The Ethiopian Stock Exchange (ESX) is about to be launched. A new directive has been issued to establish Ethiopia’s first licensed stock exchange. The directive was issued this week by The Ethiopian Capital Market Authority (ECMA).
The ECMA was established in 2021, tasked with regulating the capital market through directives. The newly issued “Directive on the licensing, operation and supervision of stock exchanges, derivatives exchanges and the over-the-counter market No. 1009/2024” outlines the framework for the licensing and operation of stock exchanges and over-the-counter markets.
The directive paves the way for the Ethiopian Stock Exchange SC to officially commence operation, enabling the utilization of the Ethiopian Securities Exchange for selling shares and bonds. This exchange will serve as a hub for licensed trading activity and attract domestic and international investors.
“This directive consolidates the previously fragmented securities trading in Ethiopia into a single, licensed, and regulated market enhancing the sector’s contribution to stakeholders and the national economy. It also paves the way for the Ethiopian Securities Exchange S.C. to commence operations by granting an exchange license,” the new directive states.
ESX earlier this year raised more than 1.5 billion birr from 48 investors, including 16 of the country’s commercial banks and 12 insurers. Three foreign investors – the Trade and Development Bank (TDB), FSD Africa, and the Nigeria Exchange Group (NGX) – have also acquired stakes in the upcoming capital market.
The ESX shareholders’ list also includes state-owned enterprises under the Ethiopian Investment Holdings (EIH), such as Ethio telecom and the Ethiopian Insurance Corporation.
Frehiwot Tamru, the Chief Executive Officer of the state owned Ethio telecom, announced this week that Ethio Telecom was completing preparation to sell 10% of its shares on the new bourse. Earlier this year, Ethiopian Prime Minister also announced that Ethio Telecom will offer its shares on ESX.
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