Uzbekistan Unveils New Capital Market Reforms to Attract $1 Billion in Investment

Uzbekistan has approved a presidential decree aimed at enhancing the investment climate in the country’s capital markets. According to the Ministry of Justice, the reform package is designed to attract $1 billion in new investments by 2030 through the introduction of modern financial instruments. As part of this strategy, authorities plan to issue corporate bonds worth five trillion Uzbekistani som (approximately $415 million) to expand funding opportunities for local businesses. The ministry noted that the decree also focuses on improving investor protection by introducing mechanisms expected to eliminate over 85 percent of current violations in the capital market. A key component of the reform is the indefinite extension of the “Regulatory Sandbox”, a special legal regime that allows financial institutions to test innovative products under simplified regulatory conditions. Within the sandbox framework, Uzbek legal entities can apply for participant status, while foreign organizations and local investment funds may offer financial services related to the safe custody and accounting of securities they issue or hold. The decree also permits issuers, in specific cases outlined by law, to release unsecured corporate bonds exceeding the size of their own capital, broadening fundraising options for businesses. Separately, Uzbekistan has taken a major step toward digital finance. As previously reported, the Wallet service on the Telegram messaging platform officially launched in Uzbekistan on December 9, giving over 27 million local users access to cryptocurrency transactions. The service supports major digital assets such as Bitcoin, Toncoin, and USDT, enabling users to buy, store, and transfer crypto using local payment systems. The launch reflects Uzbekistan’s broader ambition to position itself as a regional hub for regulated digital financial services.

Kazakhstan’s Strong Bond Sale Anchors Regional Capital Markets

The Republic of Kazakhstan once again captured global investor attention with its highly successful sovereign bond issuance in October 2025, underscoring its status as Central Asia’s benchmark borrower. The Ministry of Finance sold a $1.5 billion five-year Eurobond at a record-low 4.412% yield, about 85 basis points above U.S. Treasuries, after attracting nearly $4.4 billion in orders from a geographically diverse investor base spanning Europe, the U.S., and Asia - almost three times oversubscribed. Strong Market Reception and Competitive Pricing This five-year issue achieved the lowest yield in Kazakhstan’s independent history and was one of the tightest-priced five-year sovereign bonds among investment-grade peers, pricing inside higher-rated Poland, and modestly above Qatar’s comparable five-year yield. The Finance Ministry credited the result to investors’ confidence in Kazakhstan’s macroeconomic management and fiscal credibility, strengthened by the country’s ongoing budget and tax reforms enacted in 2025. These measures have reinforced perceptions of policy discipline and institutional reliability, enabling Kazakhstan to secure funding at exceptionally low costs. June 2025: Dual-Tranche Success In June 2025, Kazakhstan executed a $2.5 billion dual-tranche Eurobond comprising a 7-year $1.35 billion note at 5.0% and a 12-year $1.15 billion note at 5.5%. Investor demand was exceptional, with orders roughly twice the issue size from global funds across Europe, the U.S., and Asia. The transaction priced tightly against comparable BBB sovereigns, reflecting market confidence in Kazakhstan’s low debt levels, ample reserves, and consistent reform momentum. Together, the June and October offerings have demonstrated Kazakhstan’s ability to tap international markets repeatedly in 2025 on favorable terms, even amid global volatility. Fiscal Strength and Ratings Support Kazakhstan’s strong market performance rests on a robust fiscal foundation and solid credit ratings. Fitch Ratings has affirmed Kazakhstan’s long-term foreign-currency issuer default rating at ‘BBB’ with a Stable Outlook, noting the country’s low government debt - around 25% of GDP - and substantial sovereign net foreign assets supported by the National Fund and foreign-exchange reserves. Combined reserves and National Fund assets total roughly $93 billion, equal to about 31% of GDP. S&P Global Ratings, which upgraded Kazakhstan’s outlook to Positive in August 2025, forecasts 5.5–5.6% GDP growth and has commended progress in deficit reduction and institutional reform. The agency noted that Kazakhstan’s new Budget and Tax Codes, along with tighter fiscal rules and improved oversight of quasi-fiscal activities, are expected to strengthen fiscal consolidation and institutional transparency. These reforms, together with the country’s moderate debt burden and substantial sovereign assets, have helped sustain investor confidence. Kazakhstan’s ability to issue Eurobonds at yields tighter than some A-rated peers demonstrates that credibility in practice, and market participants now view the country as the regional benchmark sovereign in Central Asia. Uzbekistan: Reform Progress, Higher Yields In February 2025, Uzbekistan raised roughly $1.5 billion equivalent through a multi-currency sovereign issue — a $500 million 7-year U.S. dollar tranche at 6.95%, a €500 million 4-year euro tranche at 5.1%, and a UZS 6 trillion 3-year local-currency note at 15.5%. Total demand reached about $4.2 billion, nearly 2.8 times oversubscribed, underscoring strong...