politics cloud euro:
The U.S. dollar strengthened on Wednesday, with the euro falling to its weakest since August 6 as investors looked ahead to key U.S. economic data and a likely September Fed rate cut (88% probability). Despite Trump’s attempt to fire Fed Governor Lisa Cook, markets focused more on expectations for lower rates. Political uncertainty in France weighed slightly on the euro, though analysts see limited broader impact. Meanwhile, UK producer price inflation hit a two-year high (1.9%), signaling persistent inflation pressures. Investors now await U.S. PCE inflation data and upcoming labor reports for policy cues. - Reuters
German consumer sentiment dips in September on job loss concerns, finds GfK:
German consumer sentiment is set to weaken for the third straight month in September, with the GfK index falling to -23.6 from -21.7 in August, worse than expected. The decline is driven by lower income expectations, rising job-loss fears, and inflation worries, amid a sluggish economy and creeping unemployment nearing 3 million people. Willingness to buy also fell to its lowest since February, while economic expectations dropped. Germany’s economy shrank 0.3% in Q2, dimming recovery hopes. Retailers have urged Chancellor Merz to provide targeted relief for households and avoid tax hikes. - Reuters
UK producer price inflation rises to two-year high in June:
UK producer output price inflation rose to 1.9% in June, the highest in two years, up from 1.3% in May, signaling stronger inflationary pressures. The ONS had paused PPI data earlier due to calculation errors but resumed with interim figures, also revising past data slightly upward. Input prices fell 1% year-on-year, mainly due to a 24% drop in crude oil and gas costs. Despite this, consumer inflation remains high, with CPI hitting 3.8% in July and expected to reach 4% in September, keeping pressure on the Bank of England’s policy outlook. - Reuters
Indices, Commodities & Currencies
The table below depicts that the markets were mixed overall. U.S. indices rose slightly, while European and Asian markets fell. Energy was strong, especially Natural Gas, while metals and grains mostly declined. Cocoa surged, but Orange Juice dropped sharply. In currencies, the USD, JPY, and NZD gained, while the EUR and GBP slipped.
Fixed Income (USA Bonds)
Events
Conclusion
Markets face growing uncertainty with rising Nigerian bond yields and pension reforms potentially shifting investments toward infrastructure and equities. MTN and Airtel’s tech focus may create new digital opportunities, while improvements in cocoa and oil boost Nigeria’s outlook despite ongoing risks. Globally, investors will watch U.S. inflation and GDP data for Fed signals amid trade tensions and inflation in Europe and the UK. Staying flexible and attentive to rate changes and sector trends will be key.
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