The Ethiopian Finance Ministry, in collaboration with African market specialists, has been tirelessly reviewing the first primary offering which will be the listing of Ethio-telecom’s 10 percent stake, said Director General of Ethiopian Capital Market Authority.
The Director, Brook Taye, told this to The East African Business Megazine during an interview with Julians Amboko, a Research Analyst with StratLink Africa Ltd, a Nairobi-based financial advisory firm focusing on emerging and frontier markets.
Brook mentioned Ethiopia’s bold steps towards having a well-established capital market in the country.
It is to be recalled that Ethiopia approved a Capital Markets Establishment Proclamation based on the National Bank of Ethiopia's 2021 Capital Markets ten-year implementation plan, which focused on market development, capacity development, infrastructure development, and policy reviews.
The Director General told EastAfrican that Ethiopia’s unique advantage is that it is a latecomer, and it can take advantage of understanding what has worked in different jurisdictions.
So far, Ethiopia has leveled the ground for the ambitious capital market with robust preparations. It is progressing well to enhance market efficiency and enable the capital market to play a crucial role in mobilizing capital, promoting investment, and driving economic growth.
Based on that, the Director said responsible bodies have built the necessary environment so that it is easy for companies to come to the capital markets. In this scenario, Ethiopia opens up more sectors as exchange readies for launch. If necessary, the authority stands ready to make adjustments if it sees any difficulties.
Currently, efforts are underway in issuing licenses to capital market service providers. The Ethiopian finance ministry, in collaboration with African market specialists, has been working tirelessly to pave the way for the market's development.
The Director General attested they are receiving and reviewing booklet, and reviewing it of the first primary offering which will be the listing of Ethio-telecom’s 10 percent stake.
He indicated there are five state-owned enterprises which are done with an IPO readiness assessment, and also in discussions with the Ethiopia Investment Holdings to see if it has any interest of listing some of its assets. The IPO process essentially consists of two parts. The first is the pre-marketing phase of the offering, while the second is the initial public offering itself.
There are also privately held companies that have expressed interest in coming into market. 30 banks and 18 insurance companies all owned by 400,000 domestic retail investors are keen for it. Technically, they are already publicly held companies so they can simply do listing by introduction. So, the director tips they are excited and, of course, there will be challenges along the way that they will learn from.