Uzbekistan’s largest-ever public market transaction has underscored growing investor interest in the country and its economic reforms, while turning attention to the next phase of developing its financial markets.
The listing of the National Investment Fund of Uzbekistan, managed by Franklin Templeton, raised more capital than all previous IPOs in the country combined over the past 30 years, according to Marius Dan, Central Asia CEO at Templeton Global Investments.
For investors and market operators, the transaction has highlighted a critical question: how Uzbekistan will develop the rules, institutions, and market depth necessary to support capital markets, debt financing, venture capital, and private investment.
“What investors really want to know is that they’ll put their money in and that they will get their money back,” Julia Hoggett, chief executive of the London Stock Exchange, told Euronews.
Hoggett emphasized that investors typically evaluate a country’s fundamentals first—currency stability, inflation, economic growth, population trends, and assets—before assessing the regulatory environment.
Building the infrastructure behind investment
Uzbekistan is preparing new financial legislation to expand financing options for companies and investors. Laziz Kudratov, the country’s minister of Investment, Industry and Trade, told Euronews that legislation establishing the Tashkent International Financial Centre is expected to be signed soon.
The initiative would create a separate jurisdiction based on common law principles. Kudratov explained the goal is to provide foreign financial companies with an international legal framework rather than limiting them to local legislation.
The planned jurisdiction would offer 50 years of tax incentives, including exemptions from corporate income tax, value-added tax (VAT), property tax, and customs duties.
The government is also developing legislation for alternative investment structures, including venture capital, private equity, and limited partner-general partner investment models.
“We are also coming up with a new law on alternative investments,” Kudratov said. “It will create a framework to protect venture capital, LP and GP investment, and private equity investment in Uzbekistan.”
Dan noted that the National Investment Fund listing demonstrated international investors’ willingness to participate when transactions are properly structured. “The initial public offering of the National Investment Fund shows that, in the right structure, investors are very keen to participate in the capital markets of the country,” he said.
Creating a deeper market
Dan emphasized that Uzbekistan’s capital market will need more companies, greater liquidity, and additional foreign institutional investors in coming years. Continued listings of state-owned enterprises, both within and outside the National Investment Fund’s portfolio, will be important for broadening the investment universe.
Local debt markets are also gaining attention, with retail investors increasingly exploring investment opportunities within Uzbekistan. Since 2017, reforms including tax changes, currency liberalization, and removal of restrictions on profit repatriation have transformed the investment environment, Kudratov said.
“Any investor can come, invest and get their revenues out of the country within one day,” he noted.
Hoggett stated that investor confidence requires demonstrated track record rather than mere promises. “You can’t change things overnight and say people need to believe it. They need the evidence to see it,” she said.
Broadening participation
The growth of local debt markets and increased retail investor participation signal that Uzbekistan’s financial market is beginning to expand beyond foreign institutional capital, according to Dan.
Hoggett highlighted that public markets can democratize investment opportunities. “The public markets are democratising,” she said. Public listings allow broader investor access to private company growth, albeit with stronger disclosure requirements for issuers.
For Uzbekistan, broader participation means more than attracting foreign capital—it involves creating opportunities for domestic investors to participate in listed company growth, debt markets, and other financial products.
Governance and market discipline
Corporate governance remains central to capital market development. Several companies within the National Investment Fund’s portfolio have already implemented board-level changes, including independent director appointments.
“Corporate governance is key,” Dan emphasized, describing enhanced oversight of state-owned companies as essential for operational improvements.
Hoggett noted that public markets impose discipline on capital-seeking companies. “The first rule of doing an IPO is meet your estimates, hit what you say you’re going to do,” she explained. This requires companies to build systems, controls, accounting capacity, finance teams, and planning processes—structures that enable faster scaling and growth.
