Kyrgyz Government Takes Lead in Finance Sector

One of the most significant events in the country’s financial market in the past year of 2023 was the increase in the state’s shareholding in the capital of the Kyrgyz Stock Exchange (KSE) to 28.55% of shares, and in the Central Depository (CD) to 50% of shares. Thus, the state has become the largest shareholder of these crucial financial market institutions.

This move towards such a broad activation of the state’s participation in the development of the country’s financial market was initiated by the Decree of the President of the Kyrgyz Republic “On measures for the further development of the stock market and exchange activities”, adopted in November 2022. It was in this Presidential Decree that priority tasks were clearly formulated and set, which would transform the KSE and CD into system-forming national institutions capable of implementing socially significant economic projects in the country, including with the participation of the state, to enhance the competitiveness of the national stock market in the international financial market.

As part of the implementation of this Decree, the Cabinet of Ministers of the Kyrgyz Republic issued a Resolution “On the acquisition of additionally issued shares of the Closed Joint-Stock Company ‘Kyrgyz Stock Exchange’ and Closed Joint-Stock Company ‘Central Depository’” dated November 24, 2023, No. 625, which completed the process of the state, represented by the Ministry of Finance of the Kyrgyz Republic, entering as key shareholders of the KSE and CD.

In this connection, extraordinary shareholder meetings of the CD and KSE were held on December 19 and December 25, 2023, respectively, where decisions were made to increase the number of circulating shares by issuing additional shares in favor of the state, represented by the Ministry of Finance of the Kyrgyz Republic.

By December 29, 2023, the Financial Market Regulation and Supervision Service recognized the results of the issue of ordinary registered shares of the KSE and CD, which were registered in the Unified State Register of Securities of the Kyrgyz Republic.

The entry of the state into the capital of the KSE and CD is expected to significantly contribute to the modernization of the technical potential of these institutions and open opportunities for the development of new areas of activity, including the organization and creation of improved conditions for the placement and circulation of government securities. Also, the new public-private partnership will allow for the activation of other important sectors on the exchange, such as the precious metals sector, currency, commodity and raw materials sector, among others.

The Ministry of Finance of the Kyrgyz Republic and the KSE intend to conduct large-scale joint events and implement the country’s most important development projects. Experts are confident that the presence of the state, represented by the Ministry of Finance of the Kyrgyz Republic, among the shareholders will give a new impetus to the further successful development of the domestic financial market of the Kyrgyz Republic.