| BUSINESSWEEK ONLINE : NOVEMBER 1, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- COVER STORY
Storming Ahead of the Pack in Asia (int'l edition) The big U.S. and European investment banks are eager to profit from the recovery story in Asia. None more than Morgan Stanley Dean Witter, which now enjoys across-the-board strength in everything from equity and debt underwriting to investment banking. It's one of the most profitable foreign investment banks in Japan. Elsewhere in the region, Morgan says it has stormed ahead of rivals such as Merrill Lynch & Co. and Goldman, Sachs & Co. this year in the league tables for equity-linked finance, debt market deals, and merger advisory work. Morgan got there by making a shrewd bet last year that Asia will emerge as the next big restructuring play after Europe. It increased the firm's head count by 15% in 1998 outside of Japan, expanded outside its core markets in Hong Kong and Singapore, and beefed up its research and investment banking focus in telecommunications, the Internet, and government asset sales. ''We took the view that we could build market share,'' says Mario Francescotti, president of Morgan Stanley Asia Ltd. So far the bet is paying off. In May, Morgan handled a $2.4 billion global equity offering for Korea Telecom Corp., the biggest-ever share sale by a Korean company. It has raised equity for Industrial Finance Corp. of Thailand and handled a $1 billion debt offering for Kowloon Canton Railway Corp. Through September, Morgan had won 14 merger-and-acquisition deals valued at $5 billion--ahead of Merrill's $4.1 billion. In China, Morgan Stanley also has a big presence, though Francescotti concedes the mainland is a long-term bet. Three years ago, Morgan Stanley teamed up with China Construction Bank to create China International Capital Corp., which handles investment banking and equity offering on the mainland. Francescotti admits there has been some friction in the past over management of the joint venture and that Beijing probably would like CICC to emerge as a truly independent player. CICC also often works with Merrill or Goldman, leaving Morgan Stanley an indirect cut of the action via its 35% equity stake in the Chinese investment bank. Morgan is working directly with CICC on the upcoming initial public offering of China Unicom, the nation's No. 2 mobile phone operator. INROADS. Morgan is stalking even bigger quarry in Japan, where it has a booming equity- and debt capital-raising operation. Now the firm is making inroads into state and corporate pension fund management. On the retail side, it offers a menu of 31 equity and bond investment trusts. All told, Morgan Stanley now has $9 billion in assets under management. Morgan Stanley Japan Ltd. President Thierry Portier sees other big opportunities. Morgan is handling the sale of nationalized Nippon Credit Bank and has helped broker cross-border alliances such as the global tire joint venture between Goodyear Tire & Rubber Co. and Sumitomo. There will be more merger work as Japanese companies step up their restructuring. Later, plenty of capital will need to be raised as a revived Japan Inc. starts investing and expanding again. Portier thinks Morgan Stanley's ''network around the world will make a big difference'' and keep the firm busy. Plenty of other global investment banks have the same idea. But for the moment, Morgan Stanley is firing on all cylinders. By Brian Bremner in Tokyo _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS Morgan Stanley: The Deal Machine (int'l edition) COVER IMAGE: Morgan Stanley: The Deal Machine TABLE: Morgan Stanley's Growing Influence in Europe TABLE: The Battle for Europe's Markets Storming Ahead of the Pack in Asia (int'l edition) INTERACT E-Mail to Business Week Online | |||
