Last week’s sold out 2nd Capital Market Summit hosted by Ethiopian Capital Market Authority (ECMA) has spurred a host of stories and announcements.

70 companies in equity listings pipeline, 4 in coming weeks

Four financial institutions are getting ready to list on the Ethiopian Securities Exchange (ESX) in the coming weeks, part of a pipeline of more than 70 companies, according to Tilahun Kassahun, CEO of the ESX. He said the target is nine listings before the end of the Ethiopian fiscal year (Ethiopia has its own calendar and the fiscal year ends of 7 July 2026) and the pipeline of listings applications being considered signals growing confidence in Ethiopia’s emerging capital market ecosystem.

The Ethiopian Capital Market Authority (ECMA) said on 2 December that more than 70 prospectuses are currently under review, according to this story on Birrmetrics. The prospectus review process is a key step toward regulated listings, ensuring companies meet disclosure and governance standards before offering shares to the public.

The ESX currently lists three companies, Wegagen Bank, Gadaa Bank and Ethio-Telecom, however there is not yet active trading in the equities. Tilahun has also said before that companies can also add their shares for trading on the ESX’s Over-The-Counter (OTC) market if they are not ready for the main trading boards.

Get trust right

An insightful article on listings and capital market trust from Idriss Linge of Ecofin agency points out that the ESX should focus on the long-term: “Investors lack trust, not capital; credible, transparent early IPOs—not higher listing counts—will determine the ESX’s long-term success.

“The real challenge is not the slow pace of IPOs—it is the far bigger task of building a market economy before a market culture entirely exists. And that cultural shift, not the listing count, will ultimately determine the Ethiopian Securities Exchange’s long-term success.

“Every young capital market faces hesitation from companies, scepticism from investors, and a regulatory learning curve. Ethiopia’s situation is simply more pronounced. Decades of state dominance, informal networks, and a business tradition shaped by financial secrecy left most large companies—often family-owned and privately governed—deeply uncomfortable with opening their books to public scrutiny.

“Yet beneath the headlines, something more important is happening: Ethiopia is developing its first actual deal-making class. Firms like CBE Capital and Wegagen Capital Investment Bank—along with other newly licensed capital-market service providers—are creating a professional industry that did not previously exist. Investment bankers, corporate finance specialists, and equity analysts are beginning to shape valuations, structure IPOs, guide governance reforms, and educate issuers and investors alike. In many emerging markets, the arrival of this professional infrastructure unlocked sustained capital-market growth. Ethiopia is now at that inflexion point.

“The ESX’s IPO Clinic reinforces the same shift. It is not a token training program; it is a practical acknowledgement of Ethiopia’s starting point. Companies are learning to restructure governance, prepare compliant financial statements, separate ownership from management, and communicate with investors.

“The fact that firms like IE Networks and Liyana Healthcare are emerging as candidates illustrates that a new type of company is taking shape—organisations willing to embrace global transparency standards. Ethiopia is industrialising capital-market literacy from ground zero, and that process necessarily takes time.”

Sidama Bank prospectus ready

Wegagen Capital Investment Bank on 27 November announced that it had completed the preparation of a prospectus for Sidama Bank. According to this story on Stockmarket.et, WCIB’s team of local and international experts worked together to finalize the document, which was ready to be submitted. At a ceremony, WCIB CEO Brutawit Dawit thanked Sidama Bank for trusting them with the task and presented a certificate of appreciation to Sidama Bank’s CEO, Tadesse Hatiya, for his leadership in completing the process on time.

Sidama Bank told its shareholder meeting on 27 November that it has posted ETB 126.9m ($0.8m) in pre-tax profit for the year 2024/25, up 91% on the previous year, according to this story on Birrmetrics. Total revenue rose to ETB 597.5m, deposits increased to ETB 3.67bn from ETB 2.62bn and total assets more than doubled to ETB 5.51bn. The bank now operates 48 branches nationwide, blending commercial expansion with community-driven ownership.

On the website, Sidama CEO Tadesse says the former Sidama Microfinance Institution was relicensed from 1 July 2022. It has around 2,000 shareholders including individuals, cooperatives, regional government offices, churches, associations and private companies. The vision is to expand financial services to needy group in rural and urban Ethiopia and beyond.

On 1 December WCIB also posted on LinkedIn that it had finalized the registration statement for Ayat Share Company (the website suggests shares are available from the company) and this had been successfully signed and submitted to ECMA. It said this is “a major step toward entering the capital market”.

Soaring interbank money market

Tilahun pointed to the success of the interbank money market, run by the National Bank of Ethiopia and traded on the ESX’s electronic trading platform system (see our story). He said trading volume previously hovered around ETB 100 billion ($640 million) a year, but this had surged ten fold. He said banks are earning higher interest income through market-driven mechanisms, adding it is “a clear indication of what an efficient market can do.” Interbank money trades executed through the ESX were over ETB 1.2 trillion ($7.7bn) in less than a year.

Esayas Kassa, Deputy Director General of ECMA, said: “We have the components, integration, and purpose required for the Ethiopian capital market ecosystem to operate effectively” according to this story on Birrmetrics.

Wanted: Institutions

However, the ESX’s Tilahun emphasized the importance of prioritizing development of the debt market and attracting institutional investors to ensure a balanced and resilient market structure. Esayas Kassa, Deputy Director General of ECMA said that although 17,000 people have registered to take the online courses offered by the ESX Digital Academy, only a small portion of the public holds investment accounts.

Market indices coming in 2026

The ESX’s Tilahun told the conference that the ESX will introduce market indices for publicly listed companies on the Ethiopian Securities Exchange (ESX) by June 2026. These will aggregate movements in share prices and provide a quick market performance overview measurement for investors and others. Indices can also form the basis for future tradeable securities and will boost the profile of the Ethiopian capital market on international trading systems. They are a tool to compare performance of share prices on different securities exchanges and there are usually sectoral indices as well.

ECMA says finalizing framework for foreign participation

ECMA says it has finalized the legal and regulatory framework to enable foreign investors to participate in the capital market. According to this story on Birrmetrics, ECMA Director General Hana Tekhelu said the framework would be released for public consultation soon. The authority has also finalized a draft regulation on compensation for damages caused by capital market actors and was also reported to be working on the regulation for transactions on the OTC market.

(Photo: Addis Ababa in 2023, copyright Tom Minney, African Capital Markets News)