Establishing Secondary Market in Ethiopia: Benefits and Costs Study
Keywords:Secondary Market, Benefits and Costs, Ethiopia, Extant Literature Review
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.
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