As South Korea is on track to have the world’s best-performing major stock index for a second year, its ambition to be recognised as a developed market is being held back by the scars of a crisis from three decades ago.
A blistering rally driven by AI chip suppliers Samsung Electronics and SK Hynix has helped the Kospi triple in value since the start of 2025. Along with a series of capital market reforms, Seoul had hoped it would help convince MSCI to reconsider South Korea for developed-market status — a goal it has pursued for more than a decade.
But last month, the index provider maintained the country’s classification as an emerging market, citing barriers for foreign investors, particularly the absence of a fully convertible offshore won market.