WRAPUP-2-M.Stanley under pressure on MUFG concerns, outlook

viernes 10 de octubre de 2008 10:37 CEST

* Moody's says it may cut Morgan's long-term debt ratings

* Ladenburg Thalman's Bove cuts price target, cites pressure

* Mitsubishi UFJ repeats it has no plans to pull out of deal (Adds quotes from Tai Fook, Celent)

By Michael Flaherty and David Dolan

HONG KONG/TOKYO, Oct 10 (Reuters) - Pressure mounted on Morgan Stanley (MS.N: Cotización) on Friday, with investors unconvinced about its deal with Mitsubishi UFJ (8306.T: Cotización) and two analyst reports citing concerns about the bank's earnings outlook.

Shares of Morgan Stanley have lost nearly half their value in the last three days, on worries Mitsubishi UFJ may back out of injecting the much-needed capital. The plunge came despite promises from both banks that the deal was expected to close on Tuesday.

"Until the deal is finalised, there's uncertainty in the market," said Marco Mak, head of research, at Tai Fook Securities. "There are so many rumours. It's basically a loss of confidence."

The two analyst reports, one by brokerage Ladenburg Thalman, the other by ratings agency Moody's, came at an extremely delicate time for the bank, with its stock headed toward single digit territory.

After cutting Morgan Stanley's price target, Richard Bove, Ladenburg Thalman's veteran Wall Street analyst said the pressures on the company is "enormous" and that one of the concerns is that Morgan is believed to be counterparty to "numbers" of Lehman Brothers transactions. Lehman Brothers filed for bankruptcy last month.   Continuación...