Models of Integrating Uzbekistan’s Stock Market into Global Markets

Abstract

Financial market integration plays a critical role in enhancing economic growth, capital flows, and investment diversification. Well-integrated stock markets attract global investors, improve liquidity, and reduce capital costs. Uzbekistan’s stock market has historically been underdeveloped, with low capitalization and limited investor participation. Since 2017, reforms including foreign exchange liberalization, IFRS adoption, and partial privatization have aimed to modernize and integrate it into global markets. While models from the EU, ASEAN, and EAEU offer valuable lessons, there is limited research comparing these frameworks to identify the most suitable integration pathway for Uzbekistan. This study examines Uzbekistan’s integration prospects by analyzing market size, regulatory reforms, and institutional mechanisms in comparison with regional and global benchmarks. The market capitalization increased from 6.72% of GDP in 2021 to 16.35% in 2024, indicating progress yet remaining far below global averages. Comparative analysis shows Uzbekistan is adopting a hybrid integration model, combining domestic market deepening with regional cooperation, particularly through potential alignment with EAEU standards. The study integrates quantitative market performance indicators with qualitative assessments of institutional reforms, providing a multidimensional view of Uzbekistan’s evolving integration model. The findings suggest that Uzbekistan can accelerate integration by strengthening market infrastructure, expanding cross-listing opportunities, harmonizing regulations with regional partners, and adopting best practices from ASEAN and EU frameworks. This dual strategy could enhance market depth, attract foreign capital, and position Uzbekistan as a competitive player in regional and global capital markets.