Ethio telecom Stock Doubles as Sellers Stay Away

Jul 7 , 2026. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

Ethio telecom declared a 9.67 billion Br dividend for the financial year ending June 2024, a 50.9pc payout ratio, with future state-backed transition rules targeting a 70pc payout structure through the Ethiopian Investment Holdings (EIH). A structural pressure point has emerged for secondary-market buyers, as new shareholders are excluded from receiving dividends for the fiscal year ending July 2025. The 12 billion Br dividend allocation was distributed entirely to the federal government, with retail buyers paying premium market rates, waiting until the 2025/26 cycle for capital distribution.

Ethio telecom's shares have climbed to 852 Br in Ethiopian Securities Exchange (ESX), 143pc above the 300 Br offer price set at its landmark debut at the Skylight Hotel in May this year, as strong retail demand continues to outpace limited supply.

The move has nearly doubled the listing price within weeks, not because the company's story has changed but because too few holders are willing to sell.

Trading opened with modest movement across the banking and telecom counters. Yet, a shortage of sellers opened a persistent price gap, with retail buyers pushing the stock up in increments of five to 10 Br. In a market this young, the price is being set less by valuation than by scarcity, and Ethio telecom has become the test case for both the promise and the fragility of early equity trading.

The company reached the public through a landmark initial public offering (IPO), in which the government floated 10pc of its shares. The sale raised 3.2 billion Br from 47,377 investors, who took up nearly 10.7 million ordinary shares. The proceeds fell short of the government's 30 billion Br target, but executives cast the turnout of nearly 47,000 citizens as a milestone for an emerging capital market.

The latest surge follows four weeks of heightened volatility, during which the total market capitalisation of traded firms passed one billion Birr. Liquidity was lifted by Awash Bank's share sale and by the Ethiopian Capital Market Authority's (ECMA) Investors Day, which drew younger buyers.

Expectations around Ethio telecom's performance report and its move to a share company have tightened supply further, as holders keep their positions in anticipation of higher prices.

Abreham Terecha, CEO of Gadaa Securities, calls it a "hyper-demand" environment driven by retail speculation rather than institutional activity.

“The absence of institutional sellers has let small orders push the stock past 700 Br toward 800 Br, after earlier incremental buying carried it to about 711 Br,” he told Fortune.

He believes that rising awareness, aggressive promotion, and greater use of technology among younger investors have reinforced holding rather than selling.

“With almost everyone buying and almost no one selling, each small trade resets the price higher,” Abreham said.

Rapid appreciation has exposed operational bottlenecks. Brokers report delays in verifying ownership before executing sell orders. Gadaa Securities has to confirm holdings with Ethio telecom before forwarding transactions to the Central Securities Depository (CSD), thereby slowing settlement.

Ethio telecom's Chief Communication Officer, Messay Woubshet, disclosed that the dematerialisation of shares is almost complete, and that the delays “come largely from incomplete documentation submitted by shareholders” rather than any system failure. Internal teams respond within one business day, except on bulk submissions, with completed records synchronised with the CSD.

The company's financials continue to feed the optimism.

Ethio telecom’s revenue from customer contracts surged from 59.4 billion Br in 2022 to 91.4 billion Br two years later, a 54pc gain, led by telecom services, which accounted for 95.9pc of the total. The mobile money service, Telebirr, grew rapidly, reaching 47.5 million subscribers and increasing revenue from 6 million Br to 2.3 billion Br over the period.

Average mobile voice subscribers reached 72.6 million in 2024, and data revenue grew at a 20.5pc compound annual growth rate (CAGR) in the two years beginning in 2022. The spread of 4G coverage to 424 cities and a 5G pilot in Addis Abeba and Dire Dawa supported the growth, while infrastructure sharing generated 1.47 billion Br in 2024 under the 2022 agreement with Safaricom.

Dividend expectations add to the pull. As a public enterprise, Ethio telecom transferred 60pc of net profit to the government. After its transfer to the Ethiopian Investment Holdings (EIH), it is expected to pay out 70pc as dividends and retain 30pc for operations and investment. For the year ended June 2024, it declared a 9.67 billion Br dividend, a 50.9pc payout ratio.

The conversion into a share company on July 1, 2024, enabled the IPO and a future listing on the Ethiopian Securities Exchange (ESX), and set authorised capital at 100 billion Br, divided into one billion shares of 100 Br each. After the 10pc sale, EIH keeps 90pc ownership and control of strategic direction.

Attention has turned to a General Assembly scheduled for September to November this year, as investors await the ESX opening. Debate centres on dividends, since new shareholders will not receive a payout for the fiscal year ending July 2025 despite record revenue of 162 billion Br, and the 12 billion Br dividend for the previous year went solely to the federal government.

This leaves the new buyers, who have paid the steepest prices, waiting a year or more for their first payout, a gap between price and reward that sits at the centre of the debate. At the listing, Chief Executive Officer, Frehiwot Tamiru, said dividends would begin in the 2025/26 financial year, with audit results expected in August and the General Assembly to confirm the dividend policy.

According to Andualem Hailu (PhD), CEO of Awash Capital Investment Bank, Ethio telecom shares remain accessible compared with other securities, even after the surge. He disclosed that retail demand for Ethio Telecom at Awash capital had ranged from 30 to 3,000 shares, and the removal of investor caps may have widened participation in Ethio telecom.

Elsewhere, the market has been quiet. Bank stocks have held steady despite strong earnings or governance changes, with Awash Bank's results barely moving its price and Abay Bank's board changes leaving little mark.

Activity has slowed, too, as last week brought 146 trades across five companies, involving 6,847 shares worth 12 million Br, down from 149 trades and 14,595 shares worth more than 31 million Br the week before.

Activity had peaked during Awash Bank's share sale, with 279 trades and more than 350,000 shares changing hands for over one billion Birr. In early June, 114 trades moved 10,147 shares worth 18 million Br. At the close, Abay Bank was 1,800 Br, Wegagen 1,300 Br, Awash Bank 2,955 Br and Gadaa Bank 1,165 Br.

Observers are divided over whether the rally rests on fundamentals or on speculation.

Yoseph Alemayehu, an academic and financial-systems practitioner with experience in accounting, financial reporting, and International Financial Reporting Standards (IFRS), argued it is the latter, pointing to the muted reaction to earnings elsewhere, while Ethio telecom climbed on the expectation of continued gains.

“Many investors are trading without reading prospectuses or applying valuation tools, when share value should rest on capital gains and sustainable dividends, tested against debt, equity structure and profitability,” he said.

He noted that Ethio telecom has paid no dividend to private shareholders and earns less than several domestic banks despite its dominance, and warns that unchecked speculation could erode market confidence if investors take losses without grasping the risks. He called on regulators and market actors to do more to educate investors on both risk and opportunity.

As the nascent capital market takes shape, Ethio telecom remains its central reference point, carrying the promise and the fragility of early trading. Strong revenue growth, digital expansion and dividend hopes sustain the optimism, but a price this high leaves little room for disappointment.

For now, limited supply and strong retail demand keep the momentum going, making it the most closely watched equity in the country's market.

PUBLISHED ON Jul 07,2026 [ VOL 27 , NO 1366]