The National Bureau of Statistics released Nigeria’s August 2025 Inflation Report
The National Bureau of Statistics (NBS) released Nigeria’s August 2025 inflation report, showing more relief in price pressures. Headline inflation slowed for the fifth month in a row, easing to 20.12% in August from 21.88% in July. On a monthly basis, prices rose by 0.74%, a sharp moderation from the 1.99% increase in July, meaning prices grew at a slower pace.
Food inflation came in at 21.87% year-on-year, down significantly from 37.52% a year earlier, largely due to a base-year adjustment. On a monthly basis, food prices grew by 1.65%, compared to 3.12% in July.
Core inflation, which excludes volatile food and energy prices, was 20.33% year-on-year, lower than 27.58% a year earlier. However, on a monthly basis, core inflation picked up slightly to 1.43% in August from 0.97% in July. Breaking it down by location, urban inflation eased to 19.75%, while rural inflation stood at 20.28%, both far lower than their August 2024 levels.
Equities Update
Last week, the Nigerian stock market closed the week positive, with the All-Share Index rising 0.93% w/w to settle at 141,854.48 points.
Market capitalization increased to ₦89.74 trillion. However, trading activity slowed as total volume fell to 2.73 billion shares (vs. 3.19 billion last week) and value dropped to ₦83.58 billion (vs. ₦99.68 billion).
Sector performance was mixed
- Consumer Goods led the gainers, up 5.48% w/w, supported by strong rallies in GUINNESS (+28.60%) and BUAFOODS (+6.73%).
- Oil & Gas advanced 2.79% w/w, driven by ARADEL (+7.89%).
- Industrials inched up 0.05% w/w, lifted by demand in DANGCEM (+0.98%).
- On the downside, Insurance shed 4.67% w/w, dragged by losses in SUNUASSUR (-8.98%) and AIICO (-5.28%)
- Banking also eased by 2.57% w/w on declines in UBA (-9.24%), ZENITHBANK (-5.88 %), and ACCESSCORP (-3.36%).
Fixed Income Update
System liquidity eased, opening Friday at ₦1.67 trillion (vs. ₦1.95 trillion last week). Interbank rates were stable, with the OPR at 26.50% and Overnight rates dropping by 1bp to close at 26.95%At the NTB auction, the CBN/DMO offered ₦290 billion, but strong demand pushed subscriptions to ₦1.59 trillion. Only ₦345.01 billion was allotted, with stop rates falling across tenors:
- 91-day: 15.00% (-32bps)
- 182-day: 15.30% (-20bps)
- 364-day: 16.78% (-91bps)
In the secondary market, bond trading was quiet with slight selling pressure, pushing yields marginally higher. The 2-year and 3-year bonds rose to 17.24 (+9bps) and 16.99% (+9bps).
Meanwhile, NTB yields saw mixed moves:
- 182-day: 18.50% (-144bps)
- 364-day: 19.41% (-609bps)
- 91-day: 17.80% (+49bps)
What Will Shape Markets This Week?
Equities
The Banking sector remains the weak link, weighing on overall market sentiment. The key test will be whether long-term investors step in to scoop up these beaten-down stocks at attractive prices, which could stabilize the market.
Fixed Income
This week, we expect the bond market to trade cautiously as investors tilt their attention to the MPC meeting commencing today. We expect the MPC to cut rates by 25bps and still maintain a cautious stance against inflationary pressures. We think system liquidity will remain robust, supported by coupon inflows of approximately ₦257billion and possible FAAC credits within the week, except where the CBN steps in with an OMO auction to reduce the level of liquidity in the system.
