Ethiopia’s new stock exchange, the Ethiopian Securities Exchange (ESX), has been a big hit with investors. The exchange was able to raise a staggering 1.51 billion birr (around $26.6 million) from investors – more than double its initial target of 631 million birr.
This strong show of investor confidence is a big boost for Ethiopia as it works to set up its very first stock market. The ESX’s CEO, Tilahun Kassahun, said the overwhelming response from investors underscores the high level of excitement and anticipation around the new exchange.
Among the investors who placed bids were big names like FSD Africa, the Trade and Development Bank, and the Nigerian Exchange Group. Domestic players like 16 local banks, 12 insurance companies, and 17 individual investors also participated.
The government of Ethiopia will hold a 25% stake in the ESX through state-owned entities like Ethiotelecom and the Commercial Bank of Ethiopia. The remaining 75% will be owned by private and institutional investors.
Tilahun Kassahun highlighted the importance of getting strategic foreign investors involved, as they can help transfer important technical knowledge and best practices to the new exchange. This is seen as crucial for ensuring the long-term success of the ESX.
The establishment of the ESX is a key part of Prime Minister Abiy Ahmed’s broader plan to open up Ethiopia’s economy and attract more foreign investment. This comes at a challenging time for Ethiopia, as the country is navigating an economic crisis and restructuring its massive foreign debt.
Despite these challenges, the overwhelming investor interest in the ESX’s initial offering suggests confidence in Ethiopia’s potential. As the country’s first-ever stock exchange, the ESX is expected to play a pivotal role in diversifying Ethiopia’s funding sources and reducing its reliance on traditional borrowing.
