http://www.businesstimes.com.sg/allt...4985,,00.html?
Published October 8, 2008
Morgan Stanley optimistic about Asia
SEA chief says it'll continue to grow S'pore, Asia business
By CONRAD TAN
(SINGAPORE) Morgan Stanley will continue to grow its operations in Singapore and the rest of Asia despite recent changes affecting its American parent company, its South-east Asian head said yesterday.
Ronald Ong, Morgan Stanley's chief executive for South-east Asia, told reporters that its main business lines in Asia are doing well.
Mergers and acquisitions business across the region has hit 'a record level' this year, he said. And as for investment banking business in Singapore: 'This year is probably going to end up one of our best.'
This trend is likely to continue over the next year or so. 'The M&A business has actually increased quite substantially. I see M&A driving investment banking business for at least the next 6-12 months,' he said.
But the capital markets business - helping companies raise funds from investors through share or debt issues - has slowed since the middle of the year. 'We're seeing some transactions done, but only for high-quality issuers.'
Despite the sharp withdrawal of funding from credit markets worldwide, finance has not dried up completely, he said. 'For the right deal and right client, it continues to be available.'
That Neptune Orient Lines was able to obtain finance for its recent US$5 billion bid for German carrier Hapag-Lloyd shows there are still investors willing to back deals, he pointed out.
Last week, Japan's Mitsubishi UFJ Financial Group (MUFG), one of the world's biggest banks with US$1.1 trillion of deposits, bought a 21 per cent stake in Morgan Stanley for US$9 billion.
The capital injection came days after US regulators gave Morgan Stanley approval to convert itself into a bank holding company, which effectively turned the standalone investment bank into a commercial bank, subject to stricter federal regulation.
The changes 'will not affect our operations', said Mr Ong. 'In fact, it's positive for our clients and our service and business.'
Morgan Stanley recognises the continued importance of Asia to its business, he said. Asia now contributes about a sixth of the bank's global revenue and 'we see that increasing'.
Morgan Stanley has 27 investment bankers in Singapore, including two senior bankers who moved here recently from London and New York. The bank is also adding staff in Indonesia, where it recently received a licence for securities underwriting.
Other divisions, including fixed-income, equities, commodities and asset management, are also doing well, Mr Ong said.
Tan Su Shan, who joined Morgan Stanley in May as managing director of its private wealth management business in South-east Asia, said that the bank has added new private clients. 'For September alone, year on year, we saw double-digit growth in our business.'
With MUFG as a major shareholder, Morgan Stanley - which has been exploring options for expanding its private banking business in Asia - could form a 'strategic alliance' with the Japanese bank, though no such decision has been made yet, Ms Tan said. 'We want to build a full private bank. The MUFG deal does give us a third option of a strategic alliance, which we are still exploring. The first two options are to build our own, or to buy.'