Uzbekistan’s largest-ever public market transaction has highlighted growing investor interest in the country and its economic reforms, while shifting attention to the next stage of developing its financial markets.
The listing of the National Investment Fund of Uzbekistan, managed by Franklin Templeton, raised more money 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 drawn attention to a broader issue: how Uzbekistan develops the rules, institutions and market depth needed 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,” said Julia Hoggett, chief executive of the London Stock Exchange, speaking to Euronews.
Hoggett explained that investors typically start by assessing a country’s fundamentals—such as currency stability, inflation, economic growth, demographic trends and asset base—before moving on to the regulatory environment.
Building the Infrastructure Behind Investment
Uzbekistan is preparing new financial legislation as it seeks to broaden the financing options available to 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 project would create a separate jurisdiction based on common‑law principles. Kudratov said the aim is to provide foreign financial firms with a legal environment aligned with international standards, rather than forcing them to operate solely under local laws.
He added that the planned jurisdiction would include a 50‑year tax‑incentive package, covering corporate income tax, value‑added tax (VAT), property tax and customs duties.
The government is also drafting legislation for alternative investment structures, including venture capital, private equity and limited‑partner/general‑partner 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 said the National Investment Fund’s listing demonstrated that international investors are eager to participate when transactions are structured correctly.
“The initial public offering of the National Investment Fund shows that, with the right structure, investors are very keen to participate in the country’s capital markets,” he noted.
Creating a Deeper Market
Dan stated that Uzbekistan’s capital market will require more listed companies, increased liquidity and greater participation from foreign institutional investors in the coming years.
Continued listings of state‑owned enterprises—both inside and outside the National Investment Fund’s portfolio—will be essential to widen the investment universe, he said.
Local debt markets are also gaining traction, with retail investors paying closer attention to opportunities within Uzbekistan, according to Dan.
Kudratov highlighted reforms introduced since 2017 that have transformed the investment landscape through tax changes, currency liberalisation and the removal of profit‑repatriation restrictions.
“Any investor can come, invest and get their revenues out of the country within one day,” he said.
Yet investor confidence, in Hoggett’s view, depends on a proven track record.
“You can’t change things overnight and expect people to believe it. They need evidence,” she said.
Broadening Participation
The growth of local debt markets and the entry of more retail investors are early signs that Uzbekistan’s financial market is expanding beyond foreign institutional capital, according to Dan.
Hoggett noted that public markets can play a broader role by opening investment opportunities to a wider pool of participants.
“The public markets are democratising,” she observed.
She added that private companies are often owned by a small group of investors, whereas public markets enable a broader investor base to access company growth. This wider access comes with stronger disclosure requirements for issuers.
For Uzbekistan, broader participation means more than attracting foreign capital; it also entails creating opportunities for domestic investors to take part in the growth of listed companies, debt markets and other financial products.
Governance and Market Discipline
Governance remains central to the development of Uzbekistan’s capital markets.
Dan noted that several companies within the National Investment Fund’s portfolio have already instituted board‑level changes, including the appointment of independent directors.
“Corporate governance is key,” he said.
He described stronger oversight of state‑owned companies as part of improving their operations.
Hoggett said public markets also impose discipline on companies seeking capital.
“The first rule of doing an IPO is meet your estimates, hit what you say you’re going to do,” she said.
That requires companies to build robust systems, controls, accounting capacity, finance teams and planning processes, she added. Such structures can help firms operate at scale and grow more quickly.
