Zemen Bank has taken an important pioneering step by becoming the first financial institution to invest in the Ethiopian Securities Exchange (ESX).
In a landmark deal finalized today, Zemen Bank purchased a stake worth 47.5 million birr in the bourse.
The agreement sees Zemen Bank acquire approximately a 5% shareholding in ESX. This meets the minimum threshold set for investors of 10 million birr.
Speaking at the signing ceremony with ESX CEO Tilahun Kassahun at Zemen Bank headquarters, CEO Dereje Zenebe commented on the bank's commitment to promote transparency through this investment. It positions Zemen Bank as a leader among its peers in championing the growth of ESX.
More banks and other private investors are now expected to follow their example in the coming months. ESX aims to raise a total of 625 million birr from corporates and institutions to expand its platform and services.
An additional 275 million birr has already been secured from four state-owned enterprises backed by Ethiopia Investment Holdings and FSD Africa.
The fresh injection of capital will allow ESX to introduce new trading mechanisms, attract more listed companies and facilitate broader participation in the market.
Officials view this successful initial round of fundraising as an important step towards establishing ESX as a vibrant hub for capital raising and allocation. If realised, it would strengthen Ethiopia's financial system and better serve the financing needs of a rapidly developing economy.
