On December 15, President Shavkat Mirziyoyev held a meeting on developing Uzbekistan’s capital market. Participants discussed dual listing, currency bonds on the Tashkent Stock Exchange, a regulatory sandbox for residents and simplified conditions for foreign investors. The goal is to attract $1 bn into the country’s economy.
Market Exists but Liquidity Is Limited
The capital market’s share of the economy remains small, at around 20% of GDP. The total value of issued securities is 275 trln soums ($22.73 bn), but only 4 trln soums ($330 mln) are actively traded on the exchange. There is significant potential for growth.
Regulatory Sandbox for Residents
Authorities plan to extend the regulatory sandbox to residents and lift temporary restrictions for foreign investors. They also aim to allow trading in shares, bonds and other securities of foreign companies on the Uzbek market.
Officials expect this will formalise operations with foreign securities, which are often conducted outside the official market infrastructure.
Possibility of Dual Listing
Uzbekistan may permit dual listing. Companies could issue securities simultaneously on domestic and international markets. Authorities anticipate this will improve transparency and make the market more accessible and understandable for foreign investors.
Expanding Financial Instruments
The government intends to broaden the range of instruments available. Investors could gain access to currency bonds, depositary receipts, foreign securities and exchange-traded funds. This will provide more investment options and reduce dependence on a limited set of assets.
Companies and banks will also be able to issue currency bonds directly on the Tashkent Stock Exchange. This approach allows the country to attract foreign currency without relying on overseas markets.
Unsecured Bonds and Easier Issuance
Authorities are considering easing requirements for issuers. This could include allowing unsecured bonds and issuing volumes exceeding a company’s equity. Such measures are expected to stimulate further growth of the bond market.
The government also plans to align capital market regulation with international standards set by the International Organization of Securities Commissions (IOSCO). The aim is to strengthen the regulator’s role and modernise the supervisory system.
Kursiv also reports that inflation in Uzbekistan is driven almost equally by demand and supply factors.
