Zemen Bank has become the first private entity to secure an agreement with the Ethiopian Securities Exchange (ESX) by investing Birr 47.5 million to acquire a 5% ownership share. This fulfills the minimum requirement set by ESX for investors as of January 11, 2024.

Zemen Bank joins Ethiopian Investment Holdings (EIH) as one of the initial financial backers of ESX, with other investors expected to follow suit. Zemen Bank's CEO, Dereje Zebene, expressed enthusiasm, anticipating transformative changes in Ethiopia's financial sector with the introduction of equity and debt markets. ESX CEO Tilahun Kassahun welcomed Zemen Bank's investment, emphasizing its importance for acquiring trading solutions and preparing for operational launch.

The move is part of ESX's goal to raise a total of Birr 625 million, with recent support from state-owned enterprises and FSD Africa. More banks and private investors in Ethiopia are expected to follow suit in the coming months.

Foreign and domestic investors can purchase 75% of the shares of ESX while the rest of the ownership goes to the Ethiopian Government through Ethiopian Investment Holdings.

It is to be recalled that the National Bank of Ethiopia (NBE) announced in May 2022 that three well known global companies were desirous to participate in ESX. Financial Deepening Africa (FSD Africa) has already signed an agreement to become a shareholder in the securities exchange. According to NBE, IFC has also shown an interest to participate in the securities exchange.

Source: The Ethiopian Herald

Additional source: 2Merkato Archives