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COMMODITIES UNIT

Qatar seriously studying M Stanley investment

Doha, October 15, 2012

Qatar is studying a proposal to invest in the commodities trading arm of US investment bank Morgan Stanley, its prime minister said on Monday.

"We probably need a few more weeks to review the details, but we are looking at it seriously," Sheikh Hamad bin Jassim al-Thani told a news conference without elaborating on any terms of an investment.

Morgan Stanley has been in discussions with Qatar for more than a year over the sale of at least a majority stake in its energy-focused trading business, according to bankers.

From an estimated peak of $3 billion in 2008, Morgan Stanley's commodities trading revenues have dropped sharply, partly because of the Volcker rule that bans banks from proprietary trading and partly because of capital constraints.

Earlier this month banking sources said the talks had run into difficulty and the deal might need to be reworked if it were to go ahead.

One source said the hitch was not about price but about the structure of the deal, which would see the divested unit run by the existing commodities team at Morgan.

Bankers said the parties had looked at two deals: the sale of a majority stake, at least 75 per cent, and the sale of the whole unit, with commodities managers at Morgan Stanley taking a 20 per cent stake funded by private equity. – Reuters




Tags: Qatar | Morgan Stanley | Doha |

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