Nigeria’s headline inflation has been on a downward trend for a few months. Signals of disinflation emerged when headline inflation moderated from 24.23% in March 2025 to 23.71% in April 2025. The declining trend was sustained until it fell to 18.02% in September 2025, the latest data from the National Bureau of Statistics (NBS) shows.
One of the factors that prompted the CBN to reduce the Monetary Policy Rate (MPR) by 50 basis points from 27.50% in August 2025 to 27.00% in September was the declining inflationary pressures.
CBN Governor, Olayemi Cardoso, said: “The Committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025 and the need to support economic recovery efforts.”
The disinflationary trend coincided with the rising returns in the equity market. From April 2025 when the All Share Index (ASI) was 2.79%, market return gradually rose to 38.65% as of September 2025.
In the fixed income market, Treasury bill yields are declining. The yield on the short tenor declined from 17.85% in June 2025 to 17.0% on 15 October 2025. The yield on mid-tenor fell from 20.83% to 17.33%, while the tenor on long term similarly fell from 21.65% to 17.96% during the same time.
The yield on the bond due January 2026 fell from 19.90% as of June 30 to 16.84% on October 15. Similarly, the yield on the bond due March 2027 declined from 18.64% as of June 2025 to 16.03% as of October 15, 2025.
The rising return in the Nigerian equity market provides a better alternative for investors even if there is a further rate cut in the benchmark interest rate, MPR, by the CBN, which its body language has suggested.
The All-Share Index (ASI) as of October 16, 2025 recorded 44.14%. Interestingly, over 75% of equities listed on the NGX have outperformed the ASI, with some equities still having a buy recommendation placed on them by many investment houses.
The outperformers among the equities include Beta Glass, 648.84%; Mutual Benefits Assurance, 526.23%; The Initiates, 460.00%; Chelerams, 339.19%; EllahLakes, 320.89; Champion Breweries, 319.95%; UPDC, 299.37%; VitaFoam, 267.39%, and Honeywell Flour, 251.59%.
*The Brook Securities Limited is based in Lekki Phase 1, Lagos State.
