Investing In Emerging Belt & Road Initiative Stock Markets In Central Asia

Posted by

Acquiring a portfolio In Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan & Uzbekistan

Op/Ed by Chris Devonshire-Ellis

With China’s Belt & Road Initiative gaining much attention due to the vast financial spend across regions, it makes sense to start to examine how that expenditure will impact on listed companies, some of them direct participants, on stock exchanges throughout the Belt & Road Initiative.

Projections of how much China has actually invested differ. Morgan Stanley have estimated that the total spend by 2027 will reach US$1.2 trillion, while Moodys Analytics put the total spend at US$614 billion at the end of 2018. To put this into context, the United States has stated it will spend US$2 trillion on supporting the American economy due to Covid-19.

Whatever the figures, the results should be the same: Infrastructure investment into BRI countries could be reasonably expected to show up later as improvements in the performances of certain local businesses in industries impacted by such projects. Obvious candidates as improved infrastructure enhances trade are banks, rail, road, air and port operators, certain retail outlets and logistics companies, and especially those which have some element of Government ownership.

In this series of articles, we will examine the various regional exchanges, identify some of the key players and look at the possibility for foreign investors to get involved.

In terms of regulatory and professional oversight, several of the exchanges have partnered with or have as significant shareholders other experienced exchanges. This is especially notable in Mongolia and Uzbekistan, where the London and Korean Stock Exchanges have taken respective equity as a result of anticipated future national economic booms due to perceived mining potential and political reforms.

Also of note are the regulatory bodies the Federation of Euro-Asian Stock Exchanges which promotes the the cooperation, development, support and promotion of capital markets in the Eurasian region, and is based in Yerevan, Armenia. Then there is the World Federation of Exchanges, representing over 250 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Its market operators are responsible for operating the key components of the financial world. It is based in London.

Central Asia

Kazakhstan is a major transit route from China through to Central Asia and on towards the Caucasus and Europe. Major rail, road and air corridors as well as inland Ports such as Khorgos have positioned the country as a transshipment route for a large part of the Belt & Road Initiative.

The Kyrgyz Republic is landlocked but an important transit hub in Central Asia – both towards north-east from Kazakhstan to Russia towards Tajikistan and Afghanistan, as well as towards the southeast, connecting Central Asia with China.

Mongolia is sited between Russia and China and also borders Kazakhstan. It is a major transit route between China and Russia and lies on the Mongolian section of the main Trans-Eurasian Land Bridge.

Tajikistan is another landlocked Central Asia country, albeit with minimal experience in handling a domestic stock market.
The Tajik stock exchange is known as the Central Asian Stock Exchange (CASE)

Turkmenistan occupies a strategic position between East and West and an outlet to the Caspian Sea, however remains somewhat closed. The country possesses the worlds fourth largest gas reserves. An attempt to open a stock exchange in the capital, Ashgabat was made in 2016/17, however contacts and websites seem to be inoperable. What is operational is the State Commodity & Raw Materials Exchange of Turkmenistan. The exchange acts mainly as an auction house for exported products.

Uzbekistan has been the subject of reform and opening up and is developing as a Central Asia investment hub. It is a key regional player on the Belt & Road Initiative and is experiencing an influx of new foreign investment due to recent Government relaxing of regulatory and capital protocols. The Uzbek stock exchange is known as the Toshkent, or Republican Stock Exchange (RSE).

For foreign participants it is important to be aware that the key to investing isn’t to look at fundamentals and previous performance, the key to investing is working out as best you can what is likely to happen in the future. Examining shareholder meeting discussions and looking at obvious market progression, both domestic and regional and the probability of this happening, is a research issue. Which is why Silk Road Briefing is a useful tool. A subscription can be obtained here.

Our overview of Stock Markets in the Caucasus – Armenia, Azerbaijan and Georgia – can be found here.

For obvious reasons we recommend caution when investing in stocks and shares in these emerging markets. We make no recommendations, risks are those of the reader alone.

Related Reading


About Us

Silk Road Briefing is written by Dezan Shira & Associates. The firm provides strategic analysis, legal, tax and operational advisory services across Eurasia and has done since 1992. We maintain 28 offices throughout the region and assist foreign governments and MNC’s develop regional strategies in addition to foreign investment advice for investors throughout Asia. Please contact us at or visit us at