Uzbekistan opens up to investors

Few had expected Uzbekistan's president, Shavkat Mirziyoyev, to change much when he took over in 2016. But he has embarked on major reforms, making it a frontier market to watch.

Uzbekistan, until recently, was a market "almost untouched by Western capital", says Laurence Fletcher in the Financial Times. As a dictatorship, the country ranked alongside North Korea on political rights and civil liberties. With widespread corruption and currency controls ,"it was off limits for most investors". Few had expected President Shavkat Mirziyoyev who served as prime minister under the previous president to change much when he took over in 2016. But he has "shocked the international community by embarking on major reforms".

The new government has released political prisoners and simplified the tax code, "to turn it into a mechanism for actually collecting tax, rather than bribes", says The Economist. It restructured state-owned companies and devalued the currency, bringing the official and black-market rates into alignment.

Uzbekistan has leapt up the World Bank's Ease of Doing Business rankings, from 166th in 2012 to 76th in 2019. Last month it raised $1bn in its first international bond offering. But serious hurdles remain. The Tashkent stockmarket's public float only amounts to $300m (compared with the FTSE All-Share's $3.3trn). And as with many frontier markets, corporate governance is a "major risk", says Fletcher. Cronyism endures and there is no political opposition. Still, this is a frontier market to keep an eye on.

Recommended

Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
China’s new small-cap stockmarket
China stockmarkets

China’s new small-cap stockmarket

China has announced plans to establish a new stock exchange in Beijing that will be aimed at small and medium-sized firms.
10 Sep 2021
Japanese stockmarket enjoys a “Suga rush” as PM steps down
Japan stockmarkets

Japanese stockmarket enjoys a “Suga rush” as PM steps down

The Japanese stockmarket has hit a 30-year high following the resignation of prime minister Yoshihide Suga.
10 Sep 2021
Evergrande: is China facing a Lehman Brothers moment?
Chinese economy

Evergrande: is China facing a Lehman Brothers moment?

China's property market is overheating. And one of its biggest developers, Evergrande, is in struggling to repay its debts. John Stepek looks at what'…
9 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021