MSCI keeps S. Korea's emerging market status

By Kang Yoon-seung

SEOUL, June 12 (Yonhap) -- Global investment index provider MSCI Inc. retained South Korea's emerging market status on its global equities index, citing the country's high barrier in the financial sector.

"Many international institutional investors consider that the accessibility of the Korean equity market is not at Developed Market standards," MSCI said in a statement.

"The limited convertibility of the Korean Won in the offshore currency market would be a significant issue for international institutional investors managing Developed Market portfolios as it would prevent them from using their usual currency trading practices," it added.

MSCI, the research arm of U.S. banking group Morgan Stanley, announced the decision on its Web site early Wednesday morning (Seoul time).

The retention came after MSCI deferred upgrading the South Korean market in June last year. Since 1989, MSCI has retained South Korea's emerging market status on its global equities index.

MSCI, based in New York, tracks stock market performances of major economies classified into three market categories -- developed, emerging and frontier markets.

Stock market participants and financial institutions have been closely following the MSCI decision on expectations the upgrade will expose the local bourse to a wider pool of global equity funds.

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