Nigerian equities recorded some volatility at the start of the week, with the NGX All Share Index opening lower on Monday before recovering.
The recent upturn in crude prices, driven by escalating geopolitical tensions in the Middle East, could provide Nigeria with stronger export receipts and the potential for improved foreign exchange inflows if the surge persists.
However, the broader equity market response remains cautious, reflecting concerns about the sustainability and transmission of these gains.
At the same time, a rise in global energy costs is expected to push up domestic fuel, diesel, and gas prices, with knock-on effects for transportation and production costs across key industries. This could compress corporate margins and dampen performance in sectors with tight operating budgets.
Recent trade data reveal underlying structural fragilities in the Nigerian economy. Manufactured exports declined significantly, while imports of finished goods and raw materials expanded markedly. While the oil and gas sector may benefit from stronger earnings and investor interest, the broader outlook for Nigerian equities remains vulnerable to near-term volatility.
