Securities

Even during the current global economic crisis, banks of Uzbekistan are improving their banking services and are actively working on restructuring assets being focused on various types of banking operations related to the support of real economy enterprises. Currently, commercial banks are focused on mitigation of risks while obtaining a stable/high income from their active operations. The domestic stock market is one of the priority areas in the development of the modern financial market.

Banks can actively participate in the stock market because there are all favorable conditions for the banks in the securities market. For example, legislative and regulatory acts regulating the work of banks do not contain restrictions on any functions in the securities market: issuers, investors, investment institutions. Financial solvency of banks and high profitability from banking operations gives the banks opportunity to divert significant resources to operations with securities. Reducing profit from traditional banking operations forces banks to work more actively with other alternative sources of income. Having extensive database about the financial and economic activities of clients, banks act not only as large issuers, but also as large investors. Actively using their potential, banks become very important members in the securities market which act not only as a direct participant, but also as an important subsidiary institution of the stock market that forms favorable conditions for the development of securities trading in general. Banks' need to attract additional resources to their share and circulating funds by issuing their own securities is one of the factors that activates banks in the securities market.

During the existence of the stock market of the Republic of Uzbekistan, commercial banks of the country have become not only active participants of this market, but also took over the tasks to form a market infrastructure. The National Bank of the Republic of Uzbekistan for Foreign Economic Activity is one of the banks taking leading positions in this area. Being the largest universal bank in the country, it acts on the stock market, primarily as an investor, guided by the national investment program aimed at expanding the manufacturing potential of enterprises.

In pursuance of Presidential Decree UP-4053 on Measures to Further Improve the Financial Stability of the Real Economy Enterprises dated November 18, 2008, as well as to develop the infrastructure of the securities market in the Republic of Uzbekistan, the Bank established two management companies: NBU INVEST GROUP LLC and NBU Investment LLC. The main statutory tasks of these companies include the attraction of foreign investment, the organization of investment funds, consulting, underwriting, depository services and effective asset management of subsidiaries established on the basis of the property of enterprises in default.

• Attraction and investment of funds in Uzbek Soums and foreign currency;

• SWAP transactions.

Key financial instruments of the Bank's operations in the securities market:

• government securities and bonds of the Central Bank of the Republic of Uzbekistan;

• deposit certificates and deposit (savings) certificates;

• corporate bonds;

• stock.

The Bank invests in securities subject to the receiving income from securities in the form of dividends, interest, forex gains, as well as by expanding the activities while attracting new clients, taking into account the requirements of liquidity of assets.

The Bank's own funds may also be invested in securities of issuers of strategic importance for the country's economy and/or the Bank.

The Uzbek National Bank can offer clients the following services in the securities market:

• Consulting service;

• Brokerage and dealer services both on the stock market and on the government securities market;

• Trust operations on trust management of investment assets.