Wednesday, June 12, 2024
BusinessEthiopia’s maiden stock exchange gets founding CEO

Ethiopia’s maiden stock exchange gets founding CEO

The recently formed board of directors of the Ethiopian Securities Exchange (ESX) has endorsed a key figure vital to kick off the Exchange as the founding chief executive officer (CEO), The Reporter learned.

The appointed CEO, Tilahun Esmael Kassahun (PhD), was one of the chief architects behind the formation of ESX since it has been fermenting at a project office level for the past one and a half year. Working with a team of experts responsible for the crafting of the ESX, he has been leading the project office as a Senior Project Manager.

ESX will be the first securities exchange in Ethiopia, set to transform Ethiopia’s primary bond market to secondary, creating stock market ecosystem for trading of various types of shares and securities.

Its formation follows the implementation of the Capital Market Proclamation, which was ratified in July 2021, and the formation of the Ethiopian Capital Market Authority (ECMA), the apex regulator overseeing the activities of ESX itself and other market players for the protection of investors.

A month ago, the Exchange announced its establishment as a share company after signing the establishment document among its first five shareholders, altogether owning a 25 percent stake.

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Ethiopian Investment Holdings (EIH) and four of its state-owned subsidiaries, ethio telecom, Ethiopian Shipping and Logistics Service Enterprise (ESLSE), Ethiopian Insurance Corporation (EIC), and Berhanena Selam Printing Enterprise, are the five corporations pledged to contribute 25 percent of the over 900 million capital it will have.

At the same time, the Board of Directors was also formed for the ESX last month, onboarding prominent names such as Eleni Gebremedhin (PhD) and Zemedeneh Nigatu. The board is chaired by Hilawe Tadesse, former banker and economist who is currently an advisor to the Governor of the National Bank of Ethiopia (NBE).

Along the board of directors, Tilahun’s first task would be mobilizing the rest 75 percent capital from private investors abroad and locally. Local financial institutions, particularly banks, are reportedly interested to invest in the Exchange and become shareholders. Banks are also earmarked as potential firms to be listed once ESX starts registering IPOs.

Following the formation of the board and the establishment of the ESX as a share company, the masterminds behind the exchange have been rolling up their sleeves to attract and register additional ‘strategic investors’ who could fill up the remaining 75 percent stake, local or foreign.

The ECMA, led by its director general Brook Taye (PhD), is yet to give its confirmation to the appointment. The boards’ endorsement of CEOs for the Exchange will be subject to the consent of the Authority, as per the establishment proclamation.

“A securities exchange shall have a Chief Executive Officer appointed by the board of directors of the exchange and subject to the consent of the Authority,” the Capital Market Proclamation states. Should the Authority take more than a month to express its objection, the appointment will be considered to have the consent of the Authority, according to the proclamation.

Before joining the ESX Project Office in May 2022, Tilahun was one of the specialists at the International Finance Corporation (IFC), the private wing of the World Bank Group.

A former law lecturer at Ethiopian universities, Tilahun holds a bachelor degree in law and two master’s degrees again in law. According to his LinkedIn profile, he also earned his PhD in law and economics from the University of Bocconi in Milan, Italy.

In an interview Tilahun had with The Reporter Magazine last month, he said the exchange will have at least a staff of 40 to 50 members sprawling on an extensive trading floor, which is stationed at the garret of a new building by Africa Avenue, inside Minaye Corporate Complex.

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