RFA Breakfast Paper - July 1, 2026
Nigeria's Private Sector Expansion Slows Slightly as Business Confidence Hits One-Year High
The Stanbic IBTC Bank Nigeria PMI for Nigeria eased to 53.4 in June 2026 from 54.1 in May, indicating that private sector activity continued to expand, albeit at a slower pace, as the index remained comfortably above the 50-point threshold. Growth in output and new orders moderated from the previous month, with manufacturing emerging as the only broad sector to record a decline in business activity. Nevertheless, resilient customer demand and new product launches
continued to underpin solid increases in sales and overall business activity. Stronger demand also encouraged firms to expand employment, purchasing activity, and inventories, with staffing levels rising for a thirteenth consecutive month and hiring accelerating to its fastest pace since February. On the price front, input costs and selling prices remained elevated, reflecting persistently high fuel, raw material, and transportation costs. Looking ahead, firms became
increasingly optimistic, with business confidence climbing to its highest level since June 2025, supported by expansion plans, increased advertising, and inventory accumulation despite ongoing cost pressures.
U.S. Stocks Begin the Month Lower as Technology Weakness Weighs on Sentiment
U.S. equities started the month on a weaker note on Wednesday as renewed selling in technology stocks pressured broader market performance. Treasury yields moved higher, with the 10-year U.S. Treasury yield rising to around 4.49%, while the U.S. dollar strengthened against major currencies. Meanwhile, WTI crude oil remained below $70 per barrel, giving up most of the gains recorded during the Strait of Hormuz disruption. Lower oil prices continued to support the outlook for moderating inflation and improving consumer purchasing power, although geopolitical developments remain a source of market uncertainty. The June ADP employment report showed private-sector payrolls increased by 98,000, below both May's revised gain of 122,000 and market expectations of 110,000. Hiring remained strongest in education and health services, trade,
transportation and utilities, and financial activities, while annual wage growth held steady at 4.4%, reflecting continued strength in household income. The report points to a gradual cooling in hiring rather than a weakening labor market, with investors now awaiting Thursday's official employment report for further clues on the economy and the outlook for interest rates.
NGX Opens the Month Lower as Profit Taking Reverses Previous Gains
The Nigerian equity market opened the month in bearish territory as renewed profit-taking in medium- and large-cap stocks erased the modest rebound recorded in the previous session. Selling pressure was broad-based, extending across the major market sectors and reflecting cautious investor sentiment at the start of the new month. The Oil & Gas and Industrial Goods sectors led the declines, falling 4.41%s and 3.65%, respectively, as investors continued to take
profits following recent price appreciation. Consequently, the NGX All-Share Index (ASI) declined by 3,729.11 basis points, or 1.63%, to close at 225,690.07, while market capitalization shed ₦2.39 trillion, also falling 1.63% to settle at ₦144.82 trillion. Trading activity also slowed considerably, underscoring the cautious mood in the market. Total trading volume declined by 49.50% to 488.12 million shares, while the value of transactions fell 65.09% to ₦13.96 billion across 46,929 deals.
The sharp decline in both market performance and trading activity suggests investors adopted a wait-and-see approach while locking in gains from recent rallies. Going forward, market sentiment is likely to remain driven by bargain-hunting opportunities, corporate fundamentals, and broader macroeconomic developments that could influence investor confidence.
