South Korea Aims for 'Developed Recognition'

The video discusses the potential reclassification of South Korea from an Emerging Market (EM) to a Developed Market (DM) by MSCI. South Korea is a significant part of the EM benchmark, but if reclassified, it would represent a smaller portion of the DM benchmark. MSCI considers economic development, equity trading size, and market accessibility for classification. South Korea meets the first two criteria but faces challenges with market accessibility due to barriers for foreign investors. The South Korean government is working on reforms, and MSCI may soon place South Korea on the DM watch list, a step towards reclassification.

What is the potential impact on foreign investment if South Korea joins the MSCI DM list?

• Risk of foreign outflows

• Increase in foreign inflows

• Decrease in foreign outflows

• No change in foreign investment

Which of the following is NOT a criterion used by MSCI to classify countries?

• Size and liquidity of equity trading

• Cultural influence

• Market accessibility

• Economic development

What is one of the barriers to market accessibility in South Korea?

• Lack of financial institutions

• Limited internet access

• Bureaucratic pre-registrations for foreign investors

• High transaction fees

What is the expected timeline for South Korea to be placed on the DM watch list?

• Next month

• Next year or the year after

• No specific timeline

• In five years

What is the minimum duration South Korea must be on the DM watch list before a final decision?

• Six months

• Three years

• One year

• Two years