Guides

A capital market is where long-term securities such as shares and bonds are issued and traded, channelling savings to companies and governments that need capital.

The foundational law that established Ethiopia's capital market and its regulator (ECMA), setting the legal framework for securities, exchanges, and market participants.

The Ethiopian Capital Market Authority — the government regulator that licenses and supervises Ethiopia's capital market: exchanges, intermediaries, and issuers.

The rules that keep trading fair: insider trading, market manipulation, and fraudulent practices are prohibited. Ethiopia's Capital Market Proclamation bans market abuse and sets penalties for it.

The Ethiopian Securities Exchange, where shares and other securities are listed and traded under its Rulebook.

The conditions a company must meet to list its securities on the ESX, set out in the ESX Rulebook.

The process by which securities must be registered or approved before a public offering, governed by ECMA's public offering directive.

The emerging set of issuers, advisers, intermediaries, and rules enabling companies to go public in Ethiopia's new market.

The National Bank of Ethiopia — the central bank, which issues government securities (Treasury bills, OMO auctions) and oversees monetary policy.

Treasury bills and bonds issued by the government through the NBE to finance public spending, auctioned to investors.

The National Bank of Ethiopia auctions Treasury bills on behalf of the Ministry of Finance in 28, 91, 182 and 364-day maturities, sold at a discount, with bids submitted through the CSD system.

Licensed intermediaries that help Ethiopian companies raise capital and bring securities to market under ECMA rules.

Firms licensed by ECMA to operate in the market — securities brokers, dealers, investment banks, and market makers. The CMSP Licensing Directive sets who may run this business, the capital they need, and the conduct expected of them.

ECMA has licensed a growing list of investment banks. See the current list, with contacts, in the Directory.

Pooled vehicles — such as mutual funds — that let many investors combine money into a single professionally managed portfolio, spreading risk and lowering the entry barrier for small savers.

The professionals and institutions — pension funds, insurers, and fund managers — that invest large pooled sums on others' behalf. Their participation deepens liquidity and stability as Ethiopia's market matures.

You buy and sell shares through a licensed ESX trading member (a broker or dealer); your securities are then held electronically for you at the Central Securities Depository.

Only deal with firms licensed by ECMA. Check the official licensee list and confirm the exact name — ECMA publishes public warnings about unlicensed operators.

The Central Securities Depository — infrastructure that holds securities in electronic (dematerialized) form and supports settlement and custody.

Investments structured to follow Islamic finance principles — no interest (riba) and no prohibited activities — often using profit-sharing or asset-backed structures. A high-interest segment for Ethiopia given wide demand for interest-free finance.