On October 7, 2019, President of the Republic of Uzbekistan Shavkat Mirziyoyev held a meeting on development of the stock market.
Securities market is an important means of attracting free cash into the economy and mobilizing it for the investment process. The first stage of the reforms carried out in this direction became the creation of the Agency for Development of Capital Market at the beginning of 2019. The issuance of government bonds was resumed.
However, the mechanism of issuing securities and their sale on stock market is used inefficiently. The total amount of shares on stock market is 25 trillion UZS, which does not reach 6 percent of gross domestic product. For example, this figure is 188 percent in Singapore, 112 percent in Malaysia, 34 percent in Russia.
This year, government bonds were sold only to commercial banks through currency exchange. The number of professional participants in stock market does not reach 100. In this regard, it is planned to develop a strategy for development of the stock market for 2020-2025. It is planned to bring the ratio of securities in free circulation to GDP to 10-15 percent by the end of 2025.
The forthcoming measures on achieving this goal were discussed at the meeting.
It was noted that at present this area is regulated by almost a hundred legal acts, many restrictions are set. Thus, in developed countries, banks are active participants in stock market, and in Uzbekistan, banks are prohibited from acquiring shares of other entities in primary market.
The Head of the state pointed to the need for revising legislation, abolishing unnecessary restrictions and simplifying stock market’s activities.
Currently, the state owns 85 percent of shares of 605 joint-stock companies. Only 5 percent – shares of 105 companies are traded on the stock market. At the meeting, instructions were given on increasing the types of securities in capital market based on world practice.
Measures on increasing the demand for securities, attracting foreign exchanges, brokers and banks to attend the domestic stock market were considered. Issues of targeting a certain part of insurance companies' assets to the stock market and allowing banks to acquire highly liquid securities on primary market were discussed.
The need for strengthening the protection of rights of investors and minority shareholders, improving the procedure for payment and collection of dividends was noted. It was also instructed to improve corporate governance and adopt international financial reporting and auditing standards.
Development of the sphere depends on qualification of specialists and financial literacy of the population. Today, there are only 300 specialists in the country who have the appropriate certificate of qualification. In developed countries, thousands of people work in this sphere.
In this regard, the Agency for Development of Capital Market is charged with the task of coordinating activities of relevant Department of Tashkent Financial Institute and providing professional development and training personnel together with advanced foreign universities.
Special attention was paid to expansion of information work on transformations in the stock market, improving the financial literacy of the population.
Responsible officials’ information on the discussed issues was heard and priorities for the future were identified at the meeting.