Amhara Bank’s Bold Move Investing in the Ethiopian Securities Exchange

Amhara Bank has secured a significant stake in the Ethiopian Securities Exchange (ESX), signaling a new era for the country’s capital markets. The bank’s investment of 90.7 million Birr positions it as the sixth equity acquirer from the banking industry to participate in the nascent stock market.

Amhara Bank’s acquisition grants it a 10% ownership in the ESX, making it the largest equity investment by any private financial institution thus far. The move underscores the bank’s commitment to fostering economic growth and financial inclusion in Ethiopia. With the ESX aiming to raise a total of 625 million Birr from the private sector, Amhara Bank’s investment is a significant step toward achieving this goal.

The Ethiopian stock market has been gaining momentum, attracting both local and international investors. The ESX’s roadshow has been successful in piquing interest, and other banks, including Awash, Hibret, Global, Siinqee, and Zemen, have also made strategic investments. The insurance industry is not far behind, with Lion Insurance recently acquiring a 10 million Birr equity share.

The ESX plans to launch a secondary market within the country by the end of the current fiscal year. The trading floor will be housed in the historic former Ethiopian Broadcasting Corporation  Building in Addis Ababa. Renovations are underway to tailor the building to the exchange’s needs while preserving its architectural heritage. The ESX’s vision is to create a vibrant marketplace that fa cilitates capital formation, liquidity, and investment opportunities for businesses and individuals alike.

Private Sector Dominance

The ESX’s shareholding structure reflects a strong private sector presence. Private investors will hold a 75% stake, with an issued capital share of approximately 900 million Birr. Ethiopian Investment Holdings (EIH) and its subsidiaries have already secured the remaining 25%. The ESX’s headquarters will be co-located with EIH and the Ethiopian Capital Market Authority (ECMA) in the historic building, symbolizing the convergence of tradition and modernity.As Ethiopia continues its journey toward economic transformation, the ESX’s growth trajectory promises exciting opportunities for investors, businesses, and the nation as a whole. Amhara Bank’s investment serves as a beacon of confidence in the future o Ethiopia’s capital markets.