At the Ethiopian Securities Exchange (ESX), over 45 financial services prospectuses are under review, with major listings from Awash, Dashen, and Bank of AbyssiniaAt the Ethiopian Securities Exchange (ESX), over 45 financial services prospectuses are under review, with major listings from Awash, Dashen, and Bank of Abyssinia

The Ethiopian Securities Exchange (ESX) launch guide: what global investors need to know about the new market

2026/03/12 16:20
11 min read
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  • At the Ethiopian Securities Exchange (ESX), over 45 financial services prospectuses are under review, with major listings from Awash, Dashen, and Bank of Abyssinia imminent, offering investors exposure to Ethiopia’s most profitable and best-capitalised institutions.
  • International investors can participate through licensed local brokers, subject to sectoral limits (notably 40% in banking). The broader liberalisation agenda, including FX reform and foreign bank entry, is creating a more accessible environment.
  • The ESX has launched “Neway,” a mobile trading app, and prioritised dematerialised securities. With indices planned for mid-2026 and a growing roster of licensed intermediaries, the market is building the plumbing needed for institutional participation.

When Prime Minister Abiy Ahmed officially rang the bell to launch the Ethiopian Securities Exchange (ESX) in January 2025, it marked the end of a half-century hiatus in Africa’s second most populous country.

Since the nationalisation campaigns of the Derg regime in the 1970s shuttered the country’s rudimentary share trading activities, Ethiopia has been an outlier: one of the largest economies in Africa without a functional stock market. However, that anomaly is now being corrected at breakneck speed.

For global investors who have long circled Addis Ababa, attracted by its 120 million-strong population, the headquarters of the African Union aura, rapid GDP growth and its strategic role and position in the Horn of Africa, Ethiopian Securities Exchange represents more than just a new trading venue.

It is the centrepiece of a sweeping liberalisation agenda that includes opening the banking sector to foreign capital, floating the local currency birr and privatising state-owned giants. However, as with any frontier market, the opportunities come with a unique set of mechanics, risks, and nuances.

This guide, based on the latest data from regulators and the Ethiopian Securities Exchange through early 2026, provides a comprehensive roadmap for international investors looking to navigate ESX’s debut.

The great leap forward: From monopoly to market

To understand the ESX’s potential, one must first appreciate the economic context it emerges from. For decades, Ethiopia’s financial system was characterised by a command-and-control approach. Credit allocation was dominated by state-owned banks, interest rates were administered and foreign capital was largely walled off. This model financed infrastructure but starved the private sector of equity capital.

The Capital Markets Proclamation of 2021 laid the legal foundation, creating the Ethiopian Capital Market Authority (ECMA) as an independent regulator. Yet it was the official launch of the Ethiopian Securities Exchange in January 2025 that turned theory into practice.

The bourse is structured as a public-private partnership, a model designed to instil confidence from day one. Notably, while the government retains a stake through Ethiopian Investment Holdings (EIH), strategic foreign investors were deliberately seeded into the shareholding structure.

In its pre-launch capital-raising phase, the Ethiopian Securities Exchange garnered significant international attention, raising 1.51 billion birr against a target of just 400 million, a staggering 240 per cent oversubscription.

The investor registry reads like a who’s who of African development finance and exchange expertise, including FSD Africa, the Trade and Development Bank Group (TDB), and the Nigerian Exchange Group (NGX).

This strategic bloc ensures that the ESX benefits from the technical expertise of more established African bourses, mitigating some of the “start-up” risks typically associated with new exchanges.

Tilahun Esmael Kassahun, the ESX’s CEO, notes that the exchange is not just about equities. The interbank money market, launched alongside the exchange, has already blown past expectations, trading over ETB 1 trillion (approximately $6.5 billion) in its first year, ten times the initial forecast. This demonstrates an immediate appetite for formalised liquidity management among Ethiopian banks, a healthy sign for the underlying financial infrastructure.

Ethiopian Securities Exchange: What’s listing and when?

For foreign investors, the critical question is not just about the existence of an exchange, but about the quality of the assets on offer. The ECMA and ESX have adopted a deliberate, phased approach to building a pipeline, with a clear focus on the financial sector as the initial anchor.

