Alkes Research is an investment consulting company offering various services including brokerage and asset management. Their team has experience in both local and international companies, and they own the EQRE Blue index, tracking Uzbekistan's most liquid securities.
In an exclusive interview with Daryo, the Investment Banking Director of Alkes Research, Bekhruzbek Ochilov, shed light on the ongoing reforms in Uzbekistan's capital market, IPO, privatization, and market liquidity.
Ochilov expressed his views on the country's experience of holding IPOs, correcting the notion of the first people's IPO.
He said, "It's not really the first; we have already had several IPOs and SPOs in Uzbekistan. We've also had IPO of UzAuto Motors, which was positioned as the first people's IPO in Uzbekistan."
Discussing the positive influence of UzAuto Motors IPO, he added, "This IPO has opened the window for online authentication of the investors to open the brokerage accounts."
He also emphasized that the IPO process has evolved, and the market is "at least 10 times more" liquid than in previous years.
Attributing the incredible improvement in market transactions, Ochilov stated, "If you looked in the at the Tashkent Stock Exchange website in the market data section and looked in a number of deals, there was under 10 deals or 10 transactions per day in 2017. If you open it now there are about a 1000-2000 transactions daily".
He also emphasized diversification and privatization as key to attracting more people.
"to attract people first, as more people come, you should be opening doors more, increasing the space, putting more things into the shelf, more diversified product," Ochilov stated.
When questioned about foreign interest in Uzbekistan, Ochilov indicated a shift from geographical interest to buying power.
He said, "Interest in Uzbekistan has shifted more to the interest and buying power of the country overall... it's a market with an underdeveloped Financial system. So there are a lot of opportunities here."
Discussing investment and monopoly, he explained,
"The only monopolies that are now present in Uzbekistan are monopolies which have a naturally formed or monopolies and sectors where it is hard to start a business anyway."
On the prospects of raising money through the Capital Market, he noted that the method is "not for startups," but can be accessible to big companies, however, not for a while still.
Commenting on government bonds, Ochilov stated, "Government Securities Market is developing pretty in a very good pace," highlighting the active role of the government in issuing bonds both inside and outside Uzbekistan.
Finally, speaking about Uzbekistan's WTO accession process, Ochilov attributed the renewed motivation to the transformation of Uzbekistan's economy.
"Uzbekistan has gone a long way since 1994 to transform from a raw cotton exporter or cotton industry into a very much Diversified economy with a prominent service sector."
What makes Uzbekistan so much more desirable than its neighbors here in Central Asia?
Ochilov elucidates, "Oh I'd say the answer is very, very easy. Kazakhstan has already gone through its transition to a modern financial system. Uzbekistan is at the footsteps of that. It has started the process; the others, they haven't started or haven't even thought about that. So pretty much the only choice where you see that the transformation is already here; it's happening, but it has not completely been completed yet. So you can be able to seize this opportunity and get into this, uh, a very successful train. So, it's the perfect time, the train is already gone in Kazakhstan, and the train is nowhere to be seen in other countries."
Author: Tawney Kruger
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