On May 4, the Federation of Korean Industries (FKI) delivered a statement to MSCI (Morgan Stanley Capital International) calling for the promotion of the Korean stock market from "emerging market" to "advanced market."
MSCI categorizes global stock markets into advanced, emerging, and frontier markets. Global institutional investors and fund managers apply this standard to determine the size of their investment by country.
As of April, 23 countries, including the U.S., Japan and the U.K., are advanced markets; 27 countries, including South Korea, China, are emerging markets, and 26 countries, including Vietnam are frontier markets.
"The Dow Jones, Standard & Poor's (S&P) and FTSE, which are global stock market calculators, have already promoted the Korean stock market to an advanced market," the FKI said. "Only MSCI classifies Korea as an emerging market."
"Considering the fundamentals of the Korean economy and the size of the stock market, the Korean market are well qualified for advanced one," said the head of the FKI's economic policy office. "We delivered a statement to persuade Korea's need for promotion as the MSCI is set to do annual market classification in June."
The Federation of Korean Industries suggested five reasons for Korea's inclusion in the MSCI advanced market: △The status of the Korean economy △The convenience of foreign exchange transactions △Fairness of evaluation △Improvement of investment environment △Efforts to enhance information accessibility.
Regarding the status of the Korean economy, he said, "Korea's GDP ranked 10th in the world with $1.6 trillion last year," adding, "It is not only the real economy but also the stock market."
The Korea Exchange's market capitalization stood at $2.2 trillion as of last year, ranking 13th in the world, and the stock market's transaction price stood at $1.9 trillion as of 2019.
