Morgan Stanley to increase staffs in Japan

By Staff Writer

Feb 08, 2016 03:07 AM EST

The Japanese joint venture of Morgan Stanley intends to hire additional bankers in 2016 in order to contend with its rival Nomura Holdings. In addition, this move by the Bank will also shield its 3-year hold on mergers guidance in the nation.

Haruo Nakamura, Deputy President, said Bloomberg that both Mitsubishi UFJ Financial and Morgan Stanley agreed to boost workforce at their securities company. But, Nakamura failed to give the exact number of staffs being hired at the securities company, reports Bloomberg. For the past 2 years, Mitsubishi had added nearly 60 bankers.

Due to the growing competition from overseas banks, it seems uneasy for Mitsubishi UFJ Morgan Stanley Securities to maintain its position in the industry. Customers believe that Nomura is strong for its huge staff strength, Nakamura added. Mitsubishi UFJ and Morgan Stanley ranked highest in managing bond sales in 2015 while trailing Nomura in equity offerings in Japan.

Both Mitsubishi UFJ and Morgan Stanley have been winning market share in the investment banking sector of Japan since they joined hands 5 years ago. The channel for acquisitions and mergers of Japanese companies has increased greatly to 30% in 2016, according to Nakamura. He also said that the deals valuing more than 1 billion US dollar will grow since more firms are looking for acquisitions in foreign lands and at the same time merging at home.

Analysts set a price target of $36.12 for Morgan Stanley shares, according to Financial Market News. Beacon Capital Management, a hedge fund, bought a fresh stock of Morgan Stanley worth about $0 in the fourth quarter. Another hedge fund firm Quantitative Systematic Strategies purchased a fresh position in the bank worth around $303,000 in the fourth quarter.

This hiring activity contrast with falloffs in European companies like Deutsche Bank AG and Barclays Plc as they face stern capital rules as well as a trading fall. In 2015, Mitsubishi UFJ advised Morgan Stanley over deals worth at 71.8 billion US dollar, thereby topping the positions for the third consecutive year, as per the data by Bloomberg.

Meanwhile, Nomura Holdings' shares have been given a strong buy rating by analysts at Zacks Investment Research, ZOLMAX NEWS said. In addition, Zacks has given the company an industry place of 169 out of 265. In a conference call on February 2, Chief Financial Officer of Nomura, Shigesuke Kashiwagi, said that the brokerage firm has a "decent number" of M&A agreements at present. Nomura, which has a huge workforce and wider customer assets, was selected to manage an Initial Public Offering for Kyushu Railway Co., along with Morgan Stanley.

Morgan Stanley and Mitsubishi UFJ hope to boost their presence in Japan by increasing their workforce. This move to increase the staff will enable them to compete with their rival Nomura and to maintain their position in the investment banking sector.

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