Page 1 of 8

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 05

May 2019

Available online:https://ejbss.org/ P a g e | 657

Securities Market: Essence, Current State And Prospects Of Development

In Uzbekistan

Nargiza Muzafarovna Babayeva - associate Professor with a PhD of Kokand state

pedagogical institute

Gavhar Umarovna Rajabova - senior teacher of Kokand state pedagogical institute

Muzaffar Ummatovich Kurbanov - senior teacher of Kokand state pedagogical

institute

Abstract: The securities market, which is an integral part of the capital

market, is known as the market for long-term funds. This facilitates the efficient

transfer of resources from savers to investors and becomes a means to attract

investment funds from investors to borrowers. The securities market performs

various functions in the process of economic development. It provides both savers

and users with a full range of investment choices that can increase both savings

and investments.

The article reveals the nature and role of the securities market of Uzbekistan,

examines its current state in the republic, identifies challenges of its development

and measures taken by the government to overcome them.

Keywords: stock market, free capital, investors, placement of securities,

turnover and profitability of securities.

The securities market, being an important part of the modern financial system,

plays an important role in stimulating high rates of development of the world

economy. The whole history of its creation and development convincingly shows its

enormous stimulating role in the development of the productive forces of society and

the formation of civilized market relations. This market serves as a channel that

accumulates the free financial resources of legal entities and savings of the

Page 2 of 8

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 05

May 2019

Available online:https://ejbss.org/ P a g e | 658

population and converts them into financial assets for further investment in the

economy in order to increase the productive potential of enterprises in the real sector

of the economy.

Providing an organic redistribution of debt instruments and equity instruments,

it contributes to the development of competition between sources of financing and

thereby contributes to the efficiency of social production as a whole. The securities

market replaces the cumbersome, costly and inefficient hierarchical, vertical system

of sectoral redistribution of financial resources, because creates opportunities for the

mobilization of financial resources and their use in long-term investment, production,

government programs and debt. [1]

This market is different from all other markets, above all, the specific nature of

its product, which is drawn on it - securities. It should be noted that the securities

market serves as a regulator of the process of capital investment in a market

economy. The investment process assumes that the migration of capital is carried out

in the form of its influx to the places of necessary application and capital outflow

from those branches of production where there is a surplus.

The mechanism of this movement is as follows: the demand for any goods

(services) grows, their prices rise accordingly, profits from their production increase,

and free capital flows to these industries, leaving those industries for which demand

is decreasing and becoming less economically effective. Securities are a means of

ensuring the effective operation of this mechanism. [2] They accumulate temporarily

free capital, wherever it is located, and through buying and selling it helps to

“transfer” it in the necessary direction. In the practice of a market economy, this leads

to the fact that capital is located mainly in those industries that are really needed by

society. As a result, an optimal structure of social production arises, orienting

business entities to take into account real supply and demand.

Page 3 of 8

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 05

May 2019

Available online:https://ejbss.org/ P a g e | 659

Most industries and enterprises, especially in countries with transitional market

economies, are currently experiencing an acute need for an influx of investment

capital that would allow technical re-equipment and modernization of production,

restore solvency, and improve the quality of products. To attract the necessary

investment resources, enterprises and entire industries must learn to use the securities

market and its financial instruments. Important for a proper understanding of the role

of this segment of the financial market in the modern economy is its division into

primary and secondary, because each of them performs specific functions.

The primary market is the market for the first and re-issuance of securities, in

which they are initially placed among investors. The primary securities market is the

economic space that the security passes from its issuer to the first buyer.

The secondary market is the market in which securities previously placed on

the primary market are circulated, i.e. This is the sphere of circulation of securities,

where they go after they are sold by the first owner, who acquired them from the

issuer (directly or through an intermediary). The main purpose of the secondary

market is to reduce sellers and buyers of securities, to ensure free and fast flow of

capital into the most efficient areas of activity. The most important feature of the

secondary market is its liquidity, i.e. it is the ability to absorb significant amounts of

securities in a short time, with small fluctuations in rates and at low implementation

costs.

The secondary market can be organized (exchange) and unorganized

(spontaneous). In most countries, the bulk of the stock (approximately 85%) of

securities circulates on the over-the-counter market, and a relatively small proportion

(15%) of them are on the stock exchange. However, it is the exchange market, where

the most high-quality, and therefore the most important securities are concentrated,

determines the situation and the process of development of the stock market. As a