OIL, RATES AND NAIRA SHAPE NIGERIA’S Q3 MARKET OUTLOOK

Nigeria’s financial markets are entering a period in which oil prices, monetary policy and movements in the naira are expected to remain important drivers of investor activity.

Analysts at Coronation Asset Management said global geopolitical developments and changing monetary policy signals would continue to influence major asset classes as companies begin releasing their third-quarter results.

On the Nigerian Exchange, investors are expected to focus more on individual companies and their financial performance following recent profit-taking that pushed the All-Share Index down by 0.52 per cent to 250,808.27 points.

Brent crude prices have risen above $100 per barrel amid tensions in the Middle East and risks around shipping routes. Higher oil prices could support Nigeria’s government revenue and foreign exchange reserves, although they could also add pressure to transportation costs and inflation.

The naira has shown greater stability, supported by improved foreign exchange conditions and stronger external reserves.

Coronation expects the naira to remain broadly stable in the near term, with the NFEM rate projected around N1,300 to N1,350 per dollar, barring major external shocks.

The analysts also expect short-term government securities yields to gradually ease as liquidity remains strong and investors respond to recent monetary policy changes.