In a landmark development for Ethiopia’s financial sector, the Ethiopian Capital Market Authority (ECMA) has officially granted licenses to five new capital market service providers (CMSPs). This event, held on March 21, marks a significant expansion of the country’s capital market, with the total number of licensed CMSPs increasing from four to nine.
The newly licensed entities include:
- CBE Capital S.C. – Investment Bank
- Wegagen Capital Investment Bank S.C. – Investment Bank
- Ethio-Fidelity Securities S.C. – Securities Dealer
- HST Investment Advisory Services PLC – Securities Investment Advisor
- Equation Securities Investment Advisor PLC – Securities Investment Advisor
This expansion is poised to enhance the diversification and robustness of Ethiopia’s capital market, providing essential services such as investment banking, advisory, and securities brokerage. The inclusion of these new service providers reflects the maturing nature of Ethiopia’s capital market, which is increasingly positioned to cater to both local and international investors.
Previously, the capital market was limited to four licensed service providers, all of whom operated solely as investment advisers. The addition of investment banks and a securities dealer represents a transformative shift, promising to improve market efficiency and create better opportunities for capital raising.
The licensing of CBE Capital and Wegagen Capital is particularly noteworthy, as both are substantially owned by major commercial banks—Commercial Bank of Ethiopia (CBE) and Wegagen Bank, respectively. This development aligns with a recent National Bank of Ethiopia directive that allows banks to acquire up to 100% equity in capital market service providers, facilitating further growth and diversification in the financial sector.
Additionally, the new licenses underscore the increasing role of women in Ethiopia’s financial landscape, with two of the licensed entities led by female CEOs. This shift highlights the importance of gender representation in the sector’s evolution.
During the licensing ceremony, the Director General of the ECMA emphasized the responsibility that comes with these new licenses. She called for a commitment to integrity and excellence, stating that the success of these new CMSPs will be crucial for the sustainability of Ethiopia’s financial sector.
