The Viability Of Capital Market In Ethiopian Partial Fulfillment For The Masters Degree Of Business Administration)

The study considers market size, liquidity, information, legal and regulatory frameworkrnas the basic components for the viable development of stock exchange market inrnEthiopia. As a package of the structural adjustment program, the IMF and World Bankrnprescribe the SSA to establish capital market to serve the purpose of their economicrndevelopment. However trends show that the markets in the SSA are small in size,rnilliquid, volatile and not preferred to direct foreign investment but slowly developingrnovertime.rnConsequently capital market development is viable in Ethiopia holding the fact that itrnwill be very small and illiquid. But there has to exist investment banks, brokers, dealers,rnadequate accounting, auditing and legal firms rating agencies supportive professionalrnassociations etc. The existence of government regulatory mechanism will furtherrnenhance its development. To further have a well functioning capital market the primaryrnefficiency of the other financial institutions very vital.

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