RFA Breakfast Paper - June 1
Nigeria PMI Climbs to Nine-Month High as Business Activity Strengthens
The Stanbic IBTC Bank Nigeria PMI rose to 54.1 in May 2026 from 52.4 in April, signaling the strongest improvement in private-sector business conditions since August 2025 and pointing to a solid acceleration in economic activity in Nigeria. The improvement was driven by faster growth in both output and new orders, as stronger customer demand supported business expansion. In response, firms increased purchasing activity and inventory accumulation, while supplier performance improved thanks to prompt payments, better coordination with vendors, and improved road conditions. Employment also continued to rise, extending a year-long trend of job creation, although the pace of hiring remained relatively modest. On the pricing front, elevated fuel costs linked to Middle East tensions continued to exert upward pressure on both input costs and selling prices. However, input cost inflation and output price inflation eased to multi-month lows, suggesting that cost pressures may be starting to stabilize despite remaining elevated. Business sentiment stayed positive, supported by expansion plans, new product launches, and expectations of stronger future demand. Nevertheless, confidence slipped to a one-year low as firms remained cautious about persistent cost pressures and broader economic uncertainty. Overall, the latest PMI reading points to continued resilience in Nigeria’s private sector despite a challenging operating environment.
U.S. Equities Advance as Technology Strength Overshadows Middle East Tensions
U.S. equities closed higher on Monday as investors looked past escalating geopolitical tensions in the Middle East and focused on renewed momentum within the technology sector. Market sentiment remained resilient despite uncertainty surrounding U.S.–Iran negotiations and reports that U.S. forces targeted Iranian radar and drone installations over the weekend. Technology stocks led the advance after NVIDIA unveiled a new semiconductor chip tailored for personal laptops, reinforcing optimism around continued innovation and demand within the AI ecosystem. The strong performance in large-cap technology names helped lift all three major U.S. indices into positive territory. Beyond technology, energy was the only other S&P 500 sector to finish the session higher, supported by rising crude oil prices amid ongoing regional tensions. WTI crude settled at $92 per barrel as investors monitored potential supply risks linked to developments in the Middle East. Meanwhile, Treasury yields moved higher as geopolitical uncertainty and inflation concerns prompted a cautious approach in fixed-income markets, with the 10-year U.S. Treasury yield climbing to 4.45%. Overall, the session highlighted the market’s continued preference for growth-oriented sectors, with technology-driven optimism outweighing concerns over geopolitical risks and higher interest rates.
NGX Opens June on a Weak Note as Profit Taking Pressures Key Sectors
The Nigerian equity market began the new month on a negative footing, with investors locking in gains across several medium and large-cap stocks. Selling pressure in the Industrial Goods and Banking sectors weighed heavily on sentiment, dragging the benchmark NGX All-Share Index lower by 1.13% to close at 247,560.66 points. As a result, market capitalization shed ₦1.81 trillion to settle at ₦158.70 trillion. The broad decline suggests investors adopted a cautious stance following recent market gains, leading to a wave of profit taking across major counters. Trading activity presented a mixed picture during the session. While the volume of shares exchanged fell by 6.38%, the value of transactions increased by 1.96%, indicating sustained interest in higher-value stocks despite the broader market weakness. Investors traded approximately 1.13 billion shares worth ₦44.28 billion across 91,880 deals. The rise in transaction value alongside lower volumes points to selective positioning in fundamentally strong names, even as the market adjusted lower. Overall, the session reflected a cautious start to June, with profit taking dominating market direction and overshadowing buying interest across most sectors.
