The closing share prices for Samsung Electronics and SK Hynix are displayed on Jan. 6 at the dealing room of Woori Bank in Seoul's Jung-gu District. (Yonhap News)

By Koh Hyunjeong

The country is seeking inclusion in the Morgan Stanley Capital International (MSCI), a global index for developed markets, to shed the "Korea discount" and ensure proper assessment of the economy.

After consultations with the relevant institutions, the government on Jan. 9 released a comprehensive roadmap for the foreign exchange and capital markets for inclusion in the MSCI.

Every year, the MSCI classifies global stock markets as developed, emerging, frontier or and standalone, with that of Korea deemed emerging. This has resulted in the Korea discount relative to its economic size and the undervaluation of stocks of listed companies.

This phased implementation plan seeks to transform the makeup of the domestic stock market into a developed one through measures like running the foreign exchange market 24 hours a day and launching an offshore settlement system for KRW.

Another goal is inclusion in the World Government Bond Index (WGBI), which starts the process of inclusion in April. The WGBI is used as a benchmark by global pension funds and central banks.

Once inclusion is completed in November, institutional investors can buy government bonds according to each country's share.

Industry forecasts said an estimated KRW 80 trillion of foreign capital will enter the government bond market during the WGBI inclusion period. This will not only stabilize the bonds' interest rates but also depreciate and stabilize domestic currency.

hjkoh@korea.kr