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Korea Wins FTSE Developed World Status

Posted by: Moon Ihlwan on September 21, 2009

The FTSE upgraded the Korean stock market to developed market status from emerging market on Sept. 21, but the move is expected to do little in boosting the Seoul bourse’s Korea Composite Stock Price Index, or Kospi, in the near term. The upgrade has helped foreign investors managing money against the FTSE increase their exposure in Korean stocks since it was widely publicized early this month.

Now that the upgrade has been made, foreign buying in the Korean market is expected to slow down. Foreigners, who have accumulated $4.1 billion worth of Korean shares in the past two weeks, bought $154 million more than they sold on Sept. 21, but selling by local investors pared Kospi by 0.25% to 1,695.5.

Market watchers expect Kospi to stay in a boxed range for coming weeks until mid-October when blue chips such as Samsung Electronics, Hyundai Motor and LG Electronics are expected to post strong third quarter results. As foreign fund managers will now pick Korean shares vis-à-vis rivals in developed markets, they are expected to focus on large-cap blue chips. That means Kospi’s movement will likely be dictated even more by a handful of blue chips in the future.

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Reader Comments


September 21, 2009 02:27 PM

This was bound to happen for Korea South Seoul inspite of USA strong backing.Already Samsung,Hyundai,LG are household names in India the emerging market along with China,Russia and Brazil the Goldman Sachs 2005 Investment Report on the World Economy that by 2050 they too will be developed.However,until that is done the BOP opportunities at the bottom of the pyramid research at University of Michigan by Prof CK Prahlad educated MBA from IIM Ahmedabad a world Class Indian B-School even in 1962 remains to be seen as a distinct possibility.Out of over 6 Billion world population there are majority 4 Billion earning less than a dollar per person, per day,sleeping in open,turning to terrorism bcoz of hedonism of the market friendly economy model taking prominence an era of economic globalization,cultural globalization with fashion shows,media,movies,malls-3m's paradigm, etc.growth of jobless growth age and just 2 Billion are earning over $2 per day.More changes needed at global level.


September 21, 2009 03:15 PM

Once everyone reaches "Developed" status, what next? Where will the fight take us.


September 21, 2009 03:15 PM

Once everyone reaches "Developed" status, what next? Where will the fight take us.

Business Nguyen

September 21, 2009 09:31 PM

What does this mean? Relatively backward countries with high GDP per capita like Southern European are called "developed", while high-tech, highly educated, high IQ countries like Korea and Israel are still "emerging". Judging by GDP per capita only, then some Gulf countries or Brunei are much more developed than US. If education achievement, urban development, infrastructure, poverty eradication are considered, then China look more developed than a lot of so-called developed countries.


September 22, 2009 08:14 AM

South Korea has been "developed" for at least 2 decades. I heard FTSE also put Enron and Lehman on its watch list for a possible downgrade.


September 22, 2009 09:27 AM

If education achievement, urban development, infrastructure, poverty eradication are considered, then China is way worse than all developed and most developing nations (i.e. Malaysia, Thailand, and the Philippines), and China is probably on par with the African countries when it comes to poverty (most than 70% of the Chinese, or 8 million rural Chinese live on the poverty line), infrastructures and education (China is still far behind even most developing countries).


September 23, 2009 11:15 PM

You have a very important point. Now what for Korea. In fact, in today's world the status 'developed' gives a sense that the country is over the top (its prime is in the past). Most countries now prefer to be categorised as 'advanced developing'. Think about an individual. We she like to called 'growing' or 'grown'.


October 12, 2009 05:18 AM

@Business Nguyen.
I agree with you except your last sentence considering education achievement, urban development, infrastructure, and poverty eradication. Chinise government still efforts to crusade against illiteracy and increase access to education; People as ever live in crime-infested urban ghettos and China accounted for almost 80 percent of all executions in the world; The lack of transportation infrastructure is a major obstacle to efficient distribution ; GDP per capita stays below about 3,000 dollars and three-quarters of the population live below the poverty line. Whatever you say is fine, and whether you agree or not doesn't matter as long as you show interest in the conversation.


October 12, 2009 11:41 AM

@Business Nguyen, If Chinese President Hu called for new talks with Tibet in an effort to maintain peace in the region, China could be the 4st developed country in the current rankings behind Japan, South Korea, and Taiwan.


October 13, 2009 02:51 AM

@ PROF-AURNOB-ROY-INDIA. The more loggers are preparing to cut down trees, the more widen the gap between rich and poor. We need to cut back on fatty food, such as butter, bacon, and meat though lots of Koreans are vegetarians and no wonder they're skinny. I wasn't cut out for this but now it tastes just right to me. It is time to cut the crust off, make diagonal slices to form four triangles, and aid it for 4 billion people. You'll be tickled pink to know that your donation will help feed quite a few hungry people.


October 13, 2009 09:21 AM

Poor Business Nguyen looked to pay sweetly for his/her mistake when Truthbehold got together with ILOVECHINA and peace-and-liberty going him/her at. 3 guys gave the answer away and got through with their works. I also meant to give a synonym for that and get down to brass tacks. But I never got around it as I don't know how to go it about. Those get by for now. Anyway, Good comments! Not exactly but what I wanted to say. Business Nguyen, go this around once more, be careful when you give your personal opinion out, and hang around with them well next time, On, On. If I keep coming back and going it over, I'll give in.


October 13, 2009 09:33 AM

When do Asian economies come out of hibernation? They are coming up NOW. Maybe South Korea, developed-new- country will be looked to as a model for how a turnabout can come about in Aisa.
Most Asian people start to feel a little confident, and as time passed by, everything will turn out all right in Asia as South Korea is recognized internationally as one of developed nation.
Analysts once predicted that South Korea would shrink again at the end of 1998. But its growth turned out to be a surprising 9.5% owing to ingredients of growth—open markets, rapid productivity growth, a high saving rate to finance investment, and cut-the-chatter-and-get-down-to-the-work. That helps us explain why the Asian economies could develop and recover more quickly.
In fact, analysts suggest that emerging Asia(Malaysia, Indonesia, Thailand, and the Philippines ect.) could grow by at least about 5%, while the rich economies contract by about 3%. The gap between growth rates in Asian economies and the rich economies is expected to rise to a record 9%p this year. Their experiment is coming off and their efforts are coming to fruition at last coming up with a fantastic result.
The number of developed country of Asia comes to only 2 or 3 such as Japan and South Korea except several city-states such as Singapore and Hongkong so far. But it will come up to the nember of Western Europe in the near term.
I come down with a cold, give heat off a little, and now under domiciliary treatment surfing the web. I seem to come across not only simple but also interesting article. What is your opinion about my claim if you understand what I'm trying to get across? I'll come by again after coming in for a check-up and getting over my cold.

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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