As of early 2026, the ECMA reported it was reviewing a staggering 66 prospectuses, with more than 45 originating from the financial services sector. This concentration is strategic. Ethiopia’s banks are among the most profitable and best-capitalised institutions in the country, boasting deep branch networks and high deposit bases.

By bringing them to Ethiopian Securities Exchange first, the regulator aims to establish high-volume liquidity and credibility from day one.

The first wave of major listings is in the pipeline. Wegagen Bank and Gadaa Bank were the symbolic first listings in 2025, but the real weight is arriving now. In February 2026, the ESX confirmed that six banking giants including Awash Bank, Dashen Bank, Bank of Abyssinia, Abay Bank, Anbesa Bank and Amhara Bank have received “approval in principle” for Main Market listings.

Dashen Bank and Bank of Abyssinia are leading the charge, having completed securities registration and published their prospectuses . Dashen Bank, which has assets surpassing 100 billion birr, recently secured a critical tax clearance of over 506 million birr, removing the final administrative hurdle for its listing scheduled for late February 2026. This listing will be a bellwether for the market’s pricing mechanisms and absorptive capacity.

Beyond banking, the pipeline includes state-owned industry giants. Ethio Telecom has already received regulatory approval and begun partial share sales, offering investors a slice of the country’s lucrative telecommunications monopoly.

While earlier hopes for a flood of manufacturing and tech listings have been tempered by cautious private sector readiness, the regulator’s “IPO Clinic“, backed by the World Bank, is nurturing a pipeline of smaller growth companies for the SME board at the Ethiopian Securities Exchange.

The regulatory regime: The ECMA and investor protection

Any frontier market investment hinges on the credibility of the regulator. The ECMA, led by Director General Hana Tehelku, has moved aggressively to establish itself as a competent authority.

Ethiopia’s financial market is built on a modern legislative framework that mandates dematerialisation of securities, meaning physical share certificates are a thing of the past, and operates through a central securities depository.

The ECMA has adopted a “weekly approval” schedule for prospectuses in 2026, signalling a shift from setup mode to execution mode. For investors, this means a steady drumbeat of new supply, which should help with price discovery and diversification.

Crucially, the ECMA has been building the ecosystem from the ground up. It has licensed a growing roster of intermediaries, including investment banks, securities dealers and advisers. As of October 2025, the total number of licensed capital market service providers stood at 11, including First Addis Investment Bank, Ignite Capital, and Zuri Capital.

This expanding pool of professionals is essential for research, brokerage, and market-making, services that sophisticated foreign investors take for granted.

For foreign institutional investors, a key safeguard is the mandatory compliance with International Financial Reporting Standards (IFRS) and stringent governance codes required for listing. Companies such as Dashen Bank have had to open their books to tax verification and public scrutiny, a significant departure from the opaque, family-held or tightly held corporate structures that have historically dominated Ethiopia.

How to invest: Accessing the Ethiopian Securities Exchange (ESX)

For the foreign investor based in London, Nairobi, or New York, the practical question is: how do I actually buy shares? The ESX has shown a keen awareness that accessibility drives liquidity.

Early this month, the ESX launched a digital trading platform named “Neway” in March 2026. Developed with Infotech Private Limited, Neway is a web and mobile application available on iOS and Android that allows investors to open accounts remotely, trade securities, and monitor portfolios in real time.

While currently targeted at the domestic retail market, with over 500 downloads in its first days, it demonstrates the technological backbone upon which foreign access can be layered.

Foreign investors can participate, but they must navigate the prevailing regulatory frameworks. Currently, foreign participation is permitted up to the sectoral limits (notably a 40 percent cap in banking).

To execute trades, foreign investors will need to engage with a licensed ESX member broker. The exchange has admitted several trading members and as the market develops, we can expect local brokers to establish correspondent relationships with international firms.

It is worth noting the broader financial liberalisation context in the Horn of Africa country. The National Bank of Ethiopia (NBE) has issued directives allowing foreign banks to enter via subsidiaries or branches.

