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| Version 1 | Version 2 |
|---|---|
| Morgan Stanley takes $9.4bn hit | Morgan Stanley takes $9.4bn hit |
| (21 minutes later) | |
| Morgan Stanley has revealed a bigger-than-expected write-down of assets and sold a $5bn (£2.5bn) stake to a Chinese sovereign wealth fund. | |
| The US investment bank said that it had been forced to write down $9.4bn for the three months to 30 November. | The US investment bank said that it had been forced to write down $9.4bn for the three months to 30 November. |
| The bank said last month that it would be taking a charge of $3.7bn. | The bank said last month that it would be taking a charge of $3.7bn. |
| Morgan Stanley said that the injection from China Investment Corp - which equates to 9.9% of the bank - would help it to replenish its capital. | Morgan Stanley said that the injection from China Investment Corp - which equates to 9.9% of the bank - would help it to replenish its capital. |
| Chief executive John Mack said that the losses were "deeply disappointing" and that he would not be accepting a bonus for 2007. | |
| The woes in the sector have already seen the firm's highest ranked woman, Zoe Cruz, leave the firm. | |
| Other banks have also been hit, and Merrill Lynch's boss Stan O'Neal and Citigroup's chief executive Charles Prince have both left their posts. | |
| Sovereign investment | |
| Morgan Stanley, which saw a $1.2bn write-down in the three months to the end of August, said that it still had about $1.8bn-worth of exposure to sub-prime mortgages on its books. | |
| Over the past few weeks, a string of global banks have indicated how much they have lost as a result of exposure to investment products linked to US sub-prime mortgages. | |
| So far announced losses have totalled over $70bn, but the final toll might be much higher. | |
| The Organization for Economic Cooperation and Development (OECD) has predicted that losses will reach $300bn, and Goldman Sachs is forecasting $400bn. | |
| Analysts said that while there was negative sentiment surrounding Morgan Stanley's write downs, the investment from China was positive. | |
| A number of other large investment banks have also received cash injections from sovereign wealth funds. | |
| In October, Bear Stearns agreed to a $1bn investment from Citic Securities, which is controlled by China's government. | |
| Meanwhile, Citigroup sold a stake worth $7.5bn to the Abu Dhabi government's investment arm. | |
| And earlier this month, UBS revealed that it had received a $9.7bn injection of funds from the Government of Singapore Investment Corporation. |