Biz lobby calls for S. Korea's inclusion on MSCI watchlist for developed markets

By Kim Seung-yeon

SEOUL, May 22 (Yonhap) -- A major South Korean business lobby said Monday it will send a letter to Morgan Stanley Capital International (MSCI) Inc. calling for South Korea's addition to its candidate list for developed market status, a month ahead of the MSCI's announcement on its annual market review.

The letter, signed by Kim Byong-joon, acting chief of the Federation of Korean Industries (FKI), is scheduled to be sent later in the day to Henry Fernandez, chairman and chief executive of the MSCI, the FKI said.

The move came about a month before the MSCI is set to announce its reclassification on stock markets around the world. It classifies the markets based on the countries' economic development, size and liquidity of equity markets, and market accessibility for foreign investors.

South Korea has remained as an emerging market since 1992, when it was first listed on the MSCI, and has been seeking to upgrade its status to a developed market.

The inclusion among the MSCI developed markets means more potential to attract foreign capital inflow.

In the letter, the FKI cited South Korea's status as the world's 13th-largest economy with a 2022 gross domestic product of US$1.66 trillion. The per-capita gross national income stood at $33,000 in 2022, more than fulfilling the MSCI's requirements.

Trading volume in stock markets reached $3.02 trillion in the same year, ranking seventh in the world, with the market capitalization ranking 16th globally with $1.64 trillion won, trumping countries like Spain, Singapore and Austria that are on the MSCI developed markets list, the FKI said.

Financial authorities have taken measures recently to ease what foreign investors regard as barriers to investing in South Korea, and such efforts should be taken into account positively, the FKI said.

In January, the government said it will remove the preregistration requirements for foreign investors within this year to increase market accessibility.

The authorities also announced it will require all companies to post regulatory filings in English starting next year and are pushing for a revised bill to revamp the foreign exchange market, including an extension of trading hours, among other measures.

A country needs to be included on the watchlist to become eligible for reclassification in the following year. South Korea had made it to the watchlist once in 2008 but was delisted after the MSCI determined the market lacked accessibility.

elly@yna.co.kr
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