It has been a long-time aspiration in Seoul that South Korea, a wealthy nation with $35,000 gross domestic product per capita, joins index provider MSCI’s elite club of developed markets. That dream may finally become a reality this summer.
Last year, Seoul’s wishes were once again brushed aside. MSCI lectured the government on its unfriendly market practices, including a short-selling ban put in place at the onset of the pandemic, a lack of currency trading offshore and insufficient information flow — especially for foreign investors.
But now there is hope that at its next meeting in June, MSCI might just put Korea on a fast track for developed status. In recent months, President Yoon Suk-yeol’s government has been trying to improve its image and acknowledged Korea’s "outdated regulations.” It promised to scrap foreign investor registration, a cumbersome process MSCI has frowned upon. It will open up currency trading to foreign firms by extending market hours until 2 a.m. from the current 3:30 p.m. It may even consider lifting the short-selling ban this year, the nation’s financial watchdog said in March.