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ESX’s Share Offering Oversubscribed by a Whopping 240%

ADDIS ABABA – Ethiopian Securities Exchange (ESX) raised 1.51 billion Birr or $26 million US dollars from investors, surpassing its initial capital raising target by more than two-fold.

This successful capital-raising exercise is a milestone for the inaugural Exchange expected to start by the end of the fiscal year.

ESX, established through a public-private partnership, began selling shares last November to raise 75% the funding required to start its operations. The government owns the remaining 25% through Ethiopian Investment Holdings, the nation’s sovereign wealth fund.

ESX CEO: “exceeded all our Expectations”

The fund raising was initiated in November 2023 with intensive efforts by ESX management and advisors, and roadshows in Addis Ababa, Nairobi, and London.

“Investors rallied around the Exchange up to the close of the capital raise period,” the ESX said.

The capital raise closed on Thursday with the Exchange securing a whopping 1.51 billion birr from a total of 48 domestic and foreign commercial investors.

The figure represents a subscription of 240% of its initial target capital raise of 631 million birr ($11.07 million).

A total of 48 domestic and foreign institutional investors across financial and non-financial sectors involved in share acquisition.

“We are thrilled to have exceeded all our expectations in terms of the capital raise,” said Tilahun Esmael Kassahun, Chief Executive Officer of the Exchange.

The CEO was also “excited by the overwhelming confidence shown by investors in the long-term prospects of both ESX and Ethiopia’s capital markets more broadly.”

Investors Composition

The strategic foreign investments by three institutions, the CEO said, “are particularly important in allowing the transfer of technical knowhow and best practices as well as other areas of long-term strategic value that we will explore.”

He was referring to the FSD Africa, the Trade and Development Bank Group (TDB), and Nigerian Exchange Group (NGX).

The list of private domestic investors involves 16 commercial banks, 12 insurance companies, as well as 17 other investors.

These investments are in addition to the 25% share acquisition by the public sector involving the EIH and its subsidiaries such as Ethiotelecom and the Commercial Bank of Ethiopia, among others.

The overwhelming interest shown by investors “signals the enthusiasm and confidence that the ESX heralds a major milestone in the country’s journey towards financial sector development and economic transformation”, the Exchange says.

Currently, Ethiopia is the only country among the five-biggest economies in sub-Saharan Africa that doesn’t have a stock market.

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