Volume 03 Issue 05-2023
91
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
05
Pages:
91-101
SJIF
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FACTOR
(2021:
5.
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)
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5.
705
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(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
This article examines and analyzes the essence and specific aspects of various methods of attracting capital from the
international financial market, the processes related to the organization of effective capital attraction and efficient
use through the international financial market, IPO practice. In addition, various research methods were used to
analyze the optimal use of cheap and long-term financial resources through the use of various methods of attracting
capital through the international financial market. Also, the essence, development trends of the international financial
market, main aspects of international financial assets, characteristics of IPO practice were analyzed. Scientific
conclusions and suggestions on further development of Uzbekistan's participation in the international financial
market and attracting and using foreign capital are given.
KEYWORDS
International financial market, IPO, bonds, capital, international financial assets, capital market.
INTRODUCTION
It is known that the demand for financial resources is
increasing day by day in the conditions of fierce
competition in the world economy and financial and
economic globalization. Based on this, enterprises in
developed and developing countries are trying to solve
financial issues during their activities by attracting
Research Article
FEATURES, ANALYSIS AND RESULTS OF METHODS OF ATTRACTING
FINANCIAL RESOURCES FROM THE INTERNATIONAL FINANCIAL
MARKET
Submission Date:
May 21, 2023,
Accepted Date:
May 26, 2023,
Published Date:
May 31, 2023
Crossref doi:
https://doi.org/10.37547/ijmef/Volume03Issue05-13
Sadullaeva Mohinur Gayratjon Kizi
Teacher Of Shakhrisabz Branch Of Tashkent Institute Of Chemical Technology, Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ijmef
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 05-2023
92
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
05
Pages:
91-101
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
capital not only from the national market, but also
from the international financial market. They are trying
to introduce themselves in the international market,
strengthen their position and expand their activities at
the international level.
Further development of attracting capital from the
international financial market in our country,
"developing the capital market, fundamentally
improving the investment environment, deepening the
process of selling state shares, reducing the state's
participation in the economy, including transitioning to
modern approaches to managing state assets, making
the capital market one of the leading factors of
economic development that it is important to
transform the country's economy into one" and a
number of reforms for its development are still being
continued in our country. The Decree of the President
of the Republic of Uzbekistan No. PF-6207 dated April
13, 2021 is also cited as a priority reform direction [1].
Currently,
the
modernization
and
innovative
development of the economy increases the demand
for financial resources on a large scale. This process
shows that there is a need to attract capital from the
international financial market. This shows the urgency
of attracting capital by actively participating in the
international financial market.
MATERIAL AND METHOD
Several economists have studied the scientific-
theoretical and practical aspects of the national
financial market and the international financial market
and the process of raising capital from it in their
scientific works.
Y. Polyakova emphasized that international finance is
the sum of financial resources used in international
economic relations. [2].
According to J. Ataniyazov, E. Alimardonov,
international finance is a concept that represents the
set of international financial resources and their
movement. He believed that international financial
relations represent economic relations in the process
of distribution and use of financial resources formed at
the international level to achieve certain goals. [3].
Based on the above, Bekmurodov A.Sh, Abdullayev
Z.A, Badalov B.M. put forward the idea that the
international financial market is the accumulation of
free financial resources in the global system and their
provision to borrowers [4].
According to S.E. Elmirzayev, joint-stock companies as
stock market issuers can place their shares in open and
closed subscription. The issue of attracting foreign
capital is important in increasing the international
competitiveness of joint-stock companies operating in
our country, and this issue is implemented by placing
shares on international stock exchanges in the form of
open subscription, and directly affects the increase in
the quality of production and service. expressed his
opinion about the effect [5].
In today's modern world, the issue of ecology is very
serious, especially the transition to renewable energy
sources, the improvement of projects that improve the
Volume 03 Issue 05-2023
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International Journal Of Management And Economics Fundamental
(ISSN
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VOLUME
03
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Pages:
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SJIF
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(2021:
5.
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(2022:
5.
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(2023:
7.
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)
OCLC
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1121105677
Publisher:
Oscar Publishing Services
Servi
environmental situation, and the control of various
risks are becoming part of our life activities. Therefore,
it is necessary to pay special attention to the financing
of environmental projects, and for this purpose, a new
financial instrument - "green" bonds - has appeared.
They differ in structure and behavior [6].
The international financial market is the accumulation
of available financial resources in the global system and
their provision to borrowers. [4].
RESULTS. The international financial market is an
integral part of the world economy. We all know that
economic relations are based on the world-class
international division of labor, and it provides an
opportunity for more rational use of the world's
resources and leads to deepening of specialization in
international production. These processes lead to the
formation of new forms of cooperation between
countries, including in the financial sector.
