Ten state owned entities set to list on the Ethiopian Securities Exchange

Ethiopian Investments Holdings are set to put up 10 state-owned companies for listing as the country’s securities exchange gears up to launch officially by the end of the year. The Ethiopian Securities Exchange, expected to start operation in October or November, will witness a significant milestone with the listing of these key state enterprises. The sovereign wealth fund has announced plans to offer a portion of equity from these companies to the public, marking a fundamental shift towards privatization in Ethiopia's capital market landscape. The most awaited listing is that of ET Telecom, a major telecom operator with a long-standing history of over 130 years. ET Telecom is set to offer 10 percent of its equity to the public, making it the first company to be publicly traded on the exchange. In addition to ET Telecom, other noteworthy state-owned enterprises on the listing radar include the Ethiopian Insurance Corporation, Ethiopian Shipping and Logistics Company, Ethiopian Educational Enterprise Supply, Bran and Nassalam Press and Printing, and Ethiopian Tourism Enterprises. Market sentiment among investors is largely positive, with the upcoming listings presenting lucrative investment opportunities. ET Telecom alone generates profits of $20 billion, drawing considerable interest from the public. Private banks, insurance companies, and microfinances are also expected to join the fray, with anticipated listings or offerings on the exchange, setting the stage for a vibrant capital market ecosystem. The launch of a regulatory sandbox by the Ethiopian Capital Market Authority signifies a push for innovation within the financial sector. Entrepreneurs and innovators can now apply to test FinTech-related products in a controlled environment, paving the way for new technologies to thrive in the Ethiopian financial landscape. Collaborating with the Central Bank, the regulatory sandbox aims to facilitate the introduction of tech-enabled platforms, such as robo-advisors and mobile-based trading applications, enhancing accessibility for retail and SME investors. Regarding the Ethiopian Birr (BIR) performance post-devaluation and IMF financing infusion, the currency appears to be stabilizing around 118-120 BIR per dollar. Despite initial challenges and price revisions, the market is showing signs of normalization. The National Bank of Ethiopia's acceptance of license applications for independent forex bureaus and the planned integration of the forex market into the upcoming securities exchange indicate further market developments on the horizon. Overall, the imminent listing of state-owned entities, coupled with regulatory innovations and currency stability, herald a transformative phase for Ethiopia's capital markets. With a renewed focus on privatization and technological advancement, Ethiopia is poised to attract external inflows and position itself as a key player in the regional financial landscape.