Too Early
The Korea Exchange officially announced that the Korean stock market will not be included in the MSCI any time soon. Recently, Yim Jong-yong, chairman of the Financial Services Commission, met with Henry Fernandez, chairman of the MSCI, raising expectations. But the announcement means that in reality, the idea is still immature.
Choi Kyung-soo, chairman of the Korea Exchange, announced the fact in a meeting with reporters under the title of “The Korea Exchange’s Plan for 2016” in the Korea Exchange Building in Seoul’s Yeouido on Jan. 21. The Korea stock market already entered the MCSI Review List in 2008 but was scratched off the list due to a lack of effort to enhance the accessibility to the market.
“No stock market entered the MSCI without hitting the review list first,” said a Korea Exchange spokesperson. “It will not be easy for the Korean stock market to join the MSCI in 2016.” Instead, the Korea Exchange is aiming to re-enter the MSCI Review List within this year. So they are planning to overhaul systems to reflect foreign investors’ needs via a working group assembled with those from the Financial Services Commission, the Ministry of Strategy and Finance and the Korea Exchange.
The Korea Exchange will separately step up its efforts to meet requirements for entering the MCSI such as the early implementation of English disclosures. On the other hand, the Korean financial investment industry expects that the Korean stock market’s entry will be able to trigger an influx of US$1.2 billion to US$1.8 billion to the Korean stock market.