MSCI Retains South Korea on Emerging Markets

MSCI has decided to keep South Korea in the emerging market benchmark, despite its developed market status by other index providers. The decision was closely watched due to MSCI's market influence. South Korea has been implementing reforms like expanding English disclosures and currency trading hours, but MSCI wants to see how these are received by market participants. Key sticking points include currency trading hours and exchange data restrictions. South Korea's upgrade to a developed market may take time, and even if achieved, it could lead to foreign investor outflows due to its significant role in the EM benchmark.

What is the current classification of South Korea according to MSCI?

• Advanced Emerging Market

• Frontier Market

• Emerging Market

• Developed Market

Which reform measure has South Korea announced to align with developed markets?

• Increasing corporate tax rates

• Expanding English language disclosures

• Implementing stricter environmental regulations

• Reducing interest rates

What is one of the major sticking points for South Korea's market reclassification?

• Corporate governance

• Taxation policies

• Currency trading hours

• Labor laws

What restriction has not been addressed by the South Korean government according to MSCI?

• Corporate tax rates

• Foreign investment limits

• Exchange data for financial products

• Currency exchange rates

What could be a potential consequence for South Korea if it joins the MSCI developed market list?

• Increased foreign investment inflows

• Higher economic growth rates

• Becoming a smaller part of the DM benchmark

• Decreased foreign investment outflows