A lucky escape?

5 Feb 2008 By Una Galani Follow @ugalani

A landmark joint venture announced last March, giving Morgan Stanley a step up over its rivals, collapsed within months of John Mack lauding its importance. That s probably just as well, now that Hanoi s historic rival to the north owns a tenth of the bank.

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Morgan Stanley's proposal to form a landmark joint venture in Vietnam to provide domestic investment banking services has been rejected by the government.

The US investment bank announced a tieup last March with Vietnam's State Capital Investment Corporation (SCIC), a powerful agency which effectively owns most of the country's companies. Both sides had expected the deal to be approved.

SCIC, created in 2005, has capital ownership of the country's 5,000plus staterun companies, accounting for roughly 70% of Vietnam's tax revenues.

In December, China Investment Corporation injected $5bn into Morgan Stanley giving it an effective 10% ownership of the US investment bank.

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