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Nigerian equities opened flat on Thursday, with electronic technology and health technology outperforming.
The market could benefit from President Bola Tinubu’s directive to review deductions and revenue retention, which aims to release public funds for investment and boost growth.
With a target of 7% annual growth, the administration is promoting a push for investment-led expansion. This approach could support equities in the long run.
Nigeria’s trade diversification could also support the market. Expanding exports to Brazil, China, Japan, and the UAE could reduce reliance on the US market and help offset the impact of the recent 15% US import tariff. Oil production rose to 1.507 million barrels per day in July, above OPEC targets, although low global oil prices could limit the positive impact on the energy sector.
Looking ahead, market participants are awaiting the July inflation data on Friday. Annual inflation eased to 22.22% in June, the softest since April 2023, but core inflation edged up to 22.76%, pointing to persistent underlying price pressures. While softer headline inflation may provide some support to domestic equities, ongoing price pressures could affect consumer spending and corporate margins.
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