MSCI Rejects South Korea, Indonesia Upgrade Hopes

MSCI has maintained South Korea's classification as an emerging market, disappointing expectations for an upgrade to developed-market status. A key obstacle identified by MSCI is the limited convertibility of the Korean won in offshore currency markets. Despite acknowledged efforts by South Korean authorities, investors indicate that fundamental issues remain unresolved.

Separately, MSCI has extended its review of Indonesia's market status until November. This follows earlier concerns raised by MSCI regarding market accessibility, which led to a freeze on Indonesian stocks in January. The index provider will continue to assess reforms by Indonesian authorities, warning that insufficient progress could lead to a potential downgrade to frontier-market status.