Korean government makes last-minute push for MSCI inclusion

[THE INVESTOR] The Korean government is making a last-ditch effort to get its stock market included in the top grade of global market indices, government officials said on June 14.

The key decision by New York-based index provider MSCI on the potential inclusion of Korea on its developed market index is to be announced on June 15 (Korea time). 

To request the upgrade, a delegation of officials from a financial regulator and economic ministries, recently visited MSCI’s office in Hong Kong, according to the country’s financial authorities.

During the meeting, Korean officials introduced the measures the country had taken to enhance foreign investors’ convenience and to meet guidelines set by the MSCI.

Such schemes include the extensions of stock market trading hours and the foreign exchange trading session as well as the improvement of the account system for foreigners trading local stock.

“For the time being, we have a fifty-fifty chance of getting back on the list … we are waiting for the results,” said a government official.

Asia’s fourth-largest economy was taken off the review list for a potential upgrade to be considered a developed market by MSCI in 2014. It has held its emerging market status since 2009.

In May, Korea Exchange, the country’s stock market operator, said it will extend trading hours of the stock and derivatives markets by 30 minutes from August, in a bid to synchronize them with other Asian markets.

Even if the MSCI’s decision is positive, the actual addition to the developed market index could be decided next year and the change would take effect in 2018 at the earliest.

By Park Han-na (hnpark@heraldcorp.com)