Morgan Stanley in 20% stake sale

tulip · September 22, 2008, 1:40pm

From the BBC

Morgan Stanley in 20% stake sale

Japanese banking giant Mitsubishi UFJ Financial Group has said it will buy a stake in troubled Wall Street rival Morgan Stanley.

The firm said the stake will account for 10% to 20% of Morgan Stanley’s common shares.

A price has not yet been decided. Further details will be revealed after the group has completed due diligence.

Morgan Stanley has been humbled by the credit crisis tearing through the world’s financial system.

It was widely reported last week that Morgan Stanley was looking for a tie-up to reassure investors worried about its financial health.

The sudden demise of US investment bank Lehman Brothers last week triggered a dramatic collapse in confidence in the world’s financial institutions.

The ensuing turmoil in global markets has forced major changes in the financial landscape.

Morgan Stanley and Goldman Sachs - the two last major investment banks on Wall Street - have been forced to change their status to take deposits from investors to raise funds.

news.bbc.co.uk/2/hi/business/7629516.stm

yoganmahew · October 27, 2008, 10:21pm

bloomberg.com/apps/news?pid= … U&refer=us

Morgan Stanley clients withdrew almost one- third of their cash from money-market accounts last month, forcing the firm to buy $23 billion of securities held by the funds to keep them afloat. Redemptions were $46 billion in September, mostly from funds that invest in corporate debt, Morgan Stanley said in an Oct. 9 regulatory filing. The New York-based company made sure the money-market funds had enough cash to repay investors by acquiring some of their assets with financing from “various available stabilization facilities.”

Morgan Stanley may have relied on one or more programs set up by the Federal Reserve in the past month to prop up the $3.54 trillion money- market fund industry, analysts said. The Fed has taken steps to restore investor confidence shattered by losses last month at the Reserve Primary Fund, the oldest U.S. money-market fund. “The outflows in money-market funds were unprecedented, savage” said Peter Crane, president of Crane Data LLC, a Westborough, Massachusetts, firm that tracks the industry. “Broker-dealers in particular got hard hit because of concerns about their parent companies.”