The Ethiopian Securities Exchange is moving closer to starting trading activities, with the news that the Ethiopian Capital Market Authority (ECMA) has granted licenses to two investment banks and a securities dealer. These can now apply for membership of the Ethiopian Securities Exchange (ESX), although they have been discussing with the ESX in parallel with the ECMA applications.
On 21 March, the ECMA announced it had granted licences to five new capital market service providers (CMSPs). According to their press release “the licensing event/ ceremony which took place on Friday, March 21, 2025, marks a historic milestone in Ethiopia’s capital market development as we witness the first investment banks in Ethiopia and the total number of licensed CMSPs increase from four to nine.”
The new licensees and their licence categories are:
- CBE Capital S.C. – Investment Bank. This is a subsidiary of the giant Commercial Bank of Ethiopia, a state-owned bank that is the largest in the market.
- Wegagen Capital Investment Bank S.C.- Investment bank. Wegagen Bank S.C. is the first company listed for trading on the Ethiopian Securities Exchange (ESX), it was listed by introduction at the time of the launch in January. Other listing applications are in the pipeline.
- Ethio-Fidelity Securities S.C. – Securities Dealer
- HST Investment Advisory Services PLC – Securities Investment Advisor
- Equation Securities Investment Advisor PLC – Securities Investment Advisor
Next steps for the investment banks and securities dealer is to apply for formal membership of the ESX. This application to the ESX is prepared in parallel to the ECMA licence applications.
The previous four capital market service provider licences were for investment advisers. The new licence holders will provide services including investment banking, advisory, securities brokerage and dealing.
The NBE had issued Directive SBB/92/2024 on Limitations on investment of banks, permitting banks to acquire up to 100% equity in capital market service providers. According to the ECMA press release “This regulatory advancement allows the financial sector to expand and diversify its offerings, ultimately benefiting investors and the economy at large. Notably, this milestone also highlights the increasing role of women in Ethiopia’s financial sector, as two of the newly licensed entities—Wegagen Capital Investment Bank S.C. and HST Investment Advisory Services PLC—are led by female CEOs. Their leadership exemplifies the growing inclusivity and diversification of the Ethiopian capital market”.
Training
In the last week, the ESX has been full force in training the new broker teams in its training room in central Addis Ababa.
ESX training this week has covered key topics to help trading members navigate Ethiopia’s capital market, according to the ESX’s LinkedIn posts: “Participants learned about exchange markets, trading rules, risk management, compliance, and automated systems, gaining valuable insights into how ESX will operate. Practical sessions on the ESX Automated Trading System (ATS), broker back-office systems, and the Central Securities Depository (CSD) provided hands-on experience to ensure a smooth transition into the market.”
The ESX runs on the Capizar ATS by InfoTech Group (see our story), while the CSD is operated by NBE and runs on a system provided by Montran.
The previous week, a team from NCBA in Kenya trained the market on investment banking and custodian operations, in a five-day intensive programme designed to equip financial professionals with practical skills in investment banking, asset management, brokerage, and custody and trustee services, including valuation. The training was provided by FSD Ethiopia.
From 3-14 March, I was proud to lead a team of experts with Maureen Mutua and John Mwaniki. We provided 10 training sessions for the ESX staff on behalf of Cowater International Germany, in a project funded by the European Union. The topics included listings, secondary trading, brokers and supervision, exchange operations and long-term success, Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT), IT management for exchanges, risk management, Environmental Social and Governance (ESG) and the opportunities it brings to exchanges, and corporate governance.
Money market trading on ESX platform
Even before it launches trading in equities, the ESX is already a leader among African exchanges as it offers a trading platform for the interbank short-term lending market operated by the National Bank of Ethiopia (central bank). This was launched in October 2024 (see our previous story) and has picked up significant participation from the banks. More than ETB 377 billion ($2.6bn) worth of transactions have happened over the five months.
On 11 March the ESX and NBE signed a Memorandum of Understanding (here is the ESX press release) to establish an enhanced framework for cooperation, information exchange and disclosure. The aim is to safeguard market participants, mitigate systemic risk, enhance market integrity and maintain confidence in the interbank money market.
Mamo Mihretu, NBE Governor, commented: “The interbank money market is a critical component in modernizing Ethiopia’s financial markets, ensuring greater market efficiency, and strengthening monetary policy transmission.”
Photos from this week’s training sessions at the Ethiopian Securities Exchange (ESX), feature photo is Florence Muchunu (Senior Trading Operations Advisor) leading a training session. Photos: ESX Communications Team.