Reports show that Kenya’s KCB Group and Equity Group have already signalled their intent to enter the market. As these international banks establish a physical presence, they are likely to also seek membership on the Ethiopian Securities Exchange, potentially offering a familiar on-ramp for foreign portfolio investors.

Ethiopia’s macroeconomic outlook

Investing in the ESX cannot be viewed in isolation from the dramatic macroeconomic adjustments underway in Ethiopia. The government has embarked on a sweeping reform agenda, including the liberalisation of the foreign exchange rate.

While painful in the short term, contributing to inflationary pressures and debt servicing challenges, these reforms are precisely the conditions required for a functional capital market.

The World Bank, in its latest assessment of frontier markets, noted that underdeveloped capital markets are holding back investment growth in countries like Ethiopia.

However, it also flagged the inherent vulnerabilities. Ethiopia, alongside Zambia and Ghana, has recently defaulted on its sovereign debt, highlighting the fragility gripping frontier economies. Frontier markets typically spend about 2.5 per cent of GDP on interest payments and Ethiopia is no exception.

Yet, there is a compelling counter-argument for equity investors. As the World Bank’s Indermit Gill noted, excluding a handful of success stories, frontier markets have been “the biggest disappointment in economic development”.

But Ethiopia is betting that it can join the ranks of the successes by creating a deep pool of local currency capital. For foreign investors, the Ethiopian Securities Exchange offers a rare chance to gain local currency exposure to Addis Ababa’s growth story, diversifying away from the hard currency sovereign debt that has proven so volatile.

The numbers game: Indices, debt, and future growth

Sophisticated investors track benchmarks, and the Ethiopian bourse is building them. The country plans to launch its first market indices by the end of June 2026. These indices will initially track the banking-heavy main board, providing a crucial barometer for fund managers looking to allocate capital to African equities. A well-constructed index allows for performance comparison against peers such as the Nairobi Securities Exchange All Share Index or the NGX in Lagos.

The Ethiopian Securities Exchange is also aggressively developing its debt market. With the Ministry of Finance planning to raise up to 300 billion birr through treasury bills and bonds, the ESX is becoming the primary venue for government funding.

For corporate Ethiopia, the debt market is the next frontier. The ESX plans to develop its corporate bond capability in 2026, allowing companies to raise debt finance beyond traditional bank loans.

The ESX’s own financial results for its maiden year (2024/25) paint a picture of a startup in investment mode. It posted a net loss of 81.8 million birr, with operating revenues thin as it prioritised building systems and capacity.

However, its asset base remains robust at over 1.1 billion birr. Brook Taye, the newly designated chairperson and Ethiopian Investment Holdings CEO, has signalled that the next fiscal year will be one of “activity, visibility, and participation”.

Looking ahead to 2029, the ESX has set ambitious targets: at least 50 listed companies and three million retail investors. Achieving this will require not only successful bank listings but also a pipeline of privatisations and new-economy floats. The foundation, however, has been laid with remarkable speed.

Ethiopia: An emerging frontier in Africa

For the global investor, the Ethiopian Securities Exchange represents one of the most significant frontier market openings of the decade. It is a play on reform momentum, demographic dividends, and the formalisation of one of Africa’s last great untapped economies. The early signs are encouraging: a prudent regulator, a pipeline of high-quality banking assets, and technological infrastructure that leapfrogs the chalk-and-board era.

However, the path will not be linear. Investors must brace for volatility, currency risk, and the growing pains of a new institution. The enthusiasm must be tempered by the reality that liquidity will take time to build, and the number of truly free-float shares may initially be constrained.

Yet, for those willing to do the groundwork, the timing feels opportune. With the first major listings imminent and indices on the horizon, 2026 is shaping up to be the year Ethiopia transitions from a story of potential to a story of participation. As Tilahun Esmael told a recent capital markets summit, a larger number of listed companies will attract more investors. The doors of the ESX are now open. It remains for global capital to decide how many will walk through.

Read also: Ethiopia’s Retail Revolution: Beyond the Carrefour Expansion

The post The Ethiopian Securities Exchange (ESX) launch guide: what global investors need to know about the new market appeared first on The Exchange Africa.

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