Apr 4, 2024
Ethiopian Stock Exchange Gets Bids for Twice the Shares on Offer
, Bloomberg News
(Bloomberg) -- The Ethiopian Securities Exchange said it received bids for more than twice the shares it offered investors as the Horn of Africa nation’s bourse raises funds to start operations.
Investors bid for more than 1.51 billion birr ($26.6 million) of shares, surpassing the firm’s target of raising 631 million birr, Chief Executive Officer Tilahun Kassahun told reporters in the capital, Addis Ababa.
Establishing a bourse in Ethiopia — only one of Africa’s five biggest economies that doesn’t have a stock exchange — is part of Prime Minister Abiy Ahmed’s plan to open up the nation to investors and help rebuild the war-ravaged country. The government and dissident Tigrayan fighters signed a pact in 2022 to end a two-year conflcit that had dissuaded investors.
FSD Africa, the Trade and Development Bank, Nigerian Exchange Group, 16 domestic commercial banks, 12 insurance companies and 17 local investors bid to buy shares in the ESX, according to Kassahun. ESX is still working on share allotment.
Strategic foreign investment is “particularly important in allowing the transfer of technical knowhow and best practices as well as other areas of long-term strategic value that we will explore,” Kassahun said.
Ethiopia has been reliant on borrowings from multilateral lenders and bilateral creditors. The nation’s public sector external debt totaled $27.8 billion at the end of September, according to Finance Ministry data.
The nation in December became Africa’s latest sovereign defaulter, joining Zambia and Ghana. All three are trying to restructure billions of dollars in external debt using the Group of 20’s Common Framework mechanism.
The government expects the new exchange will help diversify its funding sources.
ESX was established in October, with the state-owned Ethiopian Investment Holdings as the founding shareholder. Public sector firms including Ethiopian Investment, Ethiotelecom and Commercial Bank of Ethiopia will own 25% of the bourse. The balance will be held by private entities.
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