ID :
190243
Wed, 06/22/2011 - 02:20
Auther :
Shortlink :
https://oananews.org//node/190243
The shortlink copeid
MSCI keeps S. Korea's emerging market status
(ATTN: RECASTS lead; ADDS paras 4-7; TRIMS para 3; CORRECTS figure in para 9)
By Lee Minji
SEOUL (Yonhap) - Global investment index provider MSCI Inc. retained South Korea's emerging market status on its global equities index, citing problems stemming from its market rigidity and lack of accessibility.
The move represents another setback for South Korea. MSCI left South Korea's status unchanged in 2009 and 2010 due to the "rigidity" of its investor identification system and lack of an active offshore market for the Korean won.
"The lack of full currency convertibility ... and issues linked to the rigidity of the ID systems, remain unchanged from the view of international institutional investors," MSCI said in a statement on its Web site late Tuesday (central European time).
MSCI said some measures have been put in place to ease problems on currency convertibility and the identification system -- such as the revision of the Banking Act and the adjustment of currency market settlement timing. The index compiler, however, said there have been limited improvements in investor feedback.
MSCI also cited the stock market data provision issue as an anti-competitive practice that affected its decision on South Korea.
Meanwhile, the index provider maintained Taiwan's emerging market status, also citing accessibility issues. MSCI said it would delay the review on Qatar and United Arab Emirates, both currently classified as frontier markets, to December.
South Korea and Taiwan will remain under review for potential reclassification next year, said the index provider, adding that no new candidates will be added to the list for potential upgrades in the 2012 assessment.
Following the decision, South Korea's stock market, the 16th-largest in the world by market capitalization, will continue to be tracked on the MSCI Emerging Markets Index along with 20 other countries.
MSCI, based in New York, tracks stock market performances of 77 economies classified into three market categories -- developed, emerging and frontier markets.
The retention comes on the heels of a tug-of-war between the index provider and the Korea Exchange (KRX), which was blamed as the biggest block for South Korea's graduation into developed market status.
MSCI had requested to use the KRX's real-time market data to create and sell derivatives to offshore investors. But the KRX, which operates the world's largest derivatives market by trading volume, has been reluctant to give in on the data rights issue. Other areas previously highlighted by MSCI has also shown little change since last year.
Market watchers have been split on the inclusion. Some remained skeptic on the upgrade, citing the KRX's strong stance on the data rights issue. Others, however, had argued South Korea is likely to graduate from emerging market status since it has been tabbed as a developed market by the Financial Times Stock Exchange (FTSE) Group since 2009.
South Korea is the only country on the FTSE Developed Markets Index that is not included in the MSCI Developed Markets Index.
By Lee Minji
SEOUL (Yonhap) - Global investment index provider MSCI Inc. retained South Korea's emerging market status on its global equities index, citing problems stemming from its market rigidity and lack of accessibility.
The move represents another setback for South Korea. MSCI left South Korea's status unchanged in 2009 and 2010 due to the "rigidity" of its investor identification system and lack of an active offshore market for the Korean won.
"The lack of full currency convertibility ... and issues linked to the rigidity of the ID systems, remain unchanged from the view of international institutional investors," MSCI said in a statement on its Web site late Tuesday (central European time).
MSCI said some measures have been put in place to ease problems on currency convertibility and the identification system -- such as the revision of the Banking Act and the adjustment of currency market settlement timing. The index compiler, however, said there have been limited improvements in investor feedback.
MSCI also cited the stock market data provision issue as an anti-competitive practice that affected its decision on South Korea.
Meanwhile, the index provider maintained Taiwan's emerging market status, also citing accessibility issues. MSCI said it would delay the review on Qatar and United Arab Emirates, both currently classified as frontier markets, to December.
South Korea and Taiwan will remain under review for potential reclassification next year, said the index provider, adding that no new candidates will be added to the list for potential upgrades in the 2012 assessment.
Following the decision, South Korea's stock market, the 16th-largest in the world by market capitalization, will continue to be tracked on the MSCI Emerging Markets Index along with 20 other countries.
MSCI, based in New York, tracks stock market performances of 77 economies classified into three market categories -- developed, emerging and frontier markets.
The retention comes on the heels of a tug-of-war between the index provider and the Korea Exchange (KRX), which was blamed as the biggest block for South Korea's graduation into developed market status.
MSCI had requested to use the KRX's real-time market data to create and sell derivatives to offshore investors. But the KRX, which operates the world's largest derivatives market by trading volume, has been reluctant to give in on the data rights issue. Other areas previously highlighted by MSCI has also shown little change since last year.
Market watchers have been split on the inclusion. Some remained skeptic on the upgrade, citing the KRX's strong stance on the data rights issue. Others, however, had argued South Korea is likely to graduate from emerging market status since it has been tabbed as a developed market by the Financial Times Stock Exchange (FTSE) Group since 2009.
South Korea is the only country on the FTSE Developed Markets Index that is not included in the MSCI Developed Markets Index.
