The Ethiopian Securities Exchange has today (Friday 13 December) announced that it will officially launch in mid-January 2025. CEO Tilahun Esmael Kassahun and top colleagues held a press conference on a smart new ESX trading floor.
The news follows the Ethiopian Capital Market Authority (ECMA) awarding the ESX an operational licence last Saturday (7 December). ESX has two licences; 1) to operate a Securities Exchange for trading securities of issuers that meet the listing criteria and 2) to operate an Over the Counter (OTC) Market for securities of issuers that do not meet the listing criteria, such as smaller businesses.
Hana Tehelku, Director General of ECMA, said according to a press release published on LinkedIn: “The licensing of our first securities exchange marks a transformative milestone in our journey to establish a vibrant capital market. This achievement signifies the foundation of a robust capital market, enabling businesses to access sustainable financing and providing investors with new opportunities to grow their wealth. As a regulator, we are committed to fostering transparency, integrity, and innovation to ensure this market thrives and contributes to our share vision of economic prosperity.”
ESX is established as a public private partnership in line with Article 31 of the Capital Market Proclamation (No.1248/2021). It is also granted the authority to operate as a Self-Regulatory Organization (SRO) under the Capital Market Proclamation No. 1248/2021 and the Directive on Recognition and Supervision of Self-Regulatory Organizations No. 1031/2024.
According to an ESX press release quoted on website African Markets: “ESX is now set to revolutionize the country’s financial sector, laying the groundwork for robust capital market and economic growth.
“The licensing paves the way for ESX to operationalize multitude of markets and offer products and services that cater for various types of issuers and investors across its key marketplaces including equity, debt and OTC market space. Issuers of various spectrum including large, medium and small companies can list in its equity market. Similarly, its fixed income market will serve as platform to where various debt instruments including government treasury bills and bonds, corporate bonds, as well as Shariah-compliant securities such as Sukuks are listed and traded.”
Today’s article in Addis Fortune gives some more details.
The build-up to the licence and launch has been an intense and very successful two years in which the ESX has put in place modern frameworks for corporate governance, risk management and compliance. The successful capital raise with participation from 48 domestic and foreign investors spanning multiple industries in which investors had offered $26.6m (ETB 1.51bn) in response to its targeted capital raise of $11.1m, see our story. It has also has published a comprehensive stock exchange rulebook, available here. In addition, the ECMA has been creating an internationally acceptable regulatory framework in consultation with the market – for the details of laws, regulations and directives check this ECMA webpage. The Government and the National Bank of Ethiopia have been taking other steps for the accelerating transformation of the economy.
The ESX has successfully deployed modern IT systems supplied by InfoTech Group including an Electronic Trading Platform (ETP), a shared Broker Back Office system, and order management systems. The platform supports real-time transactions and aligns with international standards and offers secure, efficient, and accessible trading for all participants. Money market trading between banks started on 31 October using the platform, as highlighted in our article last week.
One of the first potential listings, state-owned giant Ethio-Telecom, is busy with a ETB 30 billion ($236m) initial public offer (IPO) of shares (see our story), probably the second largest IPO in Africa in 2024, after Boxer in South Africa which raised ZAR8.5 billion ($475m). The Ethio-Telecom offer is due to close on 3 January or earlier and final results are to be announced by 31 January.
Photo: Ethiopian Securities Exchange
