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The Korean stock market has once again failed to gain recognition as a developed market
by Morgan Stanley Capital International,... an investment index company based in New York...
providing global stock market indices for non-U.S. markets.
Ji Myung-kil tells us why. The Korean Stock Market has been classified as a developed
market by Dow Jones, Standard & Poor's, the Financial Times, and the London Stock Exchange.
But on Wednesday, the global investment index provider Morgan Stanley Capital Investment
retained Korea's status as an emerging market for the fifth time along with Taiwan.
"Morgan Stanley Capital International or MSCI is a stock market index, which follows stock
market performances in countries around the world and classifies them into three groups...developed,
emerging and frontier markets."
The MSCI said, Korea's high barriers in the financial sectors make trading difficult.
Some of the obstacles cited include the limited convertability of the Korean Won and the requirement
for foreign investors to identify themselves for every over-the-counter transaction.
It's important for Korea to obtain the MSCI's developed market status because many fund
managers use the MSCI classification as an important criteria when they draw up their
investment portfolios. Experts say, if Korea obtains the developed
market status then international investors will have better access to the Korean equity
market.
"If Korea is classified as a developed nation by the MSCI, then foreigners' are expected
to buy an additional six billion U.S. dollars worth of Korean stocks."
The Korea Exchange says, the latest decision from the MSCI will not have much effect on
the local financial markets ... and that the global index provider will again review Korea's
market status next year. Meanwhile, Greece became the first developed
nation to be downgraded to an emerging market. Qatar and the United Arab Emirates were raised
to emerging markets from frontier market status. Ji Myung-kil, Arirang News.