At a meeting of the International Association of Exchanges of the CIS Countries (CIS IAE) in Tashkent, member exchanges adopted a new strategic plan, marking a new era of cooperation and development.

The focus of the meeting between the delegations of the Baku Stock Exchange (BSE) and the Tashkent Stock Exchange (TSE) was the exchange of experience and best practices. Chairman of the Supervisory Board of the BSE Farid Akhundov and Chairman of the Board Ruslan Khalilov shared their experience of the Baku Exchange’s transition to a new trading platform, emphasizing its advantages in increasing efficiency and liquidity.

Representatives of the BSE positively assessed the efforts of Uzbekistan to open access to the local stock market for foreign investors, having become familiar with new opportunities in this direction. The parties discussed possible joint initiatives to improve the infrastructure of the capital markets of Uzbekistan and Azerbaijan.

This cooperation can become a catalyst for the growth and integration of capital markets, not only of the two countries, but also in the region as a whole.

In addition, the Baku Stock Exchange is significantly ahead of the Tashkent Exchange in all key indicators. The BSE demonstrates higher trading volumes, a more diversified market structure, and active development of the corporate securities market. In turn, the TSE has its own stock index UCI and IPOs are already being held on its site. Moreover, last year there were three IPOs on the Tashkent Stock Exchange (UzAuto Motors, Uzbektelecom, Uzbekinvest). However, the volume of funds raised didn’t exceed $10 million, which is very modest for the economy of Uzbekistan. Meanwhile, the emergence of new players has affected the market. Compared to 2022, the number of transactions on the stock exchange has increased fivefold.

Transactions worth $16 billion were concluded at the Baku Stock Exchange in 2023, which is 75 times higher than at the Tashkent Exchange. Trading volume on the Baku Exchange in 2023 increased by 82.9% compared to 2022.

However, the number of transactions on the Tashkent Exchange was 317 times higher than the number of transactions on the BSE (there were 12,918 transactions with an increase of 23%).

On the Baku Exchange, repo transactions (63.6%) are dominated by Central Bank securities, followed by transactions with government securities (30.7%) and corporate securities (5.6%). On the Tashkent Exchange, the market structure is slightly different; stocks and bonds are listed there, and 477 transactions were carried out with the latter last year (a sevenfold increase over the year).

Thus, the parties have a lot to learn from each other, and even more so from other Commonwealth countries.

The key point of the meeting in Tashkent was the adoption of a new strategic plan for CIS IAE. The plan, developed based on the experiences and aspirations of member exchanges, aims to improve the transparency, accountability and efficiency of the association.

It includes measures such as improving the corporate governance system of the CIS IAE, strengthening cooperation with regulators and supervisory authorities, promoting the development of new products and services in the CIS capital markets, and increasing awareness of exchange activities among investors and the general public.

The new plan positions CIS IAE as a dynamic force capable of playing a leading role in the development of regional capital markets. It marks a move away from a fragmented approach towards a more holistic and strategic vision for the future of the CIS exchanges.

The impact of this event on the region is difficult to overestimate. The new strategic plan can stimulate the flow of investment into the region, promote the creation of more diversified and sustainable economies, and strengthen integration processes in the CIS.

It is expected that in the coming years we will witness significant changes on the CIS exchanges.