According to The Reporter, two working groups formed at the Public Financial Enterprises supervisory department are undertaking feasibility studies to establish an investment bank, in addition to an agriculture bank.

Following the government’s decision to establish a secondary market, the need for an investment bank arose. Investment banks, among other things, underwrite stocks, connect IPOs and investors, and provide real-time research output to the stock market.

This institution will thoroughly assess the banks, as well as other IPOs, in order to determine the true value of their shares and securities.

This means that, unlike today, IPOs, including commercial banks, cannot set their own share prices, and that underwriters protect the interests of every stakeholder, investor, IPO, and others. An investment bank is essential to the functioning of the stock market. In a nutshell, an investment bank sets criteria. The investment bank, on the other hand, cannot be listed on the stock exchange.

Source: The Reporter Newspaper


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Hanna is an aspiring economist in her final year at Addis Ababa University. She has written hundreds of insightful daily stories, analyses, and features about the Ethiopian economy and beyond.

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