By our staff reporter
The Ethiopian Securities Exchange (ESX) has announced that it has secured over 95 percent of the required capital to officially commence its operations, marking a significant milestone in the development of the country’s capital market.
According to the regulations governing the capital market in Ethiopia, ESX revealed that it has successfully raised the necessary capital to establish a centralized stock exchange. With a targeted capitalization of 1 billion birr, ESX is poised to begin operations in the near future.
Tilahun Esmael, PhD, CEO of ESX, disclosed that the recent acquisition of a 50 million birr investment from Global Bank has significantly bolstered the exchange’s capital base. Despite the ongoing capital-raising period expected to conclude by March 2, 2024, ESX has already surpassed the 95 percent mark.
“We have fulfilled our capital-raising objectives ahead of schedule,” stated Tilahun Esmael. “While the final subscription forms are yet to be received, we have secured commitments from investors that exceed our initial expectations.”
Over 20 financial institutions have been invited to become shareholders of ESX as part of the initiative to establish Ethiopia’s investment market. However, specific details regarding the number of institutions that have made purchases and the total amount of funds raised have not been disclosed.
ESX experienced a significant influx of investments, with Awash and Global Bank injecting a combined total of 127 million birr within a week. Awash Bank emerged as the top investor, purchasing shares worth 70 million birr, while Global Bank contributed 50 million birr to ESX’s capitalization efforts.
As per the regulations governing the establishment of the capital market, ESX operates as a share company, with financial institutions being prioritized as key stakeholders in the stock market. Private banks such as Zemen Bank, Sinqe Bank, and Global Bank have continued to demonstrate their confidence in the ESX market, collectively investing millions of birr to support its launch.
The establishment of ESX holds the potential to accelerate economic growth in Ethiopia by providing individuals with opportunities to generate income through ownership, management, or transfer of investment assets in the capital market system.
