July 25, 2012 BREAKING NEWS FROM CNBC’S KATE KELLY: MORGAN STANLEY MAY SELL 15% OF COMMODITIES TO QATAR WHEN: Today, Wednesday, July 25, 2012 WHERE: CNBC’s “Fast Money” Following is the unofficial transcript of breaking news from CNBC’s Kate Kelly. Following is the link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000105355 All references must be sourced to CNBC.
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KATE KELLY: MORGAN STANLEY IS IN ADVANCED TALKS I’M TOLD WITH THE QATAR INVESTMENT AUTHORITY ABOUT A MINORITY POSITION IN THE MORGAN STANLEY COMMODITIES BUSINESS. NUMBERING ABOUT 15 PERCENT IS WHAT I’M TOLD. A 15 PERCENT STAKE IN MORGAN STANLEY COMMODITIES. I DON’T KNOW EXACTLY WHAT THE PRICE TERMS WOULD BE, BUT IF YOU FIGURE ON THAT DIVISION BEING WORTH SOMEWHERE IN THE NEIGHBORHOOD OF FIVE BILLION DOLLARS. THAT’S KIND OF LOOKING AT THEIR REVENUE PUTTING A BIT OF A PREMIUM ON IT. THIS COULD BE A DEAL THAT NUMBERS ABOUT A BILLION DOLLARS GIVE OR TAKE AND IT COULD BE A CASH INFUSION FOR MORGAN STANLEY AT A VERY CONVENIENT TIME. OTHER ISSUES SWIRLING AROUND THEIR COMMODITIES BUSINESS OF COURSE ARE NEW REGULATION TO WHICH YOU GUYS JUST ELUDED, THE VOLCKER RULE COULD MAKE THE COMMODITIES TRADING BUSINESS A LOT MORE CUMBERSOME, DIFFICULT TO DO IT AS THEY HAVE HISTORICALLY HAVE DONE IT. ANOTHER QUESTION OUT THERE ON THE REGULATORY FRONT IS CAN THEY CONTINUE TO HOLD PHYSICAL ASSETS THAT THEY HAVE INCLUDING TRANSMONTAIGNE, WHICH IS A BIG OIL TERMINALLING BUSINESS THAT MORGAN STANLEY OWNS. THAT IS MORE OF A GRAMM LEACH BLILEY ISSUE, BUT MOVING ON. TALENT RETENTION. ANOTHER FACTOR. APPARENTLY, A LOT OF TRADERS ON WALL STREET ARE GETTING RESTED WHEN THEY THINK ABOUT COMPENSATION, NEW REGULATIONS AND THE LANDSCAPE THAT THEY ARE LOOKING AT AND THE FUTURE . MORGAN STANLEY BEING NO EXCEPTION. THESE ARE SOME ISSUES I’M TOLD THAT BOTH SIDES ARE TALKING ABOUT AS THEY HAMMER OUT THE DETAILS OF THIS VERY LIKELY INVESTMENT BY THE QATAR SOVEREIGN WEALTH FUND IN MORGAN STANLEY. A DEAL COULD BE CLOSE, BUT WE DON’T KNOW – IT HASN’T BEEN FINALIZED YET, MELISSA. SO I’M STILL TRYING TO TRACK DOWN THE DETAILS AND KIND OF SEE HOW THINGS PLAY OUT.