Korean stock market gets a fillip from FTSE Group

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FTSE had previously classed the Seoul exchange as an "advanced emerging". The upgrade takes effect in September next year, FTSE chief executive Mark Makepeace said.

The move is a boost for Korean stocks as some funds are restricted to investing in developed markets because of their perceived lower risk.
Investors who benchmark against FTSE's South Korea indexes may buy shares including Samsung Electronics and steelmaker Posco to reflect the upgrade.

"Leaving the emerging-market indexes will help reduce volatility, which could lead to an improvement in returns," said Suh Kyung Suk, who oversees $2.3 billion in index funds at Samsung Investment Trust Management, the country's biggest index-fund manager.

South Korea has been on FTSE's watch list for a possible upgrade since 2004. Ironically, Korea's benchmark Kospi index, which rose to a record 2064.85 last October, is set for its first yearly drop since 2002 as mortgage-related losses bite.