Friday, April 16, 2010

Morgan Stanley (NYSE:MS) to Spin Off Japan Commodities Unit

Morgan Stanley Spinning Off Japan Commodity Trading Company

There will be a new commodities trading company operating under the Morgan Stanley (NYSE:MS) umbrella, as Morgan Stanley Japan Securities Co will be spun off on May 1.

Although being spun off, it'll operate as a wholly owned subsidiary of Morgan Stanley.

The purpose of the new unit will be to take care of business of Japanese companies in areas of sales in the manufacturing, shipping and trading sectors.

With commodities expected to continue their bull run based on Chinese demand, the inevitable price movements related to commodities are normally hedged by companies using derivatives trading as their chosen vehicle.

Japanese companies are expected to increase their derivatives trading to hedge commodity price movements, the reason Morgan Stanley is spinning off the company.

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