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18 I Companies & Markets bne May 2020 “That would be roughly 24% of the total electricity bill for the whole country, and could put pressure on companies' cash flows and their capacity to implement investment programmes, as well as lead to a significant jump in utilities’ leverage. However, it is the government response measures which will inform the final view on the issue,” says Sklyar.
The good news is that while the cash positions, capex and dividend payments will be negatively and noticeably affected this year, VTBC believes that once the pandemic recedes the
AFC CAPITAL:
Uzbekistan’s response to COVID-19 could see economy and society emerge stronger
Scott Osheroff in Singapore
Uzbekistan recorded its first coronavirus (COVID-19) case on March 15. The country’s response since then has been exceptionally proactive, equal to the responses seen in Singapore, South Korea, Taiwan and Hong Kong in combatting the challenge in taking the route of not “turning off” the economy but rather being aggressive in isolating cases and increasing restrictions as cases have risen – at present (April 13) there are 1,054 active cases, four deaths and 89 recoveries.
Proactive measures were taken from the very first virus case. Starting from March 16, the spring school holiday was brought forward and schools were closed, while weddings and large social gatherings were banned. Then, on March 22, after the start of the Navruz (or Nowruz) holidays, celebrating the
start of spring, as cases rose further all food and beverage establishments were forced to close and only permitted to fulfil carryout and delivery orders.
The week of March 23 saw a ratcheting up of government measures including fines, equivalent to $70, for people going outside without a mask, cities put into lockdown with no permitted inter-city travel and the banning of groups of more than three people in public. On March 30, passenger cars were banned from the streets (special permits available for those who prove a need to use their cars) and the lockdown was extended to April 20 to help ensure the virus is stamped out.
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negative effects of the stop-shock will also quickly retreat before a return to normal in 2021.
Happily the Russian utilities sector had already emerged from its last investment cycle and companies were in robust financial health at the start of this year, having pulled in significant equity investment and made power the best performing stocks in the first two months of this year. The result is that as the crisis recedes, analysts are expecting that interest from international portfolio investors will return to utilities ahead of any other sector.
President Shavkat Mirziyoyev (right) seen with Uzbek and foreign bloggers whom he met at the Sharq Taronalari international music festival.
Meanwhile, construction sites are busy and there is still some traffic on the roads; of course a decrease from normal levels, but life continues unlike in many other countries with the virus.
Mere one day of “panic”
March 16 saw the closing of national borders and airports for individual travel (all land borders and the airports remained open for commercial imports and exports). There was essentially a mere one day of “panic” at grocery stores and bazaars. Though, from March 16 through to today all markets and bazaars are open, prices have not been inflated (helped by the country’s large domestic manufacturing and agro- processing base) and store shelves have been fully stocked with zero-rationing measures, unlike in places such as the US where certain states are rationing purchases of chicken, meat, fish and other products.
Uzbekistan’s first coronavirus cases stemmed from one returnee from France and one from Istanbul. Each person on the planes they travelled on was put under government quarantine along with their families. Additionally, all of their direct contacts were required to self-quarantine. Coronavirus cases increased lately due to Uzbekistan repatriating overseas citizens.
There have been reports that Uzbekistan has been building hospitals in the regions, but these facilities are actually quarantine facilities, with a medical component of course,