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THE IMPORTANCE OF THE DEVELOPMENT OF FINANCIAL
MARKETS IN THE ECONOMY OF UZBEKISTAN
Ozatbekova Ozodakhon
1
Student of the faculty of economics,
e-mail: ozoda.ozatbekova@mail.ru
Ozatbekov Yusupkhon
2
Assistant of the department of transport economics
e-mail: yusuf.ozodbekov@mail.ru
Gulamov Abdulaziz Abdullayevich
3
Vice-rector for academic affairs of
1-2-3
Tashkent State University of transport
https://doi.org/10.5281/zenodo.7013007
ANNOTATSIYA
Until now, when the question of the role of the financial sector in the
development of the country's economy was put forward by Josef Schumpeter in
1911, it has been recognized by all scientists that the development of this
industry is necessary for the development of the economy. Financial sector, on
the other hand, is a set of financial institutions, instruments and markets. Taking
into account the fact that today the highest share in the gross domestic product
of the developed countries of the world belongs precisely to the sphere of
financial services, relying on their experience, the development of the sphere of
financial services in the economy of Uzbekistan, especially financial markets, is
one of the most important issues facing our country.
Key words:
financial sector, financial market, investment, financial services.
The financial system stimulates economic growth by increasing the volume of
savings, attracting and consolidating savings, producing information about
investments, facilitating the inflow of foreign capital, as well as optimizing the
allocation of capital. In countries with a well-developed financial system,
economic development will also be high. In addition, it reduces poverty and
inequality by expanding financing opportunities for poor and disadvantaged
groups, increasing investment and productivity, which leads to increased
income.
Since the development of the financial system occupies an important place in the
development of the country's economy, it is of great importance for each country
to assess the development of its own financial sphere. In world practice, several
tools are used for this. For example, the ratio of assets of financial institutions to
GDP, the ratio of liquid liabilities to GDP and the ratio of deposits to GDP.
However, since the financial system consists of various institutions and markets,
they do not fully reflect financial development. For this reason, the World Bank
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has developed a methodology for assessing financial development, which
defines four indicators representing a well-functioning financial system:
financial scale, accessibility, efficiency and stability. We can illustrate this in
more detail in table 1 below:
table 1
1
Financial institutions:
Financial markets:
By a
p
pli
ca
tion
are
a:
Private sector loan against
GDP
Assets
of
financial
institutions in relation to GDP
M2 in relation to Gross
Domestic Product
Deposits in relation to GDP
Share of financial sector in
GDP
Capitalization of the securities
market in relation to vayaim, special
debt obligations
Private debt to GDP
Public debt to GDP
International debt to GDP
Capitalization of securities
market in relation to GDP
Shares sold in relation to GDP
Th
e
po
ss
ibi
li
ty
of
us
ing
:Th
e
po
ss
ibi
lit
y
of
us
ing
:
Accounts per person of
Harming (commercial banks)
Branches per hundred
people (commercial banks)
Percentage of people with
bank accounts (by survey)
Percentage of enterprises
with credit lines (all enterprises)
Market
capitalization
rate
outside the 10 largest companies
Profitability of government
bonds (3 months, and 10 years)
Ratio of internal debt to total
supply
The ratio of the issuance of new
corporate bonds to GDP
Effici
enc
y:
Account
Flyers
per
thousand people (commercial
banks)
Branches per hundred
thousand people (commercial
banks)
Percentage of people with
bank accounts (questionnaire)
Percentage of enterprises
with credit lines (Hammers)
Suffoizmargisi
Savings-deposits
Stock market turnover ratio
Price synchronicity (add-on)
Private information trading
Influence of prices
Liquidity / transactional costs
Quotation
on
government
bonds
Turnover of bonds (private,
public) on the stock exchange
Accountability
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Interest-free
Additive
properties
(jamiaktivlarganisbatanfoizda)
Profitability (return on
assets, capitalization)
Boon
indicator
(oriherfindahlyoki H-statistics)
Sta
bil
it
y:
Z-points
Investment
adequacy
ratios
Asset quality ratios
Liquidity ratios
Others
(net
currency
status in relation to capital, etc.)
