Morgan Stanley Bets on China
Morgan Stanley is raising its bet on China.
For a decade, the firm has committed money and energy into China to build relationships and its brand name. The leader in winning Chinese banking business, Morgan Stanley is also taking bigger and bolder bets in areas its competitors have yet to explore.
But its strategy is being tested by increasingly aggressive competitors eager for a slice of the lucrative Chinese market -- and its lead in some crucial businesses is narrowing.
New York-based Morgan Stanley's approach to China, forged a decade ago under former President John Mack and continuing under current President Stephan Newhouse and Chairman Philip Purcell, is broader than those of its competitors. Aside from pursuing the bread-and-butter businesses of stock underwriting and mergers-and-acquisition advisory, Morgan Stanley is sinking serious cash -- more than any other investment bank to date -- into investments ranging from luxury apartments to bad bank loans, as well as taking equity stakes in the fledgling private sector.
All told, Morgan Stanley has invested about US$600 million of its own and its clients' capital into Shanghai and Hong Kong property projects, Chinese distressed debt and several private companies, betting their value will rise along with the fortunes of China's 1.3 billion people.
"There's no question that China is a cornerstone of our Asian strategy for the next 20 years," Mr. Newhouse, also chairman of Morgan Stanley International, said in an interview in Shanghai. Mr. Newhouse was in from New York to preside over an expansion of Morgan Stanley's research operation in Shanghai.
Morgan Stanley won't break out revenue or profit figures for its China operations. But its annual China revenue has increased 12-fold over the past decade, a spokeswoman says.
Capital Investments
Those capital investments have both benefited from and buttressed Morgan Stanley's investment-banking efforts. For example, Morgan Stanley is the lead manager for the planned listing of China Construction Bank, one of China's largest lenders, and Morgan Stanley's partner for the past decade in China International Capital Corp., the dominant Chinese investment bank. Morgan Stanley owns 34.3% of the Chinese bank, known as CICC.
And Morgan Stanley Real Estate Fund, the bank's property and distressed-debt investment arm, in January co-invested US$50 million in an upscale residential project in Shanghai with Chinese property developer Shanghai Forte Land Co. That same month, Morgan Stanley led Shanghai Forte's US$220 million initial public offering.
Similarly, the bank's private-equity arm has helped win business with its investments. For example, it has taken stakes in Ping An Insurance and MengNiu Dairy, a large Mongolian milk company; both chose Morgan Stanley to lead their planned initial public offerings.
The Asian face of Morgan Stanley is also looking, or at least sounding, more Chinese. During the past five years, the firm has doubled its number of Mandarin-speaking investment bankers working on China to 40. It is expanding its research team in Shanghai to between 12 and 14 staff members from an existing five to boost its Hong Kong-initiated coverage of Chinese Class A shares -- China-listed stocks currently available to qualified foreign institutional investors only through approved brokers such as Morgan Stanley.
The on-the-ground research staff members also are expected to help global analysts such as Mary Meeker, who recently published a 217-page bullish report on the Chinese Internet sector, and chief economist Stephen Roach, who has been making regular business pilgrimages to China since 1997.
Growing Competition
Despite these strengths, its lead over rival banks is rapidly narrowing. Morgan holds the No. 2 position for lead-managing the most IPOs in China since 2000, when the China IPO market got hot. The top spot is held by CICC, based in Beijing. But rivals such as Credit Suisse First Boston, which is now run by former Morgan Stanley chief Mr. Mack, are catching up.
In 2000, Morgan Stanley-led deals accounted for 71% of all stock fund raising out of China, while CSFB lagged behind in sixth place with deals representing 0.69% of the total, according to data firm Dealogic.
Thanks to a US$3.5 billion IPO mandate last year for China Life Insurance Co., CSFB's average market share from 2000 through April 20 of this year jumped to third place at 30% versus Morgan Stanley's 43%. CSFB, whose executives are fond of recalling Mr. Mack's long track record of frequent China visits -- claiming credit for dozens of trips he made on behalf of Morgan Stanley -- say that they too are building a broader business in China.
"China is not just about IPOs," says Wei Christianson, CSFB's country manager for China, who jumped ship from Morgan Stanley less than a year after Mr. Mack. "The opportunities in China now touch nearly all of our product areas," she added.
Some rivals say they can compete seriously with Morgan Stanley, in spite of its strong position in China. "I'm not afraid of them," says Charles Li, head of J.P. Morgan Chase & Co.'s China investment-banking. "Their effectiveness could be easily defeated were it not for the CICC angle. That's the only secret weapon that significantly differentiates them from anyone else."
An executive from another Western investment bank, who declined to be named, says CICC could eventually pose a "significant strategic challenge" as Morgan Stanley can't raise its stake in the Chinese firm and might have to sell it once the U.S. firm gets more heavily into domestic China business itself. Morgan Stanley and CICC "are the best competitors we have in the China market, but their overall strategy isn't that different than ours," the executive added.
Morgan Stanley declined to comment on its competitors.
