The latest move to entice investors to a country reeling from a civil war and battling to handle regional instability is Ethiopia’s launch of a stock exchange after a five-decade hiatus. Ethiopia Investment Holdings is selling Ethio Telecom shares in order to generate up to 30 billion birr US ($234 million) for an IPO. Ethiopia Investment Holdings has 40 state-run businesses. The Ethiopian Securities Exchange’s CEO, Tilahun Kassahun, stated that the company’s launch and the government’s intention to list further companies will mark the beginning of the new exchange, which starts on Friday.
According to James Johnstone, co-head of emerging and frontier markets at Redwheel, which oversees $8 billion in assets, “the opening of a domestic stock exchange is a key part of the economic and political transition of a frontier market.” International investment in these rapidly expanding economies is now quite low. Therefore, the potential continue to excite us greatly. Ending fifty years of currency control was the government’s most significant action. This opened up $20 billion in funding from the International Monetary Fund and the World Bank.
The most populous country in Africa after Nigeria also modified regulations to make capital market investments “treated favorably” so that investors may easily repatriate their money, Tilahun stated in an interview. However, the IMF reports that as of March, the nation’s reserves were only $1.5 billion. More recent data has not been made public by the central bank.
Tilahun stated that the new organization hopes to list up to 50 companies over the course of the following five years. Although the exact number is yet unknown, some will join the exchange through a so-called listing by introduction, which does not include an IPO.
