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Ethiopia: NBE Rescheduled Secondary Capital Market Launch Date

Ethiopia’s central bank, National Bank of Ethiopia (NBE) disclosed it has rescheduled the start of the long waited secondary capital market. The plan was initially to establish the market by July 2017.

According to Fortune, capital market is an open market for debt or equity securities and other financial instruments, used to raise long-term funds. In primary capital markets bond or stock issues are sold to businesspeople by underwriting arrangement.

On the other hand, under secondary capital markets, it is existing securities that are sold and bought among businesses. Secondary capital markets are usually done under a stock exchange, over-the-counter, or elsewhere. Another feature is, interests made from this market are not subject to taxation.

NBE initially planned to introduce the secondary capital market by July 2017. However, it failed to do so following delays in the research for the establishment.

The government intends to establish the market under NBE for the time being. However, it will later be developed to operate independently and upgrade to a capital market.

Source: Fortune