Is the government in Uzbekistan successful in saving the bond market?

Media outlets revealed the government’s intention in Uzbekistan to privatize many state-owned enterprises by offering their shares on the Tashkent Stock Exchange (TSE) and directed their attention to equipping them.

Reports indicated that, although the market operates, new laws need to be finalized, as well as integration into the global system.

Uzbekistan’s bond market has seen the biggest progress with the first issuance of domestic corporate bonds last June by white goods manufacturer Artel in a historic deal.

Uzbekistan’s issuance of $1 billion in international bonds on the London Stock Exchange (LSE) in February 2019 proved to be a landslide success, with demand exceeding $ 8.5 billion, or more than eight times underwriting. The launch took place with 4.75% yields on 5-year bonds and 5.375% on 10 years and an air of optimism was welcomed among investors attending promotions in Uzbekistan in New York, Boston and London.

The issuance is set to pave the way for regular bond sales and set a sovereign standard that will allow the largest state-owned companies such as oil and gas company Uzbekneftegaz to issue their own international bonds.

The Ministry of Finance of Uzbekistan is still working on a draft capital markets law and retirement and insurance work is very small. But the development of the capital market has been slow and disappointed.