On October 7, the President of Uzbekistan held a meeting to discuss development of the country’s stock market.
“The securities market is an important means of consolidating free cash in the economy and mobilizing it for investment processes. The first stage of the reforms carried out in this direction was the creation of the Capital Markets Development Agency at the beginning of this year,” the presidential press service said.
It should be recalled that issuance of government bonds was resumed in Uzbekistan. However, the mechanism for issuing securities and their sale on the stock market is used inefficiently. Total amount of shares in the stock market is 25 trillion soums, which does not reach 6% of the gross domestic product. For example, this figure is 188% in Singapore, 112% in Malaysia, 34% in Russia.
This year, government bonds were sold only to commercial banks through the currency exchange. The number of professional stock market participants does not reach 100.
In this regard, it is planned to work out a stock market development strategy for 2020-2025. It is planned to bring the ratio of freely traded securities in GDP to 10-15% by the end of 2025.
At the meeting, upcoming measures to achieve the above goals were also discussed.
It was noted that at present, this sphere is regulated by about 100 regulatory legal acts, and many restrictions have been established. So, in developed countries, banks are active participants in the stock market. In Uzbekistan, banks are prohibited from acquiring shares of other entities. There are also restrictions on the purchase and sale of government bonds by citizens.
The head of state pointed out the need to review legislative acts, abolish unnecessary restrictions and simplify work in the stock market.
Currently, the state owns 85% of the shares of 605 joint-stock companies. Of these, only 5% are traded on the stock market – shares of 105 companies. At the meeting, instructions were given to increase the types of securities on the capital market based on international practice.
Measures to increase demand for securities, attracting foreign exchanges, brokers and banks to the domestic stock market were considered. The issues of orienting a certain part of the assets of insurance companies to the stock market, allowing banks to acquire highly liquid securities in the primary market were discussed.