RFA Breakfast Paper - May 21, 2026
Egypt Holds Rates at 19% Amid Renewed Inflation Pressures
The Central Bank of Egypt kept its benchmark interest rate unchanged at 19% during its May 2026 meeting, in line with market expectations, as policymakers weighed rising inflation risks against a softer growth outlook in Egypt. The decision followed an acceleration in headline inflation to 13.4% in February from 11.9% in January, while core inflation rose to 12.7% from 11.2%, driven by higher education costs and seasonal food price increases during Ramadan. The central bank warned that elevated global energy and agricultural prices, exchange-rate volatility, and ongoing fiscal reforms could slow the disinflation process and threaten its inflation target for Q4 2026. At the same time, Egypt lowered its FY2025/26 GDP growth forecast to 4.9% from 5.1%, citing weaker external demand and heightened regional tensions. Policymakers also highlighted broader global risks, noting that geopolitical conflicts and supply-chain disruptions continue to sustain inflationary pressures while weighing on global growth prospects.
U.S. Equities Advance as NVIDIA Earnings Reinforce AI Optimism
U.S. equity markets closed higher on Thursday as investors reacted positively to strong corporate earnings and easing geopolitical tensions. NVIDIA reported better-than-expected first-quarter results, reinforcing optimism around sustained AI spending and strong demand for semiconductors, while Walmart posted solid quarterly sales despite issuing cautious forward guidance. Economic data also supported sentiment, with initial jobless claims holding steady at 209,000, signaling continued labor market resilience. Meanwhile, oil prices reversed earlier gains and settled lower amid growing optimism over a possible ceasefire agreement in Iran, while the 10-year Treasury yield edged down to 4.57%. Investor focus also turned toward renewed momentum in the IPO market following reports that SpaceX had publicly filed IPO paperwork for what could become the largest listing in history. Separately, OpenAI is reportedly preparing its own IPO filing, further strengthening enthusiasm around AI-related investments. The developments highlighted improving risk appetite in growth and technology sectors as investors continued positioning around the long-term AI theme.
Nigerian Equities Rebound as Bargain Hunting Supports Market Recovery
The Nigerian equity market closed slightly higher on Thursday, reversing part of the previous session’s weakness as investors returned to selectively accumulate medium-cap stocks across major sectors. Despite market breadth remaining negative, with decliners still outpacing gainers, renewed bargain hunting helped sustain positive momentum and signalled improving investor confidence. Consequently, the NGX All-Share Index advanced by 113.02 basis points, representing a 0.05% gain to close at 249,175.39 points. Similarly, market capitalization rose by ₦72.44 billion to settle at ₦159.73 trillion, also reflecting a 0.05% increase. The mild recovery suggests investors remain cautiously optimistic, particularly in fundamentally attractive names that continue to trade at appealing valuations following recent pullbacks. Trading activity was mixed during the session, highlighting a divergence between market participation and transaction value. Total traded volume surged by 76.39% to 1.06 billion units, indicating stronger market activity and improved liquidity across the exchange. However, the total value of trades declined by 5.35% to ₦30.97 billion, suggesting that investors concentrated more on lower-priced or mid-tier equities rather than large-ticket transactions. A total of 62,448 deals were executed during the session, reflecting sustained participation despite lingering caution in the broader market. Overall, the session’s performance points to a market that is gradually regaining stability, supported by selective buying interest and improving risk appetite among domestic investors.
