Morgan Stanley Asia sticks to equity products

The co-heads of Morgan Stanley's Asia-Pacific business said the bank is focused on its "bread and butter" equity products, while its clients eye acquisition opportunities in Europe and investment targets in Indonesia.
"Regarding China outbound at the corporate level, even though there is a lot of uncertainty, there are still a lot of conversations going on between China and Europe," said Wei Sun Christianson, who is Morgan Stanley's China CEO, in addition to co-CEO of Asia-Pacific.
Christianson said China corporates are more interested in scooping up certain European assets at a good value, rather than full acquisitions of companies. William Strong, who relocated to Hong Kong from Chicago after being named co-head in March, added that prospective Asia buyers looking west are, at the same time, being cautious.
Christianson and Strong were talking to Reuters in an interview on the sidelines of the bank's Asia-Pacific Summit, held in Singapore. Other Asian clients, however, are more focused on keeping their money closer to home, with Indonesia emerging as one of the most favoured investment destinations.
"If you look at the expected growth rates, improving sovereign credit, and low household debt there's a whole series of reasons why you can see that's going to be a very good place to invest," said Strong.
Strong added that the bank is pursuing certain licenses in the region that will strengthen its business offering once proper approval is granted. Morgan Stanley has doubled the size of its capital markets equity derivatives team in Asia-Pacific in the last 18 months. The team is focusing on structured buybacks, structured financings and hedging solutions.
Morgan Stanley is currently ranked in the top three and four spots for Asia-Pacific equity capital markets underwriting and M&A advisory, according to Thomson Reuters data.
But the bank has not cracked the top-20 in Asia-Pacific debt underwriting this year, the data shows. "Fixed income is a core part of our franchise, and it's an area we're seeking to grow," Strong said.
While the market turmoil has deterred many companies from raising equity, Christianson said they still had a lot of interest from Chinese companies wanting to go public.
"We win one, sometimes two deals a week, and our threshold is very high - you have to be a certain size of deal in order for our team to take the mandate so it's still very active," she said.
The bank launched its joint venture with China partner Huaxin Securities in June, having sold its stake in the tie-up with China International Capital Corp last year.
Christianson said that they were making solid progress and was hopeful of avoiding some of the problems that have hit other international banks' tie-ups with Chinese banks.