Uzbekistan is laying the policy groundwork ahead of a planned debut international sukuk issuance, a development that would bring the Central Asian country’s capital markets to a vast set of global investors.
Uzbekistan’s high yields and strong fundamentals make the landlocked Central Asian nation a preferred credit for many emerging market investors.
In June this year, Moody’s upgraded Uzbekistan a notch from Ba3 to Ba2 with a stable outlook due to “sustained improvements” in the country’s institutional and policy framework.
“These developments indicate increasing policy effectiveness and have enhanced the country’s resilience to external shocks,” said Moody’s back then.
The sovereign witnessed another positive rating action in June when Fitch and S&P upgraded their outlooks from stable to positive while maintaining their BB ratings.
Simultaneously, the government, on August 12, held a press conference on a new draft law named “On the Capital Market.” The bill provides for expanding the range of financial instruments, developing market infrastructure, and improving state regulation.
The event was attended by Saibjan Khudaiberdiyev, Head of the Capital Market Development Department; Saulat Toreshov, Head of the Capital Market Regulation Department; and Valeriy Lee, Head of the Capital Market Ecosystem Development and Regulatory Innovation Division.
The objectives of the new draft law include attracting global depositories to the Central Asian nation’s national stock market, apart from adopting a new regulation in cooperation with international financial institutions.
According to the government data, the volume of share issuances in Uzbekistan increased from 189.7 trillion soums in 2023 to 265.1 trillion soums in 2025, reaching 269.4 trillion soums by July 1, 2026. Over the same period, the volume of corporate bond issuances grew from 1.06 trillion to 3.93 trillion soums, exceeding 7 trillion soums.
Total trading volume on the stock exchange increased nearly sixfold from 2023 to 2025, rising from 2.9 trillion to 17.6 trillion soums.
The draft of the new law consists of 16 chapters and 123 articles. During its preparation, current legislation was reviewed, taking into account modern market requirements and international practice. The EBRD, IFC, ADB, Islamic Development Bank, UNDP, IOSCO, US Department of Commerce, and SEC participated in the development, alongside state bodies, professional market participants, and representatives of market infrastructure.
The bill, expanding the list of financial instruments, provides for the introduction of options, swaps, futures, forwards, and contracts for difference. It also proposes to regulate covered bonds, securitized bonds, sustainable development bonds, and sukuk securities.
Sukuk gets special attention in the draft law, reflecting Uzbekistan’s Islamic finance push.
The bill provides for legal regulation of the issuance and circulation of sukuk, including partnership, ijara, trade, and agency types. To protect investors’ rights, the draft law has also proposed the introduction of the institution of a representative of sukuk holders and a special mechanism to confirm the compliance of transactions with Islamic finance standards.
The bill also aims to enhance capital market infrastructure by proposing the licensing of custodial activities and central counterparty operations. Additionally, it seeks to expand the powers of the Central Securities Depository and introduce self-regulatory organizations along with a representative for bondholders.
Meanwhile, Uzbekistan’s soum-denominated international bonds are set to be added to JP Morgan’s Government Bond Index (GBI-EM) for local currencies.
The inclusion will be effective from September 30, 2026. It will be the only CIS country that has its local currency sovereign bonds included in the index.
Uzbekistan is a regular issuer of local currency Eurobonds. Earlier in 2026, the sovereign printed S12.194 trillion (USD 1 billion equivalent) through a three-year 144A/Reg S bond offering. That deal was not only the biggest single-tranche issuance by Uzbekistan in the Eurobond market. It was also the largest local currency transaction across CEEMEA in the past 15 years.
There was strong demand for the deal, given the high yield and strong performance of the Uzbekistani soum versus the US dollar. Books reached over S19.5 trillion, and the deal is priced at 12.25%.
“Inclusion in the GBI-EM Index signals growing confidence among international investors in Uzbekistan’s economy and is expected to help broaden the investor base and lower borrowing costs when raising funds from external sources,” said the Central Asian country’s Ministry of Economy and Finance.