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Establishing Secondary Market in Ethiopia: Benefits and Costs Study

Author

Listed:
  • A.S.Kannan

    (College of Business and Economics, Dilla University, Ethiopia)

  • Letenah Ejigu

    (College of Business and Economics, Bahir Dar University, Ethiopia)

Abstract

Review of the existing literature indicates that securities markets contribute to economic growth by mobilizing saving and channeling it to productive investment. Ethiopia, though having growing markets for primary issues of equity and debt securities, does not have a secondary market and as a result is not reaping the benefits. The purpose of this study is to assess the benefits and costs of operating secondary market for equity and debt securities in the light of extant literature. In order to achieve this objective, the literature available on securities markets has been critically studied and summarized. The result of the research shows that Ethiopia should pave the way for secondary markets development in the medium term as their benefits exceed costs. The study concludes that the policymakers must seriously consider the launching of secondary market in Ethiopia.

Suggested Citation

  • A.S.Kannan & Letenah Ejigu, 2013. "Establishing Secondary Market in Ethiopia: Benefits and Costs Study," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 4(1), pages 08-12, January.
    • Handle: RePEc:aii:ijcmss:v:4:y:2013:i:1:p:08-12
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    References listed on IDEAS

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    5. Asrat Tessema, 2003. "Prospects and Challenges for Developing Securities Markets in Ethiopia: An Analytical Review," African Development Review, African Development Bank, vol. 15(1), pages 50-65.
    6. Keith Jefferis & Graham Smith, 2005. "The Changing Efficiency Of African Stock Markets," South African Journal of Economics, Economic Society of South Africa, vol. 73(1), pages 54-67, March.
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