South Korea No Longer Wants to Be Labeled an ‘Emerging Market’

**Title: Korea’s Bid for Developed Market Status: Exploring MSCI’s Influence**

**Description (SEO Optimized):** Join Bloomberg’s Youkyung Lee and Henry Ren in this episode as they discuss South Korea’s push to be elevated to MSCI’s prestigious World Index, the impact it would have on the country’s economy, and the hesitations surrounding the move. Find out why this decision matters and learn about the criteria MSCI uses to determine market classification.

**Paragraph 1:** South Korea is home to one of Asia’s largest stock markets and boasts major conglomerates like Samsung and Hyundai. However, despite its economic power, the country is still classified as an emerging market by MSCI, the influential investment research firm that provides market indexes. In this episode, Bloomberg’s Youkyung Lee and Henry Ren examine South Korea’s argument for being included in MSCI’s World Index alongside developed economic powers like the US, UK, and Germany. The decision is set to be made this month.

**Paragraph 2:** In order to understand the significance of South Korea’s bid for developed market status, it is important to grasp the role of market indexes. These indexes track the performance of a market by selecting a representative group of companies and monitoring their collective performance. Renowned indexes such as the S&P 500 and Dow Jones Industrial Average are closely observed by investment firms and fund managers, influencing investment decisions. MSCI provides one of the most influential indexes worldwide and currently designates South Korea as part of its Emerging Markets index, along with developing economies like Brazil, China, and Mexico.

**Paragraph 3:** South Korea’s desire to be upgraded to MSCI’s World Index reflects its ambition to be recognized on par with established economic powers. The country’s economy, the fourth largest in Asia, has experienced remarkable growth over the past century. Notably, South Korea’s purchasing power exceeds that of neighboring countries, including Japan. Being included in MSCI’s World Index would grant South Korea access to the portfolios of global investors and establish it as a developed market.

**Paragraph 4:** The classification of markets by MSCI involves various factors, including the economy’s size, development, liquidity of equity trading, and market accessibility for foreign investors. While South Korea’s size and development are not in question, market accessibility poses a challenge. MSCI evaluates the ease with which foreign investors can trade, obtain information, and access stocks in a particular market. In this episode, Lee and Ren explore the specific issues Korea needs to address, such as currency trading hours, to meet MSCI’s criteria for developed market status.

*Source: [Bloomberg](https://www.bloomberg.com/authors/ATzepS8Eyck/youkyung-lee), [MSI: Korea’s Upgrade Bid](https://www.bloomberg.com/news/articles/2023-06-09/msci-says-korea-still-faces-market-access-issues-in-upgrade-bid)*

South Korea’s stock market is one of the largest in Asia. The nation is home to huge conglomerates including Samsung and Hyundai. And yet Korea is still listed as an emerging market–not a developed one–by MSCI, the investment research firm that provides influential market indexes. Korea argues it should be elevated to MSCI’s World Index, where it would sit alongside the US, UK, Germany and other developed economic powers. The company is expected to decide this month.

Bloomberg’s Youkyung Lee (https://www.bloomberg.com/authors/ATzepS8Eyck/youkyung-lee) and Henry Ren (https://www.bloomberg.com/authors/AU9jKkMZcro/henry-ren) join this episode to talk about why this move matters so much to South Korea–and why some companies and market watchers are having second thoughts about whether such a move is a good idea — or even worth it.

Read more: MSCI Says Korea Still Has Loads to Do to Get ‘Developed’ Status (https://www.bloomberg.com/news/articles/2023-06-09/msci-says-korea-still-faces-market-access-issues-in-upgrade-bid)

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