Morgan Stanley Ties with OSF - Analyst Blog


Morgan Stanley ( MS ) recently announced that its private-equity business has made an alliance with OSF Merchant Banking to make equity investments in the Brazilian market. The company's lucid intentions to make strategic investments in the world's second largest economy are indeed laudatory.

Together with OSF, Morgan Stanley would eye equity investments in relative medium-sized companies with healthy operating margins and good expansion potential. This move is highly approbatory as Brazil currently is a haven for capital allocation with its ever-emerging powerful economy.

With around $2.5 billion in the Asian and other emerging economies, Morgan Stanley has been extremely proactive with its private equity investment businesses globally. Currently, it has a total of $8 billion investments made since 1985 in this regard. 

Morgan Stanley reported its December quarter financial results of 2011 on January 19, 2012. Its Institutional Securities segment reported an annual increase in revenues of 6.4% to reach $17.2 billion in 2011. Moreover, total revenue also came in at a whopping $32.4 billion in 2011, increasing 3% from the previous year. It will not be an exaggeration to state that the company would tread on similar lines of growth in 2012 as well.

However, the company should not be complacent in its ever-so competitive industry. Jefferies Group, Inc. ( JEF ) recently reported an annual increase of 20% from its investment banking businesses in its first quarter financial results of fiscal 2012. Other ominous competitors prevalent in the industry are Nomura Holdings Inc. ( NMR ) and TD Ameritrade Holding Corp. ( AMTD ).

We continue to maintain a Neutral recommendation on Morgan Stanley. Our view is supported by a Zacks #3 Rank on the stock which translates into a short-term rating of Hold.

TD AMERITRADE ( AMTD ): Free Stock Analysis Report
JEFFERIES GP-NW ( JEF ): Free Stock Analysis Report

MORGAN STANLEY ( MS ): Free Stock Analysis Report
NOMURA HLDG-ADR ( NMR ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AMTD , JEF , MS , NMR

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