The Uzbek economy is booming and with incomes rising and a middle class emerging, companies are hungry for investment cash. Reforms to the domestic capital market are starting to pay off, with a growing volume of corporate bond issues and the first IPOs appearing.

Bekhruzbek Ochilov, co-founder and Investment Banking Director of ALKES, is one of a new generation of Uzbek investment bankers making this market happen. He began his career at the Tashkent Stock Exchange, later joined Freedom Finance, a New York-listed investment group with Central Asian roots, before setting out to build his own firm. ALKES is a full-service investment banking firm and brokerage that is placing deals, advising on privatisations and contributing to the development of Uzbekistan’s capital market infrastructure.

“Until recently, such services were rarely available domestically,” he told bne IntelliNews. “Now we’re doing deals that would have been unthinkable even five years ago.”

Bekhruzbek Ochilov, co-founder and Investment Banking Director of ALKES, is one of a new generation of Uzbek investment bankers making the market happen.

Local clients and rising economic tide

ALKES serves a growing base of institutional investors, corporations, government entities and high-net-worth individuals. Most of its business remains domestic, although Ochilov expects this to change as market reforms deepen.

The need for investment banking services is being driven by the deepening economy, and the macro backdrop has been improving steadily, says Ochilov. In early 2025, the major ratings agencies raised Uzbekistan’s outlook to positive, and the government’s $1.5bn sovereign bond issue in February was met with strong demand. “It’s building on the momentum of reforms since 2016,” Ochilov said. “We’re finally getting real deals.”

Among the landmark transactions is a local currency bond placed by ALKES for Uzum, Uzbekistan’s leading tech company, to fund its “buy now, pay later” and microloan service. The UZS300bn ($23mn) deal remains the largest private sector issue to date. “Before this, the biggest corporate bond was $10mn,” Ochilov said.

Alkes also structured Uzbekistan’s first green bond, issued by the state-backed Uzbek Mortgage Refinancing Company (UzMRC). The UZS50bn ($4.3mn) bond, bought by the Fund of guarantee citizens' deposits in banks, carried a rate one percentage point lower than previous placements by the UzMRC. says Ochilov. UzMRC bonds are very popular amongst banks due to regulatory incentives: banks only need a 15% of the bond as a capital provisions, compared with 100% for other corporate obligations, but zero provisions are required when holding state treasury bills. “It makes a huge difference in pricing and uptake,” Ochilov said. “Banks love them and there are not that many options between the corporate bonds and treasuries.

Equity markets face structural hurdles

Progress in developing the equity side of the capital market has been more gradual. Although the Tashkent Stock Exchange has existed for over two decades, its integration into the broader economy has only recently started to accelerate. Ongoing capital market reforms aim to reposition the exchange as a core pillar of national capital formation, guided by the National Agency of Perspective Projects (NAPP), which plays a central role in shaping capital market architecture and oversight.

In the last few years companies are more actively issuing corporate bonds at TSE to fund their growth. However, attempts to develop an equity capital market have not gone as well and the pool of capital in the market remains limited.

Most IPOs to date have been small and thinly traded. Uzbekistan’s first IPO came in 2017, when glassmaker Kvarts raised $900,000. The only major listing targeted at international investors so far has been the disappointing experimental UzAuto Motors international IPO, which Ochilov said had been poorly timed. “They went out between Thanksgiving and Christmas – it’s the worst time of the year. Timing mattered more than valuation.”

The second largest local public offering was the Uzbek Commodity Exchange, whose stock has risen by 1,200% since 2017 and by over 70% since its 2024 SPO, and remains the only equity consistently above its IPO price.

By contrast, major companies such as Uzbek Steel that became liquid seven years ago have lost half their market value over the past three years, but its share price remains above its 2017-2018 valuation. The government hopes that better-prepared deals and a more robust infrastructure will boost investor confidence. “Until now, there’s been no large-scale IPO to truly test the market,” said Ochilov. “But that moment is coming.”

The government’s flagship equity initiative is the Uzbek National Investment Fund, a $1.7bn portfolio of 18 state-owned enterprises managed by Franklin Templeton. It is preparing dual IPOs on the Tashkent Stock Exchange and, likely, the London Stock Exchange for itself and the portfolio companies.

Other companies expected to IPO include Navoi Mining and Metallurgical Company (NMMC) and the copper mine Almalyk Mining and Metallurgical Combinat. The government is keen to get the ball rolling and the first of these IPOs that could appear as soon as next year.They are appealing to international investors as they typically spin outbns of dollars of revenue from the international commodity markets. Back at home, the challenge for smaller companies that are focused on their domestic business is much greater. So far, the biggest local IPO has not raised more than $5mn and trying to list anything with a bigger valuation is still not possible.