Capital Markets
A competitive area that does concern Morgan Stanley's Mr. Newhouse, however, is the capital-markets business, and the fixed-income market in particular.
Currently, only commercial banks are allowed to underwrite bond deals or apply for licenses to trade Chinese Treasurys derivatives. The government granted HSBC PLC approval in February, after a three-year application process, to underwrite Chinese Treasurys for the government-bond program. This is estimated to raise as much as US$84 billion this year after a record US$76 billion in 2003. CSFB, which has a commercial-bank branch in Shanghai, is active in the yuan-denominated fixed-income trading market and has applied for a derivatives license.
Mr. Newhouse wants securities firms to be able to compete in the business as well. "It's not going to happen overnight, but it'll happen as quickly as China believes it's advantageous to accelerate the banking reforms," he says.
As Morgan Stanley focuses on domestic opportunities, it faces a challenge that it appeared to have solved a decade ago: building a joint-venture operation that is qualified to do domestic deals. Morgan Stanley built CICC with China Construction Bank long before its competitors entered China.
The firm has more than an 80% market share of the domestic stock underwriting.
Though the relationship is financially lucrative, Morgan Stanley has distanced itself from CICC's daily operations. Morgan Stanley executives say that this was always part of its plan. But having made the split, the firm needs a new platform if it wants to compete domestically.
Mr. Newhouse, says CICC has been "a remarkably successful strategy, although in the early days it was a lot of sweat and not much juice." He says he is noncommittal about building a local operation now, even while rivals including Goldman Sachs look to do so. Mr. Newhouse is concerned with Chinese regulations, which currently require Chinese investment banks to be formed through joint-venture partnerships that wouldn't give the foreign party management control. Because of this, he doubts Morgan Stanley's position will be challenged anytime soon by foreign-branded investment banks in China.
"We've been slugging away here for 10 years," he said. "A lot of people have arrived in terms of investment banks and securities business pretty recently. The Chinese appreciate the value of commitment, of investment, and of relationships."
摩根士丹利在中国的领先优势受到威胁
摩根士丹利(Morgan Stanley)加大了对中国市场的投资力度。
十年来，摩根士丹利始终致力于在中国建立业务联系和拓展品牌形象。它不但拔得外资企业赢得中国银行业务的头筹，而且还在竞争对手尚未染指的领域加大了投资力度。
但随著越来越多的竞争对手渴望从中国市场中分得一杯羹，摩根士丹利的经营战略受到了挑战。并且，在某些重要的业务领域，竞争对手正在缩小同摩根士丹利之间的差距。
摩根士丹利的中国战略出自前任总裁麦晋桁(John Mack)之手，之后得到了现任总裁柳浩思(Stephan Newhouse)以及董事长裴熙亮(Philip Purcell)的贯彻。该公司在中国的业务范围比其竞争对手更为广泛。除了争取股票承销以及为并购交易提供咨询这类支柱业务之外，摩根士丹利还向中国市场投入了大量的现金，投资领域涉及高档房地产、购买坏帐以及收购民营企业股份等诸多方面。目前为止，它对中国市场的投资力度是其他投资银行所望尘莫及的。