The development of the international financial market
occurs in parallel with the development of world
money and world economic relations.
International capital movement is the transfer of
money or goods with a relative surplus outside the
territory of the country. A synonym for this phrase is
capital export or capital outflow.
The formation of the international financial market has
gone through several stages of development [4].
Stage I. Including the 1860s of the XIX century, this is
directly related to the development of foreign trade
and the formation of the foreign exchange market.
Stage
II.
It
includes
the
processes
of
internationalization of operations in the national
markets of credit funds in the 1950s of the 20th century
and the formation and development of the
international credit funds market in the 1960s.
Stage III. In the 1970s, the formation of the long-term
international credit market and the organization of the
international investment market, the liberalization of
national stock markets, and the formation of
international stock markets took place. In the 1980s,
processes related to the rapid development of
transnational banks and companies, the further
development of the international investment and
stock market, and the increase of operations in the
international credit market took place.
Stage IV. In the 1990s of the 20th century, the fund
segment of the financial market developed rapidly, and
the international derivatives market was formed. In the
2000s of the 21st century, we can observe the rapid
development of the international derivatives market.
The formation and development of the international
financial market took place directly in parallel with
international trade.
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Publisher:
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Servi
Figure 1. COMPOSITION OF THE INTERNATIONAL FINANCIAL MARKET [7]
Through the international financial market, the
production of products and services can be financed
indirectly (loan (deposit) market) and directly
(securities).
Individual financial markets are interconnected.
Different financial markets are classified into money
market or capital market based on the maturity of the
financial instruments in circulation.
The money market (short-term capital market)
includes the trading of securities with a primary
maturity of one year or less. This can include treasury
bills, commercial securities, and certificates of deposit
(CDs).
The capital market (long-term capital market) includes
securities with a primary maturity of more than one
year. Examples of this are corporate bonds, shares,
treasury notes and bonds.
Table 1
CAPITAL MARKET INSTRUMENTS [4]
International financial
market
Derivative financial
instruments market
Currency market
Investment market
Gold market
Insurance
market
Stock market
Credit (deposit)
market
Volume 03 Issue 05-2023
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(ISSN
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VOLUME
03
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05
Pages:
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SJIF
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(2021:
5.
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(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
Instruments
Coverage period
Principal borrowers
In the secondary
market
corporate actions
–
corporations
very active for large
corporations
mortgage lending
15 to 30 years
principal owners and
other investors
moderately active
corporate bonds
From 2 to 30
years
corporations
active
US government securities:
notes and bonds
From 2 to 10
years to 30 years
US Government US
Government
very active very
active
Government Agency
Securities
up to 30 years
State institutions
active
municipal bonds
From 2 to 30
years
state and local
governments
active
International financial assets include the following
features:
1. Features of strength, reliability, emdiving the
results of work. The reliability of financial assets is
caused by the consumption of goods, all processes of
exchange and production, as well as the time factor.
2. Liquidity. This feature of financial assets shows their
ability to be quickly exchanged for other goods at any
time.
3. Mobility. In the modern economy, it is precisely
financial assets that have the property of quickly
reaching that place, if there is an opportunity to use
them effectively in any part of the world.
4. Universality. Nowadays, all economic relations are
accompanied by financial relations.
5. The property of dividing financial assets without
dividing real assets. This feature of them makes it
possible to attract not only large investors, but also the
funds of small investors in the organization of
investments, saves the time factor, increases the speed
of investment turnover, and increases the return on
capital.
6. Commodity-like nature of securities. After buying
and selling securities, they are not consumed,
securities do not go out of circulation until they are
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Publisher:
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extinguished. The owner of securities can bring them
to the market and sell them at any time.
There is a significant need for capital to increase the
international competitiveness of joint-stock companies
operating in our country. This shows that attracting
foreign capital is important. This is also solved by
placing shares on international stock exchanges in the
form of open subscription and has a positive effect on
the growth of production and service quality. Below
we will give our opinion about the practice of placing
shares in the order of open subscription.
The practice of placing shares in an open subscription
procedure is called IPO (Initial Public Offering) for
short. An IPO is a placement of shares on the market by
the issuer in the method of primary public subscription,
during which they reach a wide range of investors and
carry out free trade on the stock exchange. In other
words, IPO means that the issuing company's shares
are offered for sale on the open market for the first
time. In this way, investors who are interested in the
company's shares can freely buy them on the stock
exchange. As a result of the circulation of the
company's securities on the stock exchange, they
become the subject of free trade, their liquidity
increases and their market price increases to the
maximum. With the help of IPO, the company will have
the opportunity to cover current costs and attract
long-term external financial resources for the
implementation of large projects. The processes
required for an IPO and their implementation increase
the transparency of the company and allow an
objective assessment of its financial condition [5].
