Bank of Abyssinia Joins the ESX as Treasury-Bill Demand Surges

July 22 delivered two major signals for Ethiopia's capital market. Bank of Abyssinia officially joined the Ethiopian Securities Exchange, while investors submitted ETB 119.4 billion in bids for ETB 33.3 billion of government Treasury bills.

1. Bank of Abyssinia becomes the sixth ESX listing

Bank of Abyssinia officially listed on the ESX main market on July 22. It joins Ethio Telecom, Awash Bank, Wegagen Bank, Gadaa Bank, and Abay Bank, raising the number of listed companies from five to six.

The listing gives the bank's existing shareholders access to a regulated secondary market and adds another established financial institution to the exchange. Bank of Abyssinia had previously registered 15 million existing ordinary shares and 3.125 million new shares associated with its rights offer. Its shares were subsequently dematerialized through the Central Securities Depository in preparation for electronic ownership and trading.

The listing also reinforces the market's concentration in financial services. Five of the ESX's six listed companies are now banks. Ethio Telecom remains the only listed company outside the banking sector.

2. Sidama Bank enters the pipeline

The Ethiopian Capital Market Authority registered Sidama Bank's securities on July 21. Registration is a regulatory milestone, not an ESX listing. Sidama Bank must still complete the exchange's admission requirements before its shares can begin trading.

The distinction matters for retail investors: Bank of Abyssinia is now listed, Sidama Bank is registered but not yet listed, and the ESX currently has six listed companies.

3. Treasury-bill demand reaches ETB 119.4 billion

The government offered ETB 33.29 billion across four Treasury-bill maturities on July 22. Investors submitted ETB 119.40 billion in bids, approximately 3.6 times the amount offered. The full offered amount was accepted.

Accepted weighted average yields

The 28-day bill cleared at 5.502 percent, the 91-day bill at 7.659 percent, the 182-day bill at 8.806 percent, and the 364-day bill at 11.142 percent. The weighted average across all maturities was 9.181 percent.

Demand exceeded supply at every maturity. The 91-day bill attracted the strongest relative demand, receiving ETB 30.92 billion in bids against ETB 6.66 billion offered. The result shows substantial liquidity seeking short-term, Birr-denominated instruments and strengthens the Treasury-bill market's role as a reference point for pricing risk.

4. A new monetary-policy mix

The Treasury-bill auction followed a significant adjustment by the National Bank of Ethiopia. At its July Monetary Policy Committee meeting, the NBE removed the commercial-bank credit cap while raising its policy rate by one percentage point to 16 percent. The Bank said the removal of the cap does not represent monetary easing and that targeted reserve requirements may be applied if individual banks expand lending too aggressively.

The NBE also reduced its foreign-exchange commission from 2.5 percent to 1.5 percent and lowered the goods-export surrender requirement from 50 percent to 30 percent. The package gives banks more freedom to allocate credit, but at a higher benchmark rate and under closer liquidity supervision.

5. Inflation remains the constraint

The NBE reported that headline inflation increased to 13.4 percent in May, up from 11.7 percent in April. Food inflation reached 15 percent, while non-food inflation stood at 11.1 percent. The central bank expects inflation to remain in double digits over its six-month forecast horizon.

This matters when comparing nominal investment returns. The July auction's 9.181 percent weighted average yield remains below the latest reported headline inflation rate. Treasury bills provide defined maturities and government-backed nominal returns, but they do not automatically preserve purchasing power.

Habex retail investor takeaway

Bank of Abyssinia's arrival gives the ESX another established issuer and creates a regulated route for its existing shareholders to trade. Investors should now watch the bank's opening price, trading volume, bid-ask spread, and published financial disclosures. Listing alone does not guarantee liquidity or establish a fair valuation.

Sidama Bank represents the next stage of the pipeline. Investors should wait for formal ESX admission and trading details before treating its securities as publicly tradable.

For fixed-income investors, the key comparison is not only the headline yield. It is the yield after inflation, fees, and the cost of locking funds until maturity.