Liquidity risk and thinly traded stocks on UZSE

A share is only worth its price if someone will pay that price when you want to sell. Liquidity is the ease with which you can buy or sell a security quickly, in the size you want, without moving the price much. On the Republican Stock Exchange «Toshkent» (UZSE), liquidity varies enormously from one share to the next, so liquidity risk deserves as much attention as the company itself. This guide explains what the risk is, how the exchange itself measures liquidity and how to check a share before you buy.

How different UZSE shares can be

Here are three shares on the same day, 25 September 2026, as reported by the exchange (UZNF, URTS and UZMT on uzse.uz, as of 25 September 2026):

• National Investment Fund (UZNF): 89,015,258 shares traded, a turnover of about 579.3 million UZS.
• Uzbek Commodity Exchange (URTS): 8,738 shares traded, a turnover of about 94.9 million UZS.
• UzAuto Motors (UZMT): 79 shares traded, a turnover of about 4.4 million UZS.

Share counts are not comparable across companies because prices differ, which is why turnover in soʻm is the better yardstick. Even so, the gap is more than a hundredfold between the first and the last share. Someone holding 50 million UZS of UZMT could not expect to sell it in one day at the recent price, while the same amount of UZNF would be a small part of a normal session.

What liquidity risk looks like in practice

Liquidity risk is not a single event. It shows up in several ways:

1. Wide spreads. With few orders, the gap between the best bid and the best ask is large. Every round trip costs you that gap. See order book, bid, ask and spread.
2. Price impact. A larger order uses up the best price level and trades at worse ones. The more you trade relative to normal volume, the more you pay when buying or give up when selling.
3. Time to exit. Selling may take days or weeks of patient limit orders. If you need the money on a certain date, that is a real risk.
4. Stale prices. The last price of a rarely traded share may be days old. Your portfolio's value, calculated on that price, may not be what you could sell for today.
5. Price limits. Prices on UZSE can move at most 20% above or below the reference price in a day (trading system structure, as of 26 September 2026). In a thin share, a wave of sell orders can push the price to the lower limit with few buyers there, and a seller may have to wait for the next day.

How UZSE itself grades liquidity

The exchange's regulation on its quotation list sets out a monthly liquidity assessment for listed shares (regulation on the quotation list, in force from 1 January 2025, as of 26 September 2026). Each month, the exchange scores every listed share on four indicators for that month:

• the volume of exchange trades;
• the number of exchange trades;
• the number of exchange members (brokers) that took part in trades in the share;
• the share of trading days on which the share actually traded.

The points are added up, and the share is classed as highly liquid (10 points or more), moderately liquid (7 to under 10) or low-liquidity (under 7). Common and preferred shares are assessed separately, and a newly listed share is classed as low-liquidity until the end of the month in which it was listed.

The same regulation ties liquidity to the listing categories. For the top "Premium" category, the issuer needs either a market maker or trades on at least 70% of the trading days in the preceding year. Under the Law on the securities market, a market maker is an investment intermediary that has committed to making exchange trades to support the level of prices, demand and supply in a security (lex.uz, article 3, as of 26 September 2026).

These indicators make a good personal checklist too, even without the exchange's scoring table.

A simple check before you buy

The numbers in this example are illustrative. Suppose you plan to invest 20 million UZS in a share, and over the last month it traded on 12 of 21 trading days, with an average turnover of 8 million UZS on the days it traded.

• Trading days: 12 of 21 is about 57%. On almost half the days, nobody traded it at all.
• Size versus turnover: your 20 million UZS is 2.5 times an average trading day's turnover. Buying, and later selling, would likely take several sessions or move the price.
• Spread: look at the current best bid and ask. A spread of several percent adds directly to your cost.

None of this means you should not buy. It means you should plan how you would sell, accept that it may take time and size the position with that in mind. Holding a thinly traded share alongside more liquid ones is one reason diversification matters on a smaller market.

Practical habits for thin markets

• Use limit orders. They stop a market order from walking through a thin book at worse and worse prices. Limit orders vs market orders shows the arithmetic.
• Split larger orders. Trading in smaller pieces over several sessions reduces price impact, at the cost of time.
• Check the class you are buying. A company's common and preferred shares have different tickers and very different trading activity.
• Look at more than one day. A single busy day can be a one-off. Look at several weeks of daily volume.
• Know the calendar. Orders are valid for one session only, and trades settle two business days later. UZSE trading hours and settlement explains the timing.
• Treat the last price with care. For a share that rarely trades, value your holding at a price you could realistically get, not only at the last trade.

Checking liquidity on Finmind

Each UZSE share has a public page on Finmind, such as UZNF or URTS, showing the last session's volume and a year of daily closes stored from uzse.uz, so you can see how often a share has traded. With a free Finmind account, the market-wide order book shows the best bid and ask and the quantity waiting on each side during the session. The paid Stock Screener adds filters on trailing turnover and liquidity across all UZSE shares.

This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.