Table 2.
LARGE JOINT STOCK COMPANIES WITH STATE PARTICIPATION WHICH ARE DESIGNATED FOR THE PRIMARY AND
SECONDARY PUBLIC PLACEMENT OF THEIR SHARES ON THE STOCK EXCHANGE IN 2022-2023 [8]
T/N
Name of enterprises
Form of
public
placement of
shares
Time to prepare
for public offering
of shares of the
company ("IPO").
Announcing the
results of the IPO
1.
"Uzmetkombinat" JSC
IPO
September 2022
IV quarter of 2022
—
I
quarter of 2023
2.
"Kurilishmashlizing" JSC
IPO
December 2022
At times agreed with
the underwriters
3.
"Uzbekistan Airways" JSC
IPO
September 2022
At times agreed with
the underwriters
4.
"Uzbekinvest" JSC
IPO
December 2022
II-III quarter of 2023
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Publisher:
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5.
"Uztransgaz" JSC
IPO
According to the
recommendation
of underwriters
and consultants
According to the
recommendation of
underwriters and
consultants
6.
AT People's Bank
IPO
September 2022
II quarter of 2023
7.
"Uzagrosugurta" JSC
IPO
November 2022
III-IV quarter of 2023
8.
"Kishloq Kurilish Bank"
ATB
IPO
During 2022
October 2022
9.
"Agrobank" JSC
IPO
August - October
2022
June 2023
10.
"Uzmilliybank" JSC
IPO
October 2022
July 2023
11.
"Uzbekneftgaz" JSC
IPO
2022-2023 years
March 2023
12.
"Microkreditbank" ATB
IPO
December 2022
June 2023
13.
"Uzauto Motors" JSC
IPO
August 2022
(Expected in the IV
quarter of 2022
—
the
I quarter of 2023)
14.
"Uzavtosanoat" JSC
IPO
October 2022
March 2023
15.
AT "Alokabank"
IPO
January 2023
April 2023
16.
"Uztemiryolcontainer"
JSC
IPO) / (SPO
October 2022
June 2023
17.
"Uzbekistan Post" JSC
SPO
December 2022
According to the
recommendation of
underwriters and
financial consultants
18.
"Uzbekgeofizika" JSC
IPO
October 2022
II-III quarter of 2023
19.
"Universal Insurance" JSC
SPO
September 2022
June 2023
20.
"Alskom" JSC
SPO
September 2022
June 2023
21.
"Dori-Darmon" JSC
SPO
September 2022
Within one month of
the secondary public
offering of shares
In Table 2, in 2022-2023, 21 large joint-stock companies
with state participation were scheduled to place their
shares on the stock exchange through primary and
secondary public placement. At the IPO of UzAuto
Motors, only 0.29 percent of the company's shares
were sold instead of the 5 percent announced at the
road show. Although the company was able to attract
5 million dollars (56.9 billion soums) instead of the
expected 90 million dollars, this placement became the
largest indicator in the history of the country. On
February 20, 2023, trading of UzAuto Motors shares
began on the secondary market (RFB) of the
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Publisher:
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Servi
"Tashkent" Republican Stock Exchange. The company
was due to go public last year, but the closing date was
pushed back twice due to low demand. For the first
time, from December 22 to December 28, 2022, and
then until February 15, 2023. As a result, the company's
IPO subscription process took more than two months.
Institutional investors bought 80% of the total volume
of shares sold, and individuals bought 20% (about 1
million dollars). The rest of the joint-stock companies
are also expected to carry out their IPO and SPO
operations in 2023.
If we focus on the analysis of IPO practices carried out
by developed countries, the share of stock market or
stock exchange capitalization in the country's gross
domestic product (GDP/GDP ratio) in developed
countries is very high, and this indicator is New York
and 70-90 percent on the Tokyo stock exchange, 100-
120 percent on the Korean and London stock
exchanges, 1000-1200 percent on the Hong Kong stock
exchange [9].
Figure 2. TOP US IPO COMPANIES BY DEAL VOLUME IN 2021 (US$ BILLIONS) [10]
On November 10, 2021, electric vehicle manufacturer
Rivian Automotive raised $13.7 billion through an IPO.
It was the largest initial public offering (IPO) in the
United States in 2020. And this year, each of the ten
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largest IPOs was able to raise more than two billion US
dollars.
DISCUSSION
An IPO is a long and expensive process. This requires
cooperation with investment advisory firms to ensure
that all requirements are met and the process is
optimally planned. the company is subject to
government and public scrutiny - any negative
information, such as rumors of insider trading, can
cause the share price to fall. Also, the timing of the
public release is very important. Even a thriving
company can have very low profits during a recession.
