Ethio Telecom, the biggest telecom provider in Ethiopia is the first company to list on the Ethiopian Securities Exchange (ESX) barely 24 hours after its inauguration by selling 100 million shares for $2.54 each.
Inaugurated by Prime Minister Abiy Ahmed on Friday at the Science Museum, the Ethiopian Securities Exchange (ESX) is a “cornerstone of the government’s Home-Grown Economic Reform II (HGER II) and aims to transform the country’s financial system.”
The government, which controls a large portion of the telco, would generate 30 billion birr ($234 million) through the Initial Public Offering (IPO).
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The establishment of the ESX is part of the government’s strategy to bring capital into Ethiopia’s underdeveloped market and free up industries that were previously under state control.
ESX process ETB 135 billion in trades
Since its October 2024 pilot, the new exchange’s cutting-edge Electronic Trading Platform has conducted more than ETB 135 billion (USD 1.1 billion) in trades, already increasing credit flow in the banking system. Businesses can now obtain credit more easily due to the platform’s improved price transparency and lower transaction costs. It will also facilitate more effective issuance and trading of financial instruments like corporate bonds, Treasury Bills, and commercial papers.
Offering a vast array of financial products to corporations, governments, and institutions, the ESX will function in three segments: the Equity Market, Fixed Income Market, and Money Market.
The ESX intends to establish itself as a pioneer in Shariah-compliant financial products, such as Sukuk bonds, in addition to its objectives of listing 90 businesses and offering substitute financing choices for Ethiopia’s quickly expanding economy.
“We see the new securities exchange as a multi-faceted financial infrastructure, providing multiple markets and a variety of products, catering for different types of issuers and investors,” said Tilahun Esmael Kassahun, CEO of the exchange.
Ethiopia’s economic reforms
The launch of the ESX is part of Ethiopia’s economic reforms, which include privatising state-owned businesses, opening up the economy, and lowering reliance on traditional banking for business finance.
The ESX will support development in what is already one of the fastest-growing economies in the world by facilitating fair access to finance and improving liquidity, both of which are critical for propelling private sector expansion.
This milestone comes after a year of major economic reforms, such as floating the birr, allowing international competition in the banking industry, and promoting the growth of the capital market.