Privatisation pipeline expands

But the ongoing privatisation drive should help the local capital markets develop. Franklin Templeton’s fund has many of the biggest and sexiest blue chip names, but in parallel a state sell-off of other companies is underway. A presidential decree in April named a longer list of major state assets that will go under the gavel, including telecoms operator Universal Mobile Systems, automaker UzAuto Motors, insurance firm Uzbek Invest and petrochemical producer NavoiAzot.

ALKES handled one of the largest transactions so far – the sale of a 35% stake in rail freight operator Uztemiryulkonteyner for UZS200bn ($17mn). “That was our first big private market deal,” Ochilov said.Retail reforms and digital access

To broaden market participation, the government has from the start focused on encouraging the population to invest in the domestic capital markets with a slew of schemes and incentives. During the UzAuto Motors IPO, the underwriting team travelled the country, explaining the appeal of buying shares and a portion of the issue was reserved for Uzbek retail investors – an opportunity that few took up.

The state introduced a new retail investment programme in June 2024. Under the scheme, individuals who invest in listed bonds or equities receive a 12% income tax exemption, subject to a 12-month lock-up. A new mobile app - Jett - has also made it easy to sign up and invest thanks to Uzbekistan's open banking hierarchy, and has attracted tens of thousands of new investors to the market. To open an account, all you need is a tax ID number and then scan your face. The accounts are opened using ALKES brokerage infrastructure.

The Central Securities Depository has also developed an app of its own. A key innovation with the app is that company dividend payments are credited directly to the investors account. Previously each individual shareholder had to write a physical letter to the company requesting their dividend payment that the company then had to process and pay, creating a formidable bottleneck. Now the whole system has been digitised and automated.

Getting dividend payments is key to bringing in more retail investors: the reason why the Uzbek Commodities Exchange is such a popular stock is it has locked in a 85% of profit payout as dividends each year. By contrast, Uzbek Steel has previously announced that it would not pay dividends for the next two years as it needed the capital to invest into boosting production.

“They stopped paying dividends to fund capex, and retail investors immediately sold off,” Ochilov explained. “Retail investors strongly value dividends, and withholding them often affects sentiment.”

Link to Clearstream could open floodgates

The revolution on the horizon is hooking up Uzbekistan’s capital markets to the global financial system by bringing in the international payments and settlements Clearstream system. Russia’s market was revolutionised in 2012 after being connected to Clearstream which allowed traders to buy Russian bonds and stocks from the comfort of their chairs on trading desks in London and New York. The Ukrainian local OVDP bond market was similarly transformed by the same innovation, creating a new pool of capital worth severalbn dollars for the state issued local treasury bonds.

Uzbekistan is already in talks with Clearstream, which would allow foreign custodians to hold local securities, but preparatory work is needed. Currently, corporate securities and sovereign bonds are held in two separate depositories. “Clearstream is primarily interested in government securities, especially T-bills, so the first step is to finalize the integration of both depositories,” Ochilov said. “Once that’s completed, it will unlock real connectivity — allowing Uzbekistan to link directly into the global financial system.”

And work to continue to deepen the market is well in hand. New legislation is being prepared to allow foreign currency bond issuance and the listing of foreign equities on the TSE. Companies are eager to issue US dollar bonds to reduce borrowing costs.

“The prime US dollar lending rate here is 12-14%, while banks pay just 5-7% on dollar deposits,” Ochilov noted. “The other factor in the equation is soum devaluation has been running at 6-7% for the last few years, but in the first half of this year it fell to under 1% in early 2025. FX-denominated instruments are becoming increasingly attractive that will generate some real interest when our market is connected to the international system.”

Emerging investment funds

One change that is awaited by the market is the emergence of local investment funds. Despite rising interest from institutional investors, investment funds remain largely absent. In the 1990s, over 100 funds operated as part of the first attempted privatisation process – buying 20% stakes in companies and using dividend payments to acquire more. All have since shut down. “Now that the UzNIF was created, we expect to see meaningful development in the investment fund space,” Ochilov said. “There is strong potential for well-regulated, long-term investment vehicles to emerge.”

From momentum to conviction

“When over $30bn in agreements are signed at a single event like the Tashkent International Investment Forum, it’s no longer just interest — it’s conviction,” said Ochilov. “Uzbekistan is no longer a frontier — it’s becoming a destination.”