In general, the public offering of shares is a positive
situation in the dynamics of the market development,
and it implies having a large amount of reserves for the
growth, development and expansion of the company,
and it implies access to foreign capital markets for the
future prospects of the company in the long term. It
should be noted that the financing of large investment
projects in corporate structures is of systemic
importance for the country's economy, but this is
mainly done by attracting private investors. For this
purpose, the IPO mechanism, which creates
opportunities for companies, also allows attracting
national and foreign investors. In this respect, the
public status of the company makes it possible to
attract additional capital by issuing additional shares
and selling them on the capital market.
CONCLUSION
In recent years, a number of activities and activities
have been carried out to reform the securities market
and improve the legal system in this area, effectively
regulate the capital market, expand cooperation with
international financial institutions, and develop capital
attraction from the international financial market.
Today, there are a number of urgent problems and
shortcomings that await their solution in connection
with the further development of the capital market,
the promotion of foreign capital attraction, the
formation of a competitive environment and the
increase of the liquidity of the stock market. They
consist of:
• the share of freely traded securities of companies in
relation to the country's gross domestic product is low
(0.3 percent);
• most of the transactions carried out on the stock
market, i.e. more than 70% of the volumes on the stock
exchange, are accounted for by state-owned
enterprises;
• market infrastructure is insufficiently provided with
modern information and communication systems;
In general, the placement of shares in the international
stock exchanges in the form of open subscription, that
is, about the features of IPO operations
we can state the following conclusions:
First of all, public offering of shares requires relatively
high costs and a lot of time, but allows attracting a
large amount of capital. This will allow the
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implementation of new promising projects in the
future.
Secondly, it is important not to ignore the
shortcomings of this practice in the process of
organizing and conducting IPO operations by
corporate structures of strategic importance. Because
the entry of some investors into the activities of
corporate structures has a high probability of having a
negative impact on the company's financial security.
Thirdly, through the circulation of Eurobonds, it will be
possible to use low-interest and long-term financial
resources. Directing it to projects that are intended to
be implemented in advance at the expense of the
funds involved and approved will further increase the
efficiency of its use.
Fourthly, there is also an opportunity to have a positive
international credit history due to the redemption of
Eurobonds at maturity, and thereby gain confidence in
attracting capital in the future; Fifth, it is necessary to
take into account the level of initial payments and
annual payments, which are one of the listing
requirements, when organizing the practice of publicly
placing shares of joint-stock companies operating in
our country on international stock exchanges. Because
it is important that the implementation of such
payments does not seriously affect the financial
condition of joint-stock companies.
REFERENCES
1.
APPENDIX 1 to the Decree of the President of the
Republic of Uzbekistan No. PF-6207 dated April 13,
2021 https://lex.uz/docs/-5371091
2.
E. Polyakova Finance and credit. Uchebnoe
posobie.
http://www.lib.mn/blog/elena_polyakova/.
3.
J. Ataniyazov, E. Alimardonov, F. Hamidova.
Analysis of the international financial market, study
guide. - T.: TMI, 2019. Page 5.
4.
Bekmurodov A.SH., Abdullayev Z.A., Badalov B.M.
International financial market and institutions.
Study guide. - T.: "ECONOMY", 2019. - 302 p.
5.
Elmirzaev S.E, Boev B.J. -Organization and conduct
of operations of mass placement of shares
Scientific electronic journal "International Finance
and
Accounting".
No.
3,
June,
2018
www.interfinance.uz 2
6.
Yunitskaya Tatyana Sergeevna Evtushenko Sofya
Vitalievna
ASSESSMENT
OF
INVESTMENT
ATTRACTIVENESS OF "GREEN" BONDS Supervisor:
Kravtsova N.I. 250 c GREEN ECONOMY: THE
COURSE FOR SUSTAINABLE DEVELOPMENT IN
MODERN CONDITIONS Proceedings of the
International Scientific and Practical Online
Conference
of
Faculty,
Young
Scientists,
Practitioners and Students March 25, 2022
7.
J. Ataniyazov, E. Alimardonov, F. Hamidova.
Analysis of the international financial market, study
guide. - T.: TMI, 2019. 35 pages.
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8.
Resolution No. 446 of the Cabinet of Ministers of
the Republic of Uzbekistan dated 15.08.2022,
https://lex.uz/uz/docs/-6157949
9.
Mukhamedov F.T. Stock market: development
steps and problems Scientific electronic journal
"International Finance Journal". #3, June, 2017
www.interfinance.uz 3. 2
10.
https://www.statista.com/statistics/251168/largest-
ipos-in-the-united-states/
