Morgan Stanley to go it alone in India

26 February 2007

Morgan Stanley and JM Financial are to end their investment banking joint venture in India.

After persistent rumors that an end to the ten-year-old venture was imminent, Morgan Stanley has announced it will pay $425 million for the research, trading platform and institutional equities sales. Meanwhile, JM Financial will pay $20 million for the fixed income, investment and retail banking facets of the operation.

The split in the joint venture, which recorded the third-largest revenue among Indian investment banks last year, comes as Morgan Stanley looks to establish a banking operation of its own in India, akin to those of Goldman Sachs and Merrill Lynch.

Commenting on the move in a statement Hans Schuettler, Asia chief executive, said: "It is now the right time for Morgan Stanley to develop a wholly-owned full service India platform.

"This investment demonstrates our commitment and confidence in India, the growth of the market and the fast changing needs of our clients."

Last year investment banking revenue in India recorded a rise of 23 per cent to $413 million.

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