E-paper

MSCI asked to include Korea in developed market index

By Park Jae-hyuk pjh@koreatimes.co.kr

Morgan Stanley Capital International (MSCI) received an official request from Korean businesses to upgrade the domestic equity market to “developed” from “emerging” in its forthcoming market classification next month.

The Federation of Korean Industries (FKI) said Wednesday it sent a statement to the global index provider a day earlier providing reasons why Korea should be included in the MSCI’s developed market index. It emphasized it is inappropriate to maintain Korea as an emerging market, considering the size of the country’s economy and its globalized stock market.

“Considering the Korean economy’s fundamentals and the size of its stock market, it satisfies the qualifications for being classified as a developed market,” FKI senior official Choo Kwang-ho said. “Our demand is intended to convince MSCI, prior to its annual market classification in June.”

The FKI cited reasons such as Korea’s economic enhancements, capacity to utilize alternatives to offshore currency markets, fairness compared to other countries, improved market accessibility for foreign investors and increased availability of stock price information, refuting the index provider’s previous claims made when it refused to include Korea in its developed market index. “Korea needs to be assessed on an equal footing with other developed markets such as Japan, which is categorized under the MSCI developed market index,” the FKI said in the statement. “MSCI pointed out that both Korea and Japan are not doing well enough in providing information to foreign investors, but this seems to be applied only to Korea.”

Dow Jones, S&P and FTSE, providers of global stock market indices, reclassified Korea into their developed market indexes respectively in 1999, 2008 and 2009.

The Korea Economic Research Institute, an umbrella unit of the FKI, said in its recent report that if MSCI includes Korea in the developed market index, the benchmark KOSPI will rise up to 4,035 points for the inflow of foreign capital worth up to 61 trillion won ($54 billion).

“Korea needs to be assessed on an equal footing with other developed markets such as Japan.

Finance

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2021-05-06T07:00:00.0000000Z

2021-05-06T07:00:00.0000000Z

https://thekoreatimes.pressreader.com/article/281612423269765

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