Markets are braced for the Fed’s next move. A cut would cheapen dollars, revive global carry, and pull capital toward high-yielding markets like Nigeria. If U.S. rates come down, the dollar weakens and global investors turn to carry trades, borrowing cheap in the U.S. and investing in higher-yielding markets. Nigeria is one of the few places where both equities and bonds still pay handsomely which is our edge.
A U.S. cut narrows the gap between Treasuries and Nigerian bonds, making naira assets attractive for foreign inflows. If money returns, pressure eases on the currency and on local funding conditions.
The MPC would have room to lean dovish without destabilizing the naira. Domestic yields drift lower, government borrowing costs fall, and credit expansion picks up.
The financial markets would feel it quickly. In fixed income, demand would compress FGN yields as investors chase high coupons, pushing bond prices higher. In the capital markets, equities would see fresh flows into liquid names, with banks leading the rally. Industrials would benefit from cheaper import costs if the naira firms, while energy names remain a hedge if global demand strengthens. The ripple is simple: a Fed cut filters through Nigeria’s financial system as stronger capital flows, lower yields, and re-rated equities.
Against that backdrop, for equities the cleanest trade is in Tier-1 banks. GTCO at ₦92, Zenith at ₦69, and Access at ₦25.9 are liquid Tier-1 names with strong dividend appeal; the focus here is dividend capture rather than deep value. This is positioned as a dividend-capture trade: buying ahead of interim ex-dates to collect projected ₦1.00 cash dividends and a modest rerating if flows return.
On interim capture math, realistic total returns are 1– 4% from dividends,10 –15% from price moves and 11–19% combined. This confirms the strategy delivers close to 20% upside and offers steady income while investors wait. If flows stall, the dividend carry alone still rewards patience.
On the bond side, Mid-tenor FGNs yielding 16–18% offer a strong carry trade. If foreign inflows return and push yields lower, these bonds will reprice at a premium, boosting total returns beyond the coupon. If flows don’t materialize, investors still lock in reliable double-digit income from carry alone. In a world of thinning yields, Nigeria could be the place that still pays
