DOW JONES NEWSWIRES
Mitsubishi UFJ Financial Group Inc. (MTU) on Wednesday said
there was "no factual basis" to media reports it had agreed to a
timetable or joint operation in Japan with brokerage firm Morgan
Stanley (MS).
On Tuesday, Japanese business newspaper the Nikkei reported
Mitsubishi UFJ and Morgan Stanley had basically agreed to integrate
their Japanese securities units as early as this fall; once
combined, it would be the third-largest securities house in
Japan.
In a statement Wednesday, however, Mitsubishi said the two sides
continued to discuss "a wide range of opportunities to work
together in many regions globally, including the possibility of
cooperating in Japan."
The Japanese company invested $9 billion in Morgan Stanley last
fall by acquiring preferred stock. Under the deal, Mitsubishi will
raise its stake in the U.S. brokerage to around 20% in the future
by converting this stock into common shares. As part of efforts to
strengthen its own domestic brokerage operations, Mitsubishi had
proposed an integration of these operations in Japan.
Last week, the Japanese company reported its first loss since
its 2005 launch during the April-December period as it blamed
inflated bad loans and losses on equity holdings. The loss
highlighted the degree to which the economic downturn has affected
the bank's profits, though Japanese banks are generally considered
to have been relatively unscathed by the financial crisis.
Morgan Stanley shares recently rose $1.94, or 8.9%, to $22.62.
Mitsubishi UFJ's shares were up 1 cent to $5.18.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com