Essential Requisites For Establishing Institutionalized Secondary Market In Ethiopia Lessons From Other Developing Countries

The objective of the study was to assess & examine Essential requisites for establishing an institutionalized secondary market in Ethiopia using lessons from other developing countries. The research used a mixed approach with descriptive research design and the study used both primary and secondary data as Cross-section by nature using purposive and simple random sampling techniques to select the sample. The number of respondents was 32 from banks, 34 from insurers, 6 from pension institutions, 8 from ECX, 6 from Ethiopia and Addis Ababa Chamber of Commerce & Sectorial Associations and 81 from Share Company’s a total of 167 samples used to form the target population. In addition to this secondary data was used from relevant sources. SPSS used to analyze data and findings were presented by using tables accompanied by a brief explanation. Besides, the qualitative data were analyzed through narrative explanation. The result revealed that there is promising demand, i.e., availability of a company to enlist in the supply side was visible. The findings also indicated that it is essential to have a standard Corporate Governance system in place, strong regulatory body, capacitated judiciary system, uniform accounting, and audit system & standards, trading, and clearing and settlement infrastructure, brokerage firms and investment bank, increased awareness of investors, trained and skilled manpower. Besides, a commitment of the government to support the market, stable macro economy are found to be essential requisite for establishing institutionalized secondary market in Ethiopia. As to their presence currently, there is promising demand and infrastructure, as far as the government commitment and promises are concerned, they are being put in place. Hence, starting and refining it through time is what the author has as a recommendation- Placing regulatory body and start and control the basic tasks, starting awareness creation programs for financial sectors related to their role in the market, updating the proclamation of pension funds, and improve their capacity, train the judiciary system, develop central deposit system, establishing investment bank and develop the market sequentially. rnKeywords: secondary market, legal and regulatory infrastructure, and market infrastructure

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