Volatility of the stock price
index( standard yield / average),
index of independent bonds
Index uncertainty (stock price,
independent bond)
Weakness
in
revenue
management
Price / income ratio
Duration
Ratio to the total amount of
short-term bonds (internal)
Relationship with the main
yield of bonds
When we talk about financial markets, they include banks, pension, insurance,
foreign exchange funds and many other economic institutions that help
distribute and redistribute money.
Financial markets differ depending on the type of assets, delivery dates, and
form of organization. Together , financial markets can be divided into the
following types:
1-drawing.
Financial markets vary greatly in size, liquidity, and technology adoption. As a
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rule, financial markets have trading hours and deadlines during which
transactions must be concluded. Auctions are organized by the market itself or
according to its rules.
The financial market performs several functions, and they are as follows:
• Price determination: Supply and demand in the financial market help
determine the price. An investor is someone who provides funds, and industries
and businesses need such funds. Thus, as a result of the interaction of these two
participants and other market forces, the market price is formed.
• Mobilization of savings: for the success of the economy, it is important that
money is in constant motion. The financial market, however, helps to connect
the owners of money with those who need money, and ensures the efficient
movement of money.
• Provides liquidity: buyers and sellers receive high liquidity in the financial
market. This means that investors can easily sell assets and convert them into
cash whenever they want. Liquidity is an important factor of investors'
participation in trading.
• Saving time and money: Financial markets serve as a platform where buyers
and sellers can easily find each other without much effort and without wasting
time. In addition, since a large number of transactions are made in these
markets, scaling them helps to save money. This leads to lower transaction costs
and costs for investors.
The role of investments in the economies of countries around the world is
invaluable. Since investments allow for structural transformations in the
economy, further strengthening of the country's export potential, the creation of
high-tech competitive industries, the introduction of advanced foreign
technologies, know-how and management experience.
The share of investments attracted in 2019 in the gross domestic product
amounted to 37.1%, and further increase of this indicator is one of the main
tasks facing the country's economy. Financial markets are of great importance in
attracting investments. Considering this, the President of our country Shavkat
Mirziyoyev pays great attention to the development of financial markets in our
country. In particular, in accordance with the Decree of the President of the
Republic of Uzbekistan dated January 14, 2019 No. UP-5630 “on measures to
radically improve the system of state assets management, antimonopoly
regulation and capital market”Agency for State assets Management, in
accordance with the Decree of the President of the Republic of Uzbekistan dated
January 24, 2019 No. PP-4127 “On measures to radically improve the system
”On the organization of the activities of the Agency for the Development of the
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Capital Market of the Republic of Uzbekistan " Agency for the development of the
capital market , On August 5, 2019, by the Decree of the President of the
Republic of Uzbekistan “On measures to reform and ensure the accelerated
development of the insurance market of the Republic of Uzbekistan”, the
Insurance Market Development Agency under the Ministry of Finance of the
Republic of Uzbekistan was established on the basis of the State Insurance
Supervision Inspectorate under the Ministry of Finance of the Republic of
Uzbekistan.
In addition, the resolution of the Cabinet of Ministers of the Republic of
Uzbekistan “On approval of the Regulations on the Capital Market Development
Agency of the Republic of Uzbekistan and the Capital Market Development
Assistance Fund under the Capital Market Development Agency of the Republic
of Uzbekistan” dated August 7, 2019 also provides for the development of
financial markets in our country.
However, as the President of our country noted at a meeting dedicated to the
development of the stock market on October 7, 2019, the total value of shares on
the stock market is 25 trillion soums, which is 6 percent of our gross domestic
product. For comparison, in Singapore this figure is 188, in Malaysia-112, in
Russia-34 percent. In addition, the total number of professional stock market
participants is less than 100 people. This indicates that there is still a lot of work
to be done in our country to develop the financial market. In this regard, our
country plans to develop a stock market development strategy for 2020-2025,
which provides for bringing the ratio of the total value of freely traded securities
to GDP to at least 10-15 percent by the end of 2025
.
References:
1.Based on World Bank data:
https://www.worldbank.org/en/publication/gfdr/gfdr-
2016/background/financial-development
2.Data of the official website of the Statistical Committee of the Republic of
Uzbekistan:
https://stat.uz/uz/press-sluzhba/novosti-gks/8290-asosiy-kapitalga-
investitsiyalar-12-19
3.Official website of the president of the Republic of Uzbekistan:
https://president.uz/uz/2703
