Economic Transformation of Uzbekistan in the International Financial System

On May 13, 2026, Uzbekistan completed the largest IPO in the history of its capital market. The National Investment Fund of Uzbekistan (UzNIF) became the first Uzbek issuer to list its shares simultaneously on the London Stock Exchange and the Republican Stock Exchange “Toshkent.”

On May 18, the fund began unconditional trading on the London Stock Exchange. Trading also commenced on the Tashkent exchange on the same day, giving both international and domestic investors access to a portfolio of Uzbekistan’s state-owned assets.

The placement of UzNIF marked the country’s first international IPO and one of the most significant milestones for the financial system of New Uzbekistan. For the first time, international investors were offered diversified exposure to the country’s state assets through a single market instrument.

The fund holds stakes in 13 major state-owned enterprises in the energy, utilities, telecommunications, banking, and transport sectors. As of the end of 2025, the portfolio’s net asset value was estimated at $2.44 bn. The transport sector accounted for 32.4% of the fund’s assets, followed by energy (19.1%), telecommunications (15.2%), utilities (14.9%), and banking (13.4%).

The fund’s largest assets include Uzbekistan Airways, Uzbektelecom, Uzbekhydroenergo, railway infrastructure, and SQB Bank. The net asset value of Uzbekistan Airways alone was estimated at approximately $403 mln.

A particularly important aspect of the transaction was the involvement of Franklin Templeton as the fund’s trustee and professional asset manager. The Ministry of Economy and Finance engaged Franklin Templeton to manage the fund’s assets, and the management mandate was formally transferred to the company in 2025.

For international markets, Franklin Templeton’s participation served as a strong signal of confidence in the quality of corporate governance, the transparency of the transaction structure, and the fund’s long-term strategy. Marius Dan, Head of Franklin Templeton’s Uzbekistan National Investment Fund, described the IPO as “a historic moment for Uzbekistan’s capital market” and the country’s first fully fledged international equity offering.

From Currency Liberalization to a Listing in London

The IPO of the National Investment Fund of Uzbekistan is the culmination of nearly a decade of economic transformation. Since 2017, Uzbekistan has undertaken a far-reaching transition toward a more open and integrated economy. The country liberalized its foreign exchange market, removed restrictions on currency conversion, legalized foreign exchange transactions through the banking system, and eliminated the dual exchange rate regime.

During this period, GDP per capita increased from $1,781 to $3,900, unemployment declined from 10.5% to 4.9%, and real household incomes rose by more than 83%.

Trade policy also underwent substantial reform. The average import tariff was reduced from 15.3% to 7%, and zero import duties were introduced for 59 categories of food products. Uzbekistan has now reached the final stage of negotiations to join the World Trade Organization. Against this backdrop, the country’s exports grew 2.7-fold between 2017 and 2025, rising from $12.9 bn to $35.5 bn.

Domestic economic reforms were equally significant. State price controls were abolished in several sectors, including grain and cotton, thereby expanding the role of market mechanisms in the economy.

The most visible transformation occurred in investment. Gross fixed capital formation increased from approximately $14 bn in 2017 to $47 bn in 2025. Foreign direct investment rose more than fivefold, from $2.4 bn to $12.5 bn.

The number of free economic zones expanded from 3 to 46. Around 700 industrial zones were established, including 200 youth industrial zones and 500 small industrial zones. By the end of 2025, approximately 2,800 public-private partnership projects with a total value of $29.2 bn were under implementation.

At the same time, Uzbekistan developed an institutional framework to support long-term capital inflows. The country signed 54 double taxation treaties and more than 50 agreements on the protection and promotion of investments.

Together, structural reforms, macroeconomic stability, and robust domestic market growth have reshaped international perceptions of Uzbekistan and laid the groundwork for the country’s entry into global capital markets.

A Signal to International Investors

As part of the international offering on the London Stock Exchange, the fund issued global depositary receipts (GDRs). Each GDR represents 64,700 UzNIF shares. The offering price was set at $25 per GDR.

The IPO raised approximately $603.6 mln, valuing the fund at around $1.95 bn. About 31% of the fund’s equity was sold in the transaction. If the over-allotment option is exercised in full, the total deal size could increase to approximately $691 mln.

The UzNIF IPO was more than four times oversubscribed.

The cornerstone investors included BlackRock, Franklin Templeton, Redwheel, and Allan & Gill Gray Foundation, which collectively committed approximately $300 mln to purchase GDRs.

The international coordinator of the transaction was Jefferies. Other bookrunners included Abu Dhabi Commercial Bank, Raiffeisen Bank International, WOOD & Company, and Auerbach Grayson.

For the London Stock Exchange, the UzNIF transaction became the largest IPO of 2026 and the biggest IPO among closed-end investment funds since 2021. By deal size, it also ranked among the largest IPOs in Europe this year.

The overwhelming majority of the offering was placed with international investors. Around 97% of the transaction was allocated through the London tranche, while approximately 3% was sold in the domestic market.

On the Republican Stock Exchange “Toshkent,” 47.94 bn shares were offered. A total of 4,943 transactions were executed during the IPO, amounting to UZS 214.61 bn (approximately $17.78 mln). Retail investors in Uzbekistan were offered a 5% discount on shares in the domestic tranche.

Following the completion of the IPO, the market began establishing its own valuation of the fund. During the first hours of trading on the Tashkent exchange, turnover exceeded UZS 1 bn. More than 1,100 transactions were completed, and the share price rose by over 37% relative to the discounted retail offering price.

By the middle of the trading session, buy orders exceeded sell orders by nearly three times. Demand in the order book reached approximately 50.8 mln shares, compared with 17 mln shares offered for sale.

A similarly positive trend was observed on the international market. During the first trading session, the fund’s GDRs rose to as high as $28, compared with the $25 offering price, before stabilizing at around $27 per receipt.

Against the backdrop of the IPO, the fund approved its long-term development strategy for 2025–2035. The decision was adopted by UzNIF’s shareholder on May 15. Fund documents describe 2025 as a formative year and a transition toward a fully market-based asset management model.

The performance of the trustee and the supervisory board during the initial stage was assessed as satisfactory.

Only a few years ago, the prospect of an Uzbek issuer entering international capital markets on such a scale appeared unlikely. Today, the UzNIF IPO is widely viewed as a clear indicator of a new stage in Uzbekistan’s integration into the global financial system.

CERR Public Relations Sector