Morgan Stanley Hires Carlos Oyarbide as COO for China (Update3)

Morgan Stanley hired former Credit
Suisse banker Carlos Oyarbide as chief operating officer in
China to help expand in the world's fourth-largest economy.

Oyarbide, 48, will be a managing director, reporting to Wei
Christianson, chief executive officer of China. He will start in
July, Morgan Stanley said in a press release.

Morgan Stanley, the second-biggest securities firm, has
sought to expand in emerging markets to cut its reliance on the
U.S. In China, it won rights to apply to offer yuan-denominated
services and mortgage-backed securities last year when it bought
Nan Tung Bank, based in the southern city of Zhuhai.

Overseas banks are accelerating expansion in the world's
fastest-growing major economy after the nation opened its
banking industry in December. Morgan Stanley has stepped up
hiring since last year after it slipped behind UBS AG and
Goldman Sachs Group Inc. in share sales and takeovers in China.

The firm last week appointed chief economist Stephen Roach
as Asia chairman to lead a drive to arrange more takeovers and
stock sales in the region. In April, it hired Blair Pickerell to
head its investment funds unit in Asia. As head of HSBC Asset
Management (Hong Kong) Ltd., Pickerell had helped set up a China
fund-management venture with Shanxi Trust & Investment Corp.

Recent Hires

In the past two months in China, Morgan Stanley has hired
Guy Cui as managing director from HSBC Holdings Plc, Daniel Qiu
and Jerry Tse from Deutsche Bank AG and James Nien from JPMorgan
Chase & Co.

Oyarbide resigned as head of Credit Suisse's financial
institutions group in Asia excluding Japan last month. Before
joining the Zurich-based bank in 2003, he worked for Morgan
Stanley for 10 years, mostly based in Europe and including an
assignment in Hong Kong from 1999 to 2000. He graduated from the
Wharton school of business in 1983 and held posts with UBS AG
and management consultant firm Mckinsey & Co.

``I am delighted to welcome the return of Carlos, whom I
have known and respected for many years,'' Christianson said in
the release. ``Carlos's diverse experience and strong China
exposure position him well for this important role.''

Former Colleagues

Christianson had been a colleague of Oyarbide at Credit
Suisse and Morgan Stanley. She resigned as chairwoman of Credit
Suisse's investment banking unit in China in 2004, and was hired
by Citigroup Inc. to head the China investment banking team in
September the same year before rejoining Morgan Stanley last
year.

Morgan Stanley ranks second this year in advising on
overseas share sales by Chinese companies, up from 10th in 2006,
according to data compiled by Bloomberg. It ranked eighth in
advising on mergers and acquisitions that involved China last
year, down from third position from 2003 to 2005.

The company, the first overseas bank to buy a stake in a
Chinese securities firm, doesn't have a license to manage a
domestic Chinese offering.

While Morgan Stanley owns 34 percent of China International
Capital Corp., it has no management control. Elaine La Roche was
the last Morgan Stanley-appointed CEO of CICC, stepping down in
June 2000. She said there had been disagreements over management
in a 2005 interview with Bloomberg. Since then, Goldman Sachs
Group Inc. and UBS AG have set up brokerage ventures in China
that are licensed to underwrite stock sales.

The Chinese government last year stopped issuing new
licenses to foreign firms.

``Our partnership with CICC has worked out extremely well
because the Chinese appreciate the value of commitment and of
relationship,'' Christianson said. ``Our goal now is to continue
to help CICC where they require.''

International firms such as Citigroup Inc. and Deutsche
Bank AG have been competing for talent in a market where equity
sales and takeovers in China reached a record $137 billion last
year.

Adding Outlets

Citigroup Chief Executive Charles Prince said in March the
firm will add 14 outlets in China this year and expand
investment banking operations in the country. The bank last
month hired Eugene Qian from Deutsche Bank AG as managing
director of China investment banking.

Morgan Stanley has expanded in Asian markets including
China, India, Korea and Japan. In March, the firm said it would
pay $425 million to buy out its Indian joint venture with JM
Financial Ltd., opting to go it alone in the world's second-
fastest-growing major economy.

The bank also bought a Turkish brokerage as part of its
plan to start offering a range of businesses including trading,
investment banking and real estate, it said in November.

To contact the reporter on this story:
Cathy Chan in Hong Kong at
.