AFC Investor Sees Ideal Time for Investment in Uzbekistan
Tashkent, Uzbekistan (UzDaily.uz) — Scott Osheroff, chief investment officer of the AFC Uzbekistan Fund, shared his perspective on why current conditions are favorable for investing in Uzbekistan during an interview with Idea Brunch published on 16 August 2026.
Osheroff noted that he first visited Uzbekistan in May 2018, roughly 18 months after the death of former President Islam Karimov. He expressed surprise at the initial lack of foreign investor interest in a country with a population of 34 million (now 39 million) and a formal economy of US$80 billion (now US$145 billion) backed by reserves of gold, copper, and uranium. During that period, the local real estate market yielded returns of 25 percent, while equity market companies grew at triple-digit annual rates alongside price-to-earnings ratios below one and dividend yields approaching 50 percent.
The turning point occurred in early March 2019 following the lifting of foreign exchange restrictions, when the fund became the first foreign institutional investor to repatriate proceeds from share sales on the Tashkent Stock Exchange to Hong Kong. The AFC Uzbekistan Fund was subsequently launched later that month.
Addressing his current positive outlook on the Uzbek market, Osheroff cited cooling inflation—which dropped from 15.2 percent in 2018 to 6.4 percent in July 2026—and the stabilization of the national currency, which shifted from double-digit annual devaluation in 2018 to an appreciation of approximately 7 percent in 2025. This environment encouraged public savings to flow into the banking sector and subsequently into the corporate bond market, where companies now raise US$20 million or more at high double-digit coupon yields compared to previous rates of 30 percent.
Osheroff stated that the Central Bank of Uzbekistan could lower its key policy rate from the current 14 percent toward 13 percent before the end of the year in the absence of geopolitical shocks, reducing the cost of capital. He also identified the initial public offering of the Uzbekistan National Investment Fund (UZNF), managed by Franklin Templeton, as a major market catalyst following its dual listing on the London and Tashkent exchanges in May 2026. This development attracted interest from major global institutions, including JPMorgan, which plans to include Uzbekistan's soum-denominated sovereign bonds in its GBI-EM emerging market index starting 30 September 2026.
Access to local brokerage services has improved significantly. While account opening was previously hindered by infrastructure barriers, foreign retail investors can now open accounts online in approximately five minutes, with custodial services offered by Bank of Georgia, OTP, and Raiffeisen.
Discussing his investment strategy, Osheroff noted that residing in Uzbekistan for over five years, conducting site visits to portfolio companies, and meeting management in person facilitated major off-market transactions with state entities and private firms. He emphasized the importance of understanding specific economic reforms, citing the elimination of oilseed subsidies—which caused around 20 listed vegetable oil processors to become unprofitable—and the restructuring of state company Uzbekneftegaz with Asian Development Bank assistance, which impacted service providers and structural steel manufacturers.
Osheroff highlighted the Uzbek Commodity Exchange as an example of strong corporate governance, operational transparency, and consistently high dividend yields. He added that the local financial market regulator has increasingly enforced protections for minority shareholders, benefiting the fund's operations.
