Investment bank Morgan Stanley said today it has sold a portion of itself ( 9.9 % or less of Morgan Stanley's total shares outstanding.) to China Investment Corp., an investment arm of the Chinese government, for $5 billion to raise capital after taking $9.4 billion in writedowns on mortgage-related investments.
The Blue chip Wall Street bankers report a loss of $3.59 billion, or $3.61 a share, during the fourth quarter ended Nov. 30, marking the first time Morgan Stanley has posted a quarterly loss in its 72-year history. Just a year ago, Morgan Stanley posted a profit of $2.21 billion or $2.08 a share.
In the latest major overseas investment by a sovereign wealth fund, the Government of Singapore Investment Corp (GIC) said last week that it would inject 11 billion Swiss francs (US$9.74 billion) into UBS, Switzerland's largest bank.
UBS said a strategic investor in the Middle East, which it did not want to identify, is injecting an additional 2 billion francs into the bank, which revealed further writedowns of around US$10 billion due to a crisis in the US subprime mortgage sector.Dow Chemical is to place its plastics business in a joint venture with Kuwait's state oil company.
Citigroup announced some $6.8bn of write-downs and losses in the third quarter, and the potential for another $11bn in the fourth quarter.It then sold up to 4.9 % of itself for $7.5 billion to the Gulf Arab emirate of Abu Dhabi in a complicated deal that involves paying a fixed coupon of 11%. That is well above the average yield on US junk bonds of 9.4 per cent, according to Merrill Lynch data.
Abu Dhabi will be Citi's largest shareholder.
In May, China's (then) new state investment agency, China Investment Corp., took a $3 billion stake in U.S. private equity firm The Blackstone Group,this is in the form of a non-voting stake of just under 10%.
Billionaire corporate raider Nelson Peltz's Trian Group has teamed up with up with the Qatar Investment Authority, an arm of the emirate's government, and in a classic corporate raid they now have 4.5% of the company.(Peltz bought drinks group Snapple for US$300m (£149m) and sold it three years later for US$1.5bn.)
Today it has been announced that Milestone Resources, the investment arm of Dubai based Mahesh “Micky” Jagtiani’s Landmark Group, had acquired a 7.4% stake in Debenham's plc and could be poised to buy it. ( A trade off maybe for thr news that UNiversal Studios are helping to make Dubailand the ME Disneyland ...given the outdoor temperatures in Dubai , truly a Hell on Earth)
Bear Stearns reports results tommorrow before the bell. Wear a hard hat.