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a distance and automating the KYC and AML procedures, stabilising the functioning of the Single Software and Technical Complex (SSTC) by creating reserve servers and making SSTC more transparent for the regulator
to make it easier to monitor.
In terms of the legal framework, the decree calls for the development of
a new Capital Market Law based on
the principles of the International Organisation of Securities Commissions, an association of organisations that regulate the world's securities and futures markets, and increasing the regulator's independence by improving the fund management legislation to seamlessly integrate the funding market and sectors of economy and by improving the holding company legislation.
Increasing the investor base and improving the general investing public literacy by allowing non-residents to open accounts without having a physical presence, allowing them to participate in local IPOs and SPOs, allowing insurance companies to participate in the local capital markets and establishment
of investment funds with foreign counterparties, taking measures to educate the population about the capital markets, and holding international investment forums and conferences to introduce the market developments to the international investing community.
Market Cap (free float in UZS trillion)
Free float market cap in % to GDP
Total Value of Corporate Bonds (UZS, trillion)
Total Value of Corporate Bonds (% to GDP)
Financial and Investment Literacy for population and entrepreneurs
Investment Settlement Accounts
Regional Development Projects financed through capital markets
Involving the population of Uzbekistan in the securities market allows them
to have a skin in the game and makes the reforms irreversible, and lets them benefit from the reforms personally.
Development of local treasury debt issuance market, allowing residents
and non-residents to invest in treasury bond market (except for Central Bank debt) and establishing the role of
market makers, further developing
the treasury debt issuance, including issuance of inf lation linked debt, aligning the local issuances with international best practices, and introducing project bonds to fund infrastructure projects. It also calls for publications of issuances
in advance and holding regular issuance dates on certain days of the week and moving to internationally accepted T+1 and T+2 settlement.
Improving the market participation qualifications by training and re-training through developing programmes jointly with leading learning institutions and creating special training capabilities at the Banking Academy and training the regulator staff by overseas on-the-job training and conducting courses for them at Business School at Ministry of Economy.
The edict comes with ambitious targets that are set until the year 2023 (See table below).
1.9 45
0.3 5
0.16 3.94
0.03 5
Capital market development is always a chicken-and-egg issue, no investors because there is nothing to buy and
no issuances because there are no investors. Hence the president’s decree lists national jewels to be listed on the stock market, to short-circuit this loop.
The companies and banks that will be listed on the local stock exchange are and have been indicated in
the past as “companies and banks not for immediate sale”. They include many of the most attractive companies in the entire economy:
1. National Bank for Foreign Economic Activities of Uzbekistan
2. Navoi Mining and Metallurgical Plant 3. Almalyk Mininng and
Metallurgical Plant
4. Uzmetkombinat
5. Uzbekistan Airways
6. Uzbekneftegaz
7. Agrobank
8. Xalq banki
9. Uztransgaz
10. Uzbekinvest
11. Uzagrosugurta
12. Qurulishmashleasing 13. Uzavtosanoat
14. Qishloq Qurilish Bank 15. Mikrokreditbank
The names on this list coincidentally overlap with companies listed in the Presidential Decree 6096 that listed the leading companies to be transformed.
The Project Management Office at the Ministry of Finance, headed by First Deputy Minister of Finance Omonulla Nasretdinhojaev, guided by Ravshan Goulyamov, Chief Economic Aide
to the President, are performing a Herculean task of transforming these companies and banks, and these two streams (company transformation and capital market development) should converge in the year 2023.
The markets will be ready to accept these transformed companies with strong corporate governance, improved and clear commercial and operating models as well as having introduced IFRS reporting at all of them. Decree 6096 had been previously discussed
Goal
2020
2023
-
4,000
40,000
20,000
-5
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