South Korea Poised for MSCI Index Watch List Inclusion
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Synopsis
South Korea is on track to be added to the MSCI index watch list for development market status, with key issues resolved. The government is also focused on becoming a leader in AI technology.
Key Takeaways
- South Korea may soon be on MSCI watch list.
- Majority of issues preventing MSCI inclusion are resolved.
- FSC vice chairman expresses confidence in future inclusion.
- Market reforms are underway to boost FX market.
- Government aims to lead in AI technology.
Seoul, April 21 (NationPress) South Korea is expected to be placed on a watch list for development market status in the Morgan Stanley Capital International (MSCI) index soon, as indicated by the nation's financial regulator on Monday. They noted that the majority of issues hindering the country's inclusion have been resolved.
Since June 2024, South Korea has remained classified as an emerging market by the global index, following the reinstatement of a ban on stock short-selling in November 2023, as reported by Yonhap news agency.
Kim So-young, vice chairman of the Financial Services Commission (FSC), expressed strong confidence that the country is likely to be included on the watch list for development status in the MSCI index, which undergoes reclassification every June.
"We believe the chance of (the country's) inclusion in the near future is very high, even if it does not occur this time," Kim stated during a press briefing with foreign journalists in Seoul.
He mentioned that over 90 percent of the concerns raised by MSCI, including the short-selling ban and others, have been addressed.
South Korea has implemented a series of market reform measures to attain development market status in the MSCI index. These reforms include plans to enhance the country's foreign exchange (FX) market, allowing foreign institutions to engage in the onshore interbank FX market upon registration.
On March 31, the nation lifted its stock short-selling ban on all listed companies, which had been enforced since November 2023 due to multiple violations of naked short-selling involving several global investment banks.
Meanwhile, acting President Han Duck-soo emphasized the government's ambition to position South Korea among the top three nations in artificial intelligence (AI) technology.
During a ceremony commemorating Science, Information and Communication Day, Han described the global landscape as being in an "infinite competition" to secure advanced scientific and digital technologies.
"The key is to secure the three game-changer technologies: artificial intelligence, bio, and quantum technology," he stated at the event in southern Seoul. "Above all, achieving a top three position in AI is a goal we must realize at all costs."
Han affirmed that the government is committed to investing actively in these sectors while developing the necessary legal and institutional frameworks to support them.
