South Korea asks MSCI to put its stock market on watchlist for developed market status
SEOUL, April 23 (Yonhap) — South Korea’s top economic policymaker has asked global index provider Morgan Stanley Capital International (MSCI) to place the country’s stock market on the watch list for developed market status. during his review in June, his office said on Saturday.
Finance Minister Hong Nam-ki made the remarks while meeting with senior MSCI officials in New York on Friday (local time) as South Korea pushes again to win MSCI’s developed market status.
MSCI has classified the South Korean stock market for years as an emerging market, saying the lack of an offshore currency market for the Korean won is a key reason for its decision.
“MSCI has assessed that the South Korean stock market has met its Developed Market Standards in terms of economic development and market liquidity,” Hong said.
“If market access is greatly improved, the Korean market’s attempt to gain developed market status will be duly justified,” he said.
To upgrade to developed market status, a country must first be placed on the watch list for at least one year. In 2008, Korea was placed on such a list but did not gain the status later. He has been off the watch list since 2014.
Hong also said the government will consider ways to improve the registration system for foreign investors in a bid to better ensure foreigners’ access to domestic stock markets.
Currently, foreigners seeking to invest in stocks listed in South Korea must first register their personal information with the Financial Supervisory Service.
The government will also consider whether to accept MSCI’s request to use KOSPI indices for its decision to list KOSPI tracking derivatives on foreign exchanges.
On the foreign exchange market, South Korea plans to extend the opening hours of the foreign exchange market and allow foreign financial institutions to participate directly in the interbank foreign exchange market. It is also considering easing regulations on offshore transactions in Korean won.
Currently, only state-licensed Korean financial institutions are allowed to participate in the interbank foreign exchange market. The Korean foreign exchange market is open from 9:00 a.m. to 3:30 p.m.