The Ethiopian Capital Market Authority Friday licensed five new capital market service providers (CMSPs), including first investment banks, marking a further expansion of capital markets in the East African country.
The authority in a statement stated that the licensing “marks a historic milestone” by introducing investment banks into Ethiopia’s financial sector, which had previously only included advisory firms.
It said the new licensees are expected to “diversify and strengthen” the capital market by offering services such as securities brokerage, investment advisory, and capital raising.
It is for the first time, Ethiopia saw the entry of investment banks and securities dealing companies into the market. The move is believed to be a transformative period for the country’s financial sector, which previously only had investment advisers as licensed providers.
Speaking at the event, Hana Tehelku, director general of the authority, said the introduction of these five new firms is pivotal to diversifying Ethiopia’s financial markets, with services ranging from investment banking to securities dealing and advisory.
This expansion helps lay the groundwork for a more mature and competitive capital market, raising huge capital and investment opportunities, both for local and international investors, she said.
Tehelku further underscored that their operations would be critical to fostering investor confidence, increasing market liquidity, and ensuring the success and sustainability of Ethiopia’s financial system.
MG/as/APA