The Tashkent Stock Exchange (TSE) has undergone significant changes over the past year and a half, positioning itself as a key player in Uzbekistan’s evolving financial landscape. The TSE has seen a dramatic increase in trading activity, with daily trades jumping from around 300 to over 2,000. “Liquidity in terms of the number of trades improved dramatically,” Paresishvili stated in an interview with Daryo, highlighting the growing investor interest in the Uzbek market. However, the market remains volatile, a common characteristic of frontier markets like Uzbekistan.
The TSE is currently working to integrate large international players such as ClearStream, JP Morgan, and Citibank, which is expected to further open the market to foreign investors by the end of 2024. Paresishvili explained, “Once they are here, they will open the door to many more foreign investors who would love to invest in the Uzbek market.” He pointed to Russia’s experience, where similar connections boosted foreign investment in the local market.
One of the main challenges for the TSE has been the slow pace of privatization of state-owned companies, which are seen as crucial drivers for market growth. “Many of these large state-owned companies and banks are not ready to go public… they still have to do a lot of work in improving their corporate governance, transparency of their financial statements,” Paresishvili noted. Despite these setbacks, the TSE continues to prepare for a future wave of initial public offerings (IPOs) that could transform the market.
The TSE is also aiming to develop its bond market, which is currently dominated by equity issuances. Paresishvili highlighted the need for companies to explore debt financing options: “We see a big potential for bond issuances… Uzbek companies should be thinking of financing their growth, not only through equity issue or by simply going to their shareholders, asking them for more money, but they should be utilizing issuance of bonds.”
Despite challenges, the Tashkent Stock Exchange is poised for growth, driven by ongoing reforms and increasing investor interest. Paresishvili remains optimistic, noting, “Things are evolving, things are developing really fast and hopefully we will have some really good news by the end of this year, if not earlier, in terms of connectivity of Uzbekistan to international markets.”
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