Why is this important
The official launch of trading in securities of the National Investment Fund of Uzbekistan on the London Stock Exchange is becoming one of the largest public offerings involving Uzbek assets in recent years. For the authorities, it also serves as a demonstration of state assets entering international capital markets and an attempt to attract long-term foreign investors. The simultaneous launch of trading in London and Tashkent is expected to increase interest in Uzbekistan’s stock market and expand the participation of retail investors within the country.
What happened
- The official opening ceremony for the main trading of global depositary receipts (GDRs) of the National Investment Fund of Uzbekistan on the London Stock Exchange will take place on May 18 alongside the opening of the trading platform. On the same day, trading of the fund’s shares will begin on the Tashkent Republican Stock Exchange.
- Earlier, on May 13, GDR trading within the framework of the IPO had already started on the London Stock Exchange. The acceptance of applications for the purchase of shares and depositary receipts ended on May 12.
- The majority of the offered securities were purchased by foreign institutional investors through GDRs, while retail investors and other participants on the Tashkent platform acquired nearly 48 billion shares.
Numbers and facts
- As part of the IPO, the Ministry of Economy and Finance offered investors 1.56 trillion shares of the fund, representing 31 percent of its share capital. The total amount of funds raised reached $603.6 million.
- The placement price of one share was set at 4.65 soums, while Uzbek retail investors purchasing securities worth up to 12 billion soums received a preferential price of 4.41 soums per share. The price of one global depositary receipt was set at $25.
- With a total of 5.05 trillion shares, the fund’s market capitalization at the placement price is estimated at $1.95 billion. Demand for the shares exceeded supply by more than four times.
- Jefferies International Limited, acting as the sole global coordinator of the IPO, retained the option to additionally place up to 15 percent of the sold GDRs — 3.51 million receipts. This mechanism may be used fully or partially within 30 days after the launch of GDR trading on the London Stock Exchange.
- After trading began, the value of the GDRs started to rise. Following trading on May 15, the price of one receipt reached $27.5, which is 10 percent higher than the IPO price. On the first trading day, May 13, the GDR price rose to $26, while on May 14 growth accelerated to $27.2.
Context
- For the government, the placement is becoming one of the largest examples of attracting foreign capital through an international exchange.
- The increase in GDR value during the first days of trading demonstrates strong investor interest in the placement and may attract additional attention to future IPOs of Uzbek state assets.
- The simultaneous launch of trading in London and Tashkent is also expected to boost activity in the domestic stock market.
- For retail investors, this creates an additional benchmark for assessing the value of the fund’s securities and monitoring future demand for Uzbek assets from foreign market participants.
