The Ethiopian capital market continues to score new milestones

Three more service providers

The Ethiopian Capital Market Authority (ECMA) issued licences to 3 new Capital Market Service Providers on 1 October 2025. They are:

• First Addis Investment Bank PLC – Investment Bank. This is the first non-banking group to become an investment bank.
• Ignite Capital PLC – Securities Investment Advisor. Ignite Investments is a unique equity crowdfunding platform for facilitating financing for Ethiopian SMEs and startups
• Zuri Capital S.C – Securities Investment Advisor. This firm offers corporate finance, transaction and capital market advisory services including IPO readiness.

The ECMA has so far licensed 11 CMSPs.

Ethio Telecom is the third listed share

The Ethiopian Securities Exchange has three listed equity securities. Ethio Telecom joined the main market trading board on 25 June 2025m (see the list here) with 10.7 million listed shares and 47,305 shareholders. The second listing is Gadaa Bank (see our story) and the first was Wegagen Bank.

Ethio Telecom held an ambitious initial public offering (IPO) for its shares which was launched on 16 October 2024 and closed on 14 February 2025. The target was to raise ETB 30 billion ($197.6 million) by selling 10% of the shares (here is our story with IPO details).

By 3 January, a total of 43,848 shareholders bought 8.78m shares raising ETB 2.64bn, and an extension to 14 February added another 3,529 investors who bought 1.87m shares, adding ETB 572m to the offer proceeds. The total, ETB 3.2 bn, was only about 10.7% of the initial target.

According to this news report in Addis Fortune , Ethio Telecom CEO Frehiwot Tamiru said there would be a follow on offering to allow banks and others to invest and the Government may also decide to allow foreign investors to join a follow on share offer.

The news report adds: “With a subscriber base of 78.3 million, Ethio telecom controls roughly 94.5% of Ethiopia’s telecom market. Its market dominance comes largely from substantial infrastructure investments, which include over 8,538 network towers and an expansive fibre-optic network stretching across the country. Ethio telecom’s annual revenue rose to ETB 91.4bn this year, up from ETB 71.5bn in 2023, demonstrating robust growth across its service segments.”

However, this report by website Stockmarket.et says that confirmation messages of the share allocations were only sent to shareholders on 1 September. It comments: “This late allotment has carried both symbolic and practical weight for Ethiopia’s emerging capital market. For many first-time investors, the delay raised questions about transparency, efficiency, and the readiness of institutions to handle large-scale public offerings. Some worried their funds had disappeared into uncertainty.

“Now, with allotments confirmed, confidence is slowly being restored. Ethio Telecom’s announcement signals that Ethiopia’s financial infrastructure, though still in its infancy, is beginning to function. The Ethiopian Securities Exchange (ESX) and the Central Securities Depository (CSD) will soon take over the next crucial phase: enabling secondary market trading of the shares.”

Securities trading and listing of T-bills

Government Treasury Bills were formally listed for trading on 11 July 2025 [[ ]] , when the bell was also run to start securities trading, according to this ESX press release.

Registration deadline for share companies

Ethiopian Share Companies (S.C.) that previously sold, are selling, or plan to issue shares to the public must register their securities with the ECMA by 25 November 2025, as required by Directive No. 1030/2017.

Supervision guidelines

ECMA on 24 October 2025 published the “Supervision Guidelines for Capital Market Service Providers, Exchanges, Over-the-Counter Markets, Market Infrastructures, and Self-Regulatory Organizations”.

A disclaimer says the document us bot legal or business advice but provides guidance to regulated entities such as licensed service providers, securities exchanges, derivatives exchanges, Over The Counter markets, Securities Depository and Clearing Companies (SDCCs) and Self-Regulatory Organizations.

It clarifies the supervision practices, inspection procedures, frequency of regulatory inspections, procedures for addressing non-compliance, enforcement mechanisms, corrective actions and penalties and the formal process for handling appeals.
According to a LinkedIn post by the authority, this “provides practical direction on supervision principles, compliance expectations, inspection processes, and reporting obligations for licensed and recognized market participants a key milestone in shaping a transparent, resilient, and well-regulated capital market in Ethiopia.”

The full guideline can be downloaded from the ECMA (the address is https://ecma.gov.et/download/supervision_guideline_v1-0/ but you may have problems opening the link).

The supervision model is a hybrid combination, primarily compliance-based with elements of risk-based supervision. There are ongoing compliance obligations for all regulated entities, such as submitting periodic financial and compliance reports, notifying ECMA in a timely fashion of material changes and obtaining approval for key appointments.

The ECMA says it focuses on financial soundness, governance quality and fair business conduct. Tools for the ECMA include monitoring (off-site), inspections (on-site) and targeted reviews. It emphasizes modern IT, automation and ethical governance. It spells out what effective governance should consist of and conduct of business requirements.

It spells out (para 5.3.2 and following) reporting and other requirements for securities exchanges to assess peak capacity of trading infrastructure and how to handle trading interruptions.

Section 6 covers Securities Depository And Clearing Companies (SDCC), which need good governance and modern and automated systems. It covers the routine checks, the requirement for up-to-date records and reconciliations, at least daily with the Central Securities Depository (CSD) operated by the National Bank of Ethiopia.

Section 7 covers the requirements for Self-Regulatory Organizations (SROs) which include SDCCs.

The annexures include reporting templates for the various types of Capital Markets Services Providers (CMSPs) (annex 8.1) and for Securities Exchanges, Derivatives Exchanges, Over-The-Counter markets and Self-Regulatory Organizations (annex 8.2).

Addis Ababa (Photo: Tom Minney, AfricanCapitalMarketsNews)