摩根士丹利在投资上海和香港的房地产项目、收购中国的坏帐以及参股几家民营企业方面共投入了约6亿美元的自有及客户资金。它认为，随著中国经济的繁荣发展，它的投资会获得回报。
同时还担任著摩根士丹利国际(Morgan Stanley International)董事长一职的柳浩思在上海接受采访时表示，毫无疑问，中国是今后20年该公司亚洲战略的基石。柳浩思从纽约来到上海是为了主持该公司研究业务的拓展仪式的。
摩根士丹利没有透露中国业务的收入或者利润数据。但据该公司发言人称，过去十年中国业务的收入增长了12倍。
可以用相辅相成一词来形容摩根士丹利的资本投资与投行业务之间的关系。例如，它是中国四大国有银行之一建设银行(China Construction Bank)上市计划的牵头经办人。10年前，摩根士丹利与建设银行合作成立了中国国际金融有限公司(China International Capital Corp., 简称CICC)。CICC现已成为中国占主导地位的投资银行，摩根士丹利持有其中34.3%的股份。
摩根士丹利的房地产及坏帐投资部门摩根士丹利房地产基金(Morgan Stanley Real Estate Fund)于今年1月与中国房地产开发商复地（集团）股份有限公司(Shanghai Forte Land Co. Ltd.)联合向上海一高档住宅项目投资5,000万美元。当月，摩根士丹利成为复地2.2亿美元首次公开募股(IPO)的牵头经办人。
类似的是，该行的直接投资部也通过投资的方式为公司赢得了投行业务。例如，摩根士丹利持有平安保险(Ping An Insurance)和内蒙古乳业公司蒙牛乳业(MengNiu Dairy)的股份，这两家公司也都选择摩根士丹利作为IPO计划的牵头经办人。
就连摩根士丹利的亚洲业务团队也更加中国化。过去5年间，该公司讲普通话的中国问题投资银行家数量增长了一倍，达到40人。公司还准备把驻上海的研究人员数量从现有的5人扩大至12-14人，以此来为在香港推出的中国A股追踪分析业务提供支持。外国投资者要想投资中国A股，只能通过摩根士丹利等获得合格境外机构投资者资格(Qualified Foreign Institutional Investors QFII)的经纪公司来办理。
另外，研究人员还可以为玛丽?米克(Mary Meeker)、首席经济师史蒂芬?罗奇(Stephen Roach)等全球分析师提供辅助服务。米克最近发布了一篇长达217页看好中国互联网行业的报告，而罗奇则自1997年以来一直定期走访中国。
尽管摩根士丹利有上述种种优势，但它的领先优势正在急剧缩小。2000年以来，以承办中国企业的IPO规模而论，摩根士丹利排名第二，仅次于CICC。但由摩根士丹利前总裁麦晋桁执掌的瑞士信贷第一波士顿(Credit Suisse First Boston Corp., 简称CSFB)等一批竞争对手正在奋起直追。
据Dealogic提供的数据显示，2000年，摩根士丹利牵头经办的IPO的筹资额占到中国企业IPO筹集资金总额的71%，而CSFB的占有率只有0.69%，仅位居第六。
但由于去年为中国人寿保险股份有限公司(China Life Insurance Co., 简称：中国人寿)承办了35亿美元的IPO交易，从2002年到今年4月20日这段时期，CSFB的平均市场占有率猛增至30%，居第三位，而同期摩根士丹利的市场占有率却下滑至43%。CSFB称，该公司也准备扩大中国业务。据CSFB的管理人士称，公司在华业务的发展与麦晋桁频繁造访中国有一定的关系。麦晋桁当年在摩根士丹利任职时就曾多次出访中国。
CSFB的中国区经理孙玮(Wei Christianson)称，中国市场可不止IPO一个业务。在麦晋桁加盟CSFB后不到一年的时间里，孙玮也从摩根士丹利转投CSFB门下。她表示，公司几乎所有的产品都有可能在中国施展用武之地。
一些竞争对手声称，尽管摩根士丹利中国业务实力雄厚，但他们完全能够与其一决高下。摩根大通(J.P. Morgan Chase & Co.)中国投资银行业务主管Charles Li称，"摩根士丹利没什么可怕的。要不是CICC这层关系，打败摩根士丹利易如反掌。摩根士丹利唯一的秘密武器就是和CICC的这层关系，摩根士丹利明显优于竞争对手的唯一秘密武器就在于此。"
某西方国家投资银行一位拒绝透露姓名的管理人士称，由于不能增持CICC的股本，摩根士丹利最终将在战略上面临严重的挑战。如果该公司获得了更多的中国业务，它就有可能选择出售CICC的持股。该管理人士称，"摩根士丹利和CICC是我们所要面临的最强大的竞争对手，但他们的整体战略与我们的别无二致。"
摩根士丹利拒绝对业内同行发表评论。
柳浩思称，让他颇为担心的一个竞争领域是中国资本市场业务，尤其是债券市场。
在中国，目前只有商业银行才能从事债券承销或申请交易中国国债衍生品的资格。在经过了3年的漫长等待之后，汇丰(HSBC PLC)于今年2月终于获准从事中国国债的承销业务。预计中国政府今年的发债规模将达到840亿美元，继2003年的760亿美元之后再创新高。CSFB也在积极寻求获准进入以人民币计价的债券市场，并已提交了从事衍生品交易的申请。CSFB在上海有一家商业银行。
柳浩思希望证券公司也能参与债券业务的竞争。他表示，此事不可一蹴而就。但一旦意识到放开债券市场有利于促进银行业改革后，中国政府很快就会这样做。
随著摩根士丹利继续注重开拓中国市场，它碰上了一个看起来10年前就本应解决的问题：建立合资企业，作为打入中国市场的突破口。摩根士丹利和建设银行合资成立CICC很久之后，竞争对手才开始进入中国市场。
CICC目前在国内股票承销市场的占有率达到了80%以上。
虽然这种业务联系给摩根士丹利带来了丰厚的利润，但摩根士丹利已经与CICC的日常业务有所疏远。摩根士丹利的管理人士称，这是其计划的一部分。但一旦和CICC毫无瓜葛，该公司为了继续在中国市场上立足就必须寻找新的业务平台。
柳浩思称，尽管早期辛苦、效果也不明显，但毕竟CICC作为公司战略的一部分取得了非凡的成就。他表示，尽管高盛(Goldman Sachs)等竞争对手看上去有意在华建立合资企业，但摩根士丹利现阶段没有这方面的计划。柳浩思担心的是中国政府的监管政策。根据中国目前的监管规定，外资不能在以合资方式设立的中国投资银行中拥有控股权。
柳浩思称，"我们已经在中国辛勤耕耘了10年的时间。一些投资银行和证券公司只不过是刚刚打入中国市场。中国同行看重的是长期的承诺、投资和合作。"
