South Korea Misses MSCI Upgrade Watch List Again

Post by : Bianca Suleiman

Photo: WAM

The Republic of Korea has once again not been added to a special watch list by MSCI, a well-known global company that tracks and ranks countries' stock markets. This list is important because it helps decide if a country’s market can move from “emerging” status to “developed” status. Getting upgraded often brings more foreign investment, which helps the country's economy grow.

MSCI explained that South Korea still needs to fix a few important issues in its financial system. One major concern is the foreign exchange market, where different currencies are traded. Foreign investors still find it hard to access Korea’s currency market easily. Even though the government has made some changes—like letting foreign investors join the onshore currency market and allowing longer trading hours—MSCI believes it’s not enough.

According to a report released last week by MSCI, South Korea's equity and currency markets are still difficult for foreigners to use. One of the main reasons is that there is no offshore currency market, which means investors from outside the country don’t have a convenient way to trade Korean won. Also, the onshore market still has many limits and rules that make it hard to access.

MSCI added that it will keep watching how South Korea improves its market system. The company wants to see if the changes are stable, consistent, and long-lasting before making any upgrades.

MSCI updates its market rankings every year in June. It checks things like a country's economic strength, the size and activity of its stock market, and how easy it is for foreign investors to take part. For now, South Korea remains classified as an emerging market.