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Uzbek Stock Exchange Loses Third of Trading Volumes

However, the number of transactions increased up to 2.4 times

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According to Portfolio Investment, trading volumes of stocks on Toshkent stock exchange fell to 36.15% from $71.8 million in 2018 to $45.8 million in 2019. 

Evgeniy Mozheyko, Executive Director of the Freedom Finance investment firm in Uzbekistan, said the decrease in trading volumes on the local exchange is a result of a lack of state-owned and quasi-public corporations’ stocks in free circulation.

“Many are interested in these stocks, but investors and our clients are not able to buy them because the government is not going to sell its shares through an exchange. If there were blue chips on the market, trading volumes and the number of transactions might be much bigger. At the moment, these companies allow only 5% of their shares into free circulation, so it looks like sellers do not want to sell them and buyers can’t buy them. This is what leads to the decrease of trading volumes on exchange, and this situation might be improved only under government program on privatization,” Mozheyko stated.

Portfolio Investment thinks that the decrease was determined by changes in Uzbek legislation and economy last year.

“Before any investments, most investors prefer to wait for game rules to be clearer,” the investment company said.

Avesta Investment Group stated that in 2018, Uzbek banks were forced to increase registered capital up to $10.5 million due to legislative changes. There were no equivalent changes in 2019. Thus, shares issued in this period were decreased two times from $61.7 million in 2018 to $33.3 million in 2019.

However, the number of transactions rose by 2.4 times, from 13.7 thousand to 32.6 thousand.

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