A seat at the Ethiopian Commodity Exchange (ECX) has attracted a record high offer after a businessman bid eight times higher than the threshold value set by the Exchange.
Kebede Belema has placed 8.15 million Br for an intermediary membership seat with the ECX during an auction held on November 2, 2021. Held at the headquarters of the ECX, on Chad Street near Mexico Square, 93 bidders showed up to secure 30 intermediary seats. These seats allow members to trade on their own account and at the behest of clients, unlike trading seats that let members trade only on their accounts.
Both kinds of membership seats can be transferred three years after acquiring. The Exchange has 366 member seats and trades 15 agricultural products.
The last time the ECX offered seats was in 2018, when the highest bid was recorded at 3.5 million Br.
The ECX offering seats for buyers indicates it has plans to increase the trading volume and include additional commodities on its trading floor, observes Anwar Mohammed, an expert who specialises in the commodity market. It has plans to incorporate four spices into its trading platform, according to people familiar with the Exchange market.
The ECX facilitated the trading of 614,586tn of commodities worth 39.6 billion Br last year.
Traders at ECX transacting through intermediary members pay a maximum brokerage fee of two percent of the trade value.
The value of the seats had increased considerably from the initial bidding price of 50,000 Br when the ECX first floated seats 14 years ago. Bidders for intermediary seats have to provide proof of assets valued at one million Birr and deposit 100,000 Br required in a bid bond.
Owning a seat helps exporters reduce the costs associated with trading at the Exchange, according to Bahiru Awol, a major shareholder of Bezhan Trading Plc. A company engaged in importing building materials and the export of coffee, Bezhan Trading had been supplying coffee to the ECX through intermediary members.
Bezhan Trading has made the second-highest offer for an intermediary seat at 8.12 million Br.
The third-highest offer, 7.1 million Br, was put forward by Mihret Aseres, a businessperson. The lowest bid was 3.8 million Br.
For Anwar, who has consulted five companies on the auction, the latest offers are not as high as he had expected.
PUBLISHED ON
Nov 06,2021 [ VOL
22 , NO
1123]
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