South Korean Stock Market Fails Again to Be Listed on MSCI Developed Markets Watchlist

Newsis The inclusion of the South Korean stock market in the Developed Markets Index has been thwarted once again.
It failed to be named on the 'Watch List,' the first step toward entering the MSCI (Morgan Stanley Capital International) Developed Markets Index, this time as well.
In the results of its 2026 market classification released on the 23rd (local time), MSCI did not place the South Korean stock market on the Developed Markets Watch List. They cited reasons such as the fact that the exchange of the Korean won in the offshore foreign exchange market remains restricted.
MSCI explained, "We acknowledge the measures announced by Korean market authorities to address long-standing concerns (raised regarding the Korean market)," but added, "However, investors have reacted that fundamental issues have not been fully resolved.
" The MSCI index serves as a guideline for global institutional investors when making overseas investments. Markets are classified into Developed Markets (DM), Emerging Markets (EM), and Frontier Markets (FM) based on market size and regulations.
To be promoted from an Emerging Market to a Developed Market, a country must first be included on the watchlist. It is generally the case that a country must remain on the watchlist for at least one year and undergo a review before final promotion can be achieved.
The Korean stock market was included in the Emerging Markets Index in 1929, then placed on the watchlist from 2008 to 2014, and after being removed from the list, has not been able to re-enter the candidate pool to this day.
It is reported that MSCI has determined that while institutional improvements such as the opening of Korea's foreign exchange market and the abolition of the foreign investor registration system are being pursued, more time is needed for these changes to fully take root in the market and for foreign investors to feel their effects.
dympna@fnnews.com Song Gyeong-jae Reporter