South Korea’s world-beating rally just tipped it into a bear market
MSCI kept South Korea classified as an emerging market last month, FT reported, citing the absence of a fully convertible offshore won market.
An upgrade to developed status could attract about US$30bn from passive funds, BNP Paribas Securities estimates.
But the country’s index weighting would drop sharply, from about 24 percent of MSCI’s emerging market benchmark to roughly 3 percent of the developed one, a shift NH Investment & Securities warned could drain capital from smaller stocks.
Underlying demand still looks firm, with memory prices up between 50 and 80 percent sequentially in the second quarter, said Rolf Bulk, head of semiconductors and infrastructure at Futurum Group, in comments to CNBC.
Even so, the sector‘s history tempers the optimism.
