MSCI Notes South Korea's Improved Short-Selling Ahead Market Upgrade Review

MSCI has upgraded South Korea's short-selling accessibility rating from 'improvements needed' to 'no major issues, improvements possible,' following the full lifting of a five-year ban on short selling in March. This improvement enhances South Korea's prospects of being added to MSCI's watch list for a potential upgrade from emerging to developed market status, although analysts caution the probability remains below 50% due to other areas needing improvement. The country's KOSPI index has surged 24% year-to-date, making it Asia's top-performing stock market in 2025, supported by political stability and expectations of corporate reforms. An MSCI upgrade could attract substantial foreign capital inflows, further boosting South Korea's global investment appeal. While progress in market accessibility is clear, full compliance with developed market standards is still a work in progress. This development reflects broader shifts as emerging economies like South Korea move toward higher global financial market classifications.