ADDIS ABABA (HAN) November 9.2016.Public Diplomacy & Regional Security News. By Menna Asrat. From 50,000 Br nine years ago to more than 2.5 million Br Now
The Ethiopian Commodities Exchange (ECX) announced on Oct. 28 that it selected winers of a membership auction. The Exchange auctioned five membership seats, with the highest bid coming in at 2.5 million Br, and the lowest at two million Br. The winning bid during the previous auction was for 2.8 million Br.
Original members bought their seats for 50,000 Br nine years ago when the exchange first opened.
A member of the ECX has the right to trade on the exchange, either on their own behalf or on the behalf of a client, depending on the type of membership. ECX was established in April 2008 by an advisory board headed by Eleni Gebre-Medhin, with the goal of establishing a modern, secure and efficient trading system by creating a marketplace that serves traders, from farmers to buyers.
Memberships on the ECX are divided into two categories. Full members have seats which are permanent and freely transferable, and enable the member to trade in any commodity. Limited members have memberships that are limited to one year, to one commodity and to either a buying or selling position, not both. Both memberships are divided into Intermediary and Trading memberships, where members can trade on either their own or a client’s account, or only on their own account, respectively.
“We open memberships for bidding for many reasons. For example, if a member requests to transfer their seat or we want to expand the number of traders,” ECX CEO Ermias Eshetu told Fortune. “As for the types of memberships, if the vacated seat belongs to a full member, it is sold as a full membership, and if the seat belonged to a limited member, it is sold as a limited membership.”
“We are looking at the future right now at ECX. We have plans to move from an open cry market model to electronic trading and then into market analysis,” Ermias added. “We want our members not just to be traders, but to become institutions that can protect and lead the commodities market, and we want to help them build their capacities.”
The Exchange launched its Electronic Trading Center (eTRADE Center) in July of 2015 and has thus far traded over seven billion Br. The Exchange recently completed construction of three regional eTRADE Centers in Hawassa, Humera and Neqemet and has started construction of four additional Centers in Adama, Jimma, Kombolcha and Gonder.