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Securities Exchange Set to Launch in January

Dec 13 , 2024

The Ethiopian Securities Exchange (ESX) is set to launch its first trading market in mid-January, 2025, promising to reshape the country’s financial ecosystem. Located on the 18th Floor of the Nile Building in Addis Abeba’s financial district, near Nib International Bank, on Abebe Aregay (Ras) St., the new marketplace has cleared a key regulatory requirement after the Ethiopian Capital Market Authority (ECMA) last week issued operational licenses covering both conventional securities exchange trading and over-the-counter activity.

Officials say the opening will advance the nascent capital markets beyond interbank operations, already active for a month, toward the trading of government treasury bills and corporate bonds. The most anticipated component, a full-fledged stock exchange, is expected to follow, allowing companies to become publicly listed. Ethio telecom, currently floating shares through an initial public offering (IPO) in the primary market, plans to begin trading on the secondary market in a few months, according to Chief Operations Officer (COO) Michael Habte.

According to Tilahun Kassahun (PhD), the Exchange’s chief executive officer (CEO), preparations required only about a year and included drafting rulebooks, adopting technology, and developing governance frameworks.

"Tilahun also disclosed that ESX is ready to launch broker members back office - a system that manages the administrative and operational tasks of a brokerage firm - as well as an order management system, a tool to track the trend of orders."

Investors have responded with substantial capital for ESX's establishment, well above the initial requirement, securing 1.51 billion Br in subscribed capital and 800 million Br in paid-up capital. The Exchange counts 17 institutional investors, including the federal government, which holds a 25pc stake through the Ethiopian Investment Holdings (EIH), a sovereign fund that manages state-owned enterprises. Firms under its supervision chipped in 275 million Br, while international backers such as FSD Africa, the Trade & Development Bank Group, and the Nigerian Exchange Group also took part in the making of the capital market.

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