Africa-Press – Ethiopia. Ethiopian Securities Exchange (ESX) will serve as an alternative funding source for companies with viable and innovative business ideas, providing them with crucial opportunities to access diverse capital channels, ESX CEO Tilahun Esmael said.
ESX CEO Tilahun Esmael described the launch of ESX as a pivotal moment in Ethiopia’s financial landscape, emphasizing its role as a promising alternative funding source for companies with innovative and viable business ideas.
According to him, ESX is poised to revolutionize the funding landscape by offering venture companies an alternative source of funding.
This shift opens up new avenues for businesses seeking financial support, providing them with a platform to connect with potential investors and secure the capital needed for growth and expansion, Tilahun added.
The CEO also said that ESX will bridge the gap between enterprises with promising concepts and much-needed financial backing.
Equity capital refers to the funds raised by a company through the sale of ownership shares to investors, who then become shareholders with a stake in the company’s assets and profits. This approach enables companies to raise capital without burdening their finances with additional debt.
According to Tilahun, ESX’s launch signals a new era in Ethiopia’s financial sector, offering venture companies an alternative pathway to secure funding and realize their growth potential.
As equity capital takes center stage, businesses can embark on ambitious endeavors while minimizing financial constraints and fostering a prosperous entrepreneurial landscape.
ESX provision of a structured trading platform will also enable over 400,000 bank shareholders who previously don’t have a viable market place to trade their shares, he said, adding when operational ESX allows these shareholders and other investors to accurately assess the real value of their shares and execute safe transactions with ease, setting a new standard for transparency and security in Ethiopia’s financial market.”
Departing from the traditional model of short- and medium-term bank loans, ESX will help avail equity capital as a novel financing avenue. “that enables investors to engage in profitable business ventures, he remarked.
ESX has already raised 1.51 billion Birr capital, exceeding expectations in terms of capital and confidence shown by investors in the long-term prospects of both the exchange and Ethiopia’s capital markets.
ESX’s successful capital raise, oversubscribed by 240 percent, surpassing its target, stands as a testament to investor confidence, according to Tilahun.
The diverse investor base includes prominent foreign strategic investors such as FSD Africa, the Trade and Development Bank Group (TDB), and the Nigerian Exchange Group (NGX), alongside 16 domestic commercial banks, 12 insurance companies, and 17 other domestic investors.
Established through a public-private partnership, ESX’s diverse investor base facilitates the transfer of technical expertise and best practices. The CEO noted, “The enthusiastic response underscores the confidence and anticipation surrounding ESX’s pivotal role in advancing Ethiopia’s financial sector development and overall economic transformation.”
As Ethiopia’s securities exchange, ESX aims to drive economic growth, promote financial inclusion, and generate wealth, as it aims to provide a platform for companies to raise capital, facilitate investment opportunities, and uphold transparency and corporate governance standards.” the CEO elaborated.
Mean while, the investor base of the Ethiopian Securities Market is highly diverse, consisting of renowned foreign strategic investors such as FSD Africa, the Trade and Development Bank Group (TDB), and the Nigerian Exchange Group (NGX), among others.
This wide range of investors contributes significantly to the ongoing development and growth of the sector, he said.
Tilahun emphasized that the inclusion of these three foreign companies, including the Nigerian Stock Exchange, as members of the Ethiopian Securities Market, will bring substantial advantages to the sector’s continuous advancement.
Their investment and involvement are expected to play a vital role in driving progress and fostering a favorable environment for further development, he added.
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