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Uzbekistan plans to privatize at least 20 state-owned companies by 2023

Business Materials 16 November 2019 13:42
Uzbekistan plans to privatize at least 20 state-owned companies by 2023

BAKU, Azerbaijan, Nov. 16

By Fakhri Vakilov - Trend:

It is planned to privatize at least 20 large state-owned companies in Uzbekistan by 2023, said Atabek Nazirov, director of Uzbekistan’s Agency for the Development of the Capital Market, Trend reports citing Uzbek media.

Nazirov made the remark at the international conference - "The role of the capital market in the development of Uzbekistan’s economy".

It was noted at the conference that in the conditions of the economy being re-credited by the banking sector with an excessively high level of state participation, development of the capital market is of particular importance for accelerating the pace of economic development.

The most pressing tasks for the development of the capital market are:

-Bringing the legislation in line with the requirements for frontier markets (markets that are just starting to develop);

-Creating an ecosystem of the financial market, which includes brokers, pension funds, insurance companies and banks;

-The creation of a mechanism to attract funds of the population to the stock market - both by cultivating collective investment institutions, and by providing simple and understandable access to the market for individual investors.

Nazirov said that the largest privatization program of state-owned companies is currently being prepared.

“In order to give an impetus to the development of the capital market, we plan, together with the State Asset Management Agency, to privatize assets as soon as possible. At the first stage, at least 20 largest state-owned companies will be privatized,” Nazirov said.

Sunnatullah Bekenov, Director of Uzbekistan’s State Assets Management Agency, announced his readiness to support the capital market by expanding the practice of conducting primary (IPO) and secondary (SPO) placement of state-owned companies.

According to him, the Management and Privatization Strategy of state-owned enterprises will be adopted, which provides for the criteria for maintaining state ownership of enterprises and their transformation into efficient enterprises that can compete in the domestic and foreign markets.

By 2023, it is planned to double the income from dividends to the state budget, conduct an IPO and SPO of at least 20 state-owned companies, reduce the number of state-owned enterprises to 50 percent and issue bonds of at least 50 state-owned companies.

According to estimates, as a result of the IPO of 10 large state-owned enterprises, new companies with a capitalization of $13 billion will appear on the market, and the number of shares in free float will increase by $1.3 billion.

The Agency for the Development of the Capital Market is developing a capital market strategy for 2020–2025, the implementation of which is expected to bring the volume of freely traded securities to 10 percent of GDP (now this figure is 0.2 percent of GDP) or $6.3 billion in case of an annual GDP growth of 5 percent.

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