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 significance of the MSCI's decision on South Korea's market classification?

What potential impact could South Korea's upgrade to developed market status have on foreign investment?