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Uzbekistan has fired the starting gun on listing state assets worth $2.4bn in London, marking the country’s first foray into global stock markets.
The Uzbekistan National Investment Fund said on Thursday it was targeting listings in London and Tashkent that are centrepieces of a push by President Shavkat Mirziyoyev to open up the economy.
It aimed to complete the listings by mid-May, according to people familiar with the matter.
London’s listings drought has not been aided by the Middle East conflict, although this week’s ceasefire announced by Iran and the US could boost investor confidence.
UzNIF, a bundle of minority stakes in 13 state groups that span Uzbekistan’s state airline, banks and power assets, has been managed by Franklin Templeton since last year in preparation for an international listing.
The planned listing “will be the first opportunity for international equity investors to gain exposure to Uzbekistan’s reform-driven and rapidly modernising economy”, said Marius Dan, manager of Franklin Templeton’s mandate.
Investors believe a successful initial public offering of the fund will be a guide to whether Uzbekistan will also list a major global gold producer in what could be a multibillion-dollar valuation.
Navoi Mining and Metallurgical Company, the world’s fourth-largest gold miner, has been considering an international listing, which investors said could be worth $20bn or more.
UzNIF, which is chaired by Jamshid Kuchkarov, Uzbekistan’s finance minister, is planning to list depositary receipts in London for international investors alongside an offering in Tashkent.
Mirziyoyev has liberalised the country’s banks and other sectors in recent years, but the economy remains significantly state-owned. Equity investors will expect to see signs that UzNIF will not be subject to political whims.
“We are demonstrating our readiness to operate in line with global standards — transparently, fairly and competitively,” said Saida Mirziyoyeva, Mirziyoyev’s daughter and head of his presidential administration.
Franklin Templeton is hoping to repeat a model set in Romania where it managed Fondul Proprietatea, a similar group of stakes in state companies, until 2024. Fondul reformed company governance and boosted capital returns after listing in London in 2015.
UzNIF said that its holdings were valued at $2.4bn at the end of last year by an unnamed Big Four firm. They included a 25 per cent stake in Uzbekistan Airways and a 40 per cent stake in a state hydropower producer, each worth about $400mn.
The fund originally comprised 18 companies but was rejigged to focus on larger stakes in a smaller group of 13 in preparation for listing.
Franklin Templeton has added independent directors to the boards of the fund’s companies in recent months, with a view to preparing some of these groups for future individual listings, people familiar with the matter said.
A domestic listing of the fund would have a huge impact on the local market. Tashkent’s stock exchange reported $2.4mn in trades in February, out of a market value of $26.5bn, of which the free float was about $490mn.
