Morgan Stanley in talks as fear grips market.

[Thinking Man's Idiot]

Morgan Stanley in talks as fear grips market

By Tony Munroe and Steve Slater


HONG KONG/LONDON (Reuters) - Morgan Stanley topped the list of major financial services firms scrambling to sell themselves as fear gripped global credit and stock markets, with former emerging markets darling Russia paralyzed.

Morgan Stanley was discussing a deal with U.S. regional banking powerhouse Wachovia, while CNBC reported that HSBC Holdings and China's CITIC Group were also eyeing the venerable Wall Street firm.

Lloyds TSB achieved a long-held ambition in Britain by scooping up the country's biggest mortgage lender HBOS in a $22 billion all-share deal timed to end a slump in its rival's shares prompted by fears about HBOS's funding
Among the possible buyers of Morgan Stanley, the Government of Singapore Investment Corp (GIC) said it would consider all possibilities, including taking a stake if approached.

A Morgan Stanley spokesman in Hong Kong declined to comment. A spokeswoman at HSBC, which this week became the world's biggest bank by market value, also declined to comment.

A senior executive at the Chinese group's CITIC Securities arm said his firm was not in any talks towards investment in Morgan Stanley. An official with the CITIC group could not be reached for comment.

With the financial landscape undergoing its most dramatic transformation since the Great Depression, potential takeovers lurked for No. 2 U.S. investment bank Morgan Stanley and weakened top U.S. savings bank Washington Mutual.

The MSCI index of Asia stocks excluding Japan fell 3.75 percent, while Tokyo shares were 2.22 percent lower. Hong Kong was especially hard-hit, with the Hang Seng index falling more than 7 percent. Continued...