Challenge and prospect of establishing stock market in Ethiopia PDF

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Tilahun wegene BER/5362/11 R3ECON2 Challenge and prospect of establishing stock market in Ethiopia Statement of the problem The government is implementing new economic reform that is homegrown economic reform. Which mainly agenda is to improve Ethiopian investment climate. To accomplish this extended objective, the public authority is transforming areas in the nation to upgrade their adequacy and efficiency. There has been several studies were carried out by individuals and institutions to assess the infrastructural and institutional settings that are required to establish stock market there are a number of researches that have recommended to establish stock market upon fulfilling requirements required to establish stock market. Previous studies have tried to show the importance of stock market have for economic growth. However, previous studies of Stock market focused on its important for economic growth but this paper try to show the importance of financial market for job creation and promoting investment Research question: what are the challenges of establishing stock market in Ethiopia, if stock market is established how it will contribute in promoting of investment and job creation. General objectives The general objective of this study is to asses and examine the challenges of establishing stock market and to see how the establishment of stock market could help the economy. Specific objectives are: * To see the instructional factors that affect the development of stock market, * To see the current infrastructures factors that affect the establishment of stock market * To see how the stock market could be used in promoting investment and job creation * To identify the how the country could benefit from establishing stock market, Significance of the study The findings of this study could be used by other researchers for further investigation in the subject matter The study findings could be used by the government in the development of stock market Scope and limitation of the study The study will focus on investigate the major challenges and prospects of establishing stock market in Ethiopia. The biggest limitation of the study is unavailability enough primary data on

the subject another limitation will be availability of time to carry out interviews and finding people how have knowledge and experience in stock market. As a solution for limitation of data, secondary data will be used and to for better understanding of the subject matter other countries experience will be used. Literature review In the literature review part more of theoretical review would be used, and empirical review will be used to show other countries experience. there are growing literatures on establishment of stock market by different scholars and Institutions in different times and places. The establishment of stock markets in Africa is expected to boost domestic savings and increase the quantity and quality of investment. More generally, Stock markets are seen as enhancing the operations of the domestic financial system in general and the capital market in particular (Kenny and Moss, 1998). Critics, however, argue that the stock market might not perform efficiently in developing countries and that it may not be feasible for all African markets to promote stock markets given the huge costs and the poor financial structures (Singh, 1999). Mythology The research will use quantitative type of research with descriptive research method. The researcher used quantitative type research approach with descriptive research method. The reason for this is that the main goal of the study is to describe the prospects and challenges of stock market establishment in Ethiopia. If possible the research will interview different individual how have knowledge in the area. Time and budget Since there is no a lot of time most of the task needed to be done should be done in a shorter time. All the necessary data should be gathered with in two week, the proposal will be completed within one month. Reference Kenny, Charles, and Todd D. Moss, 1998, “Stock Markets in Africa: Emerging Lions or White Elephants?” World Development, Vol. 26, pp. 829-43. SINGH, AJIT (1999). “Should Africa Promote Stock Market Capitalism”, Journal of International Development, Vol. 11,343-65....