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.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

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.



Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
Emerging markets

Emerging markets: buy when the news is bad

Emerging markets are being squeezed by local turmoil and by more general factors. But bad news can spell opportunity for investors.
5 Nov 2019

Emerging markets bounce back after a miserable few months

Investors in emerging markets have been enjoying some long-awaited relief after a miserable few months.
13 Sep 2019
Emerging markets

Strong dollar squeezes Asian markets

Trade war uncertainty means that the MSCI Emerging Markets Currency index is on course for its worst month since May 2016.
30 Aug 2019

Most Popular

Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020

Currency Corner: how is the New Zealand dollar doing against its US counterpart?

The New Zealand dollar has been doing well against the US dollar in recent months, but has started to wobble a little. Is it still a buy? Dominic Fris…
20 Jan 2020
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Jan 2020
House prices

UK house prices may be heading for a Boris bounce

The latest survey of estate agents and surveyors from the Royal Institution of Chartered Surveyors is "unambiguously positive" – suggesting house pric…
16 Jan 2020