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Morgan Stanley's MSCI Rockets Higher in Debut

Reuters
Thursday, 15 Nov 2007 | 12:56 PM ET

Investment analysis firm MSCI, which is being spun off by Morgan Stanley, soared in its stock market debut on Thursday, a day after raising $252 million with an initial public offering that priced at the top of expectations.

MSCI shares were up more than 46 percent on the New York Stock Exchange.

MSCI IPO
Ringing the opening bell to celebrate MSCI's IPO, with Henry Fernandez, MSCI president/CEO and CNBC's Mark Haines

On Wednesday, the 14 million share offering sold for $18, compared with a forecast range of $16 to $18, which had been raised from an earlier range of $14 to $16, according to an underwriter.

The company, which manages thousands of market indexes, said it will use proceeds of the offering to pay down debt, and launched the IPO to enable it to grow faster.

"Ultimately, we're separating from Morgan Stanley. It will let us grow faster, allow us more flexibility to grow organically and to do some acquisitions," said MSCI Chief Executive Henry Fernandez, in a CNBC interview on Thursday.

MSCI expects to grow by creating new indexes for emerging markets, and from development in its fastest growing area, the use of its indexes by exchange traded funds (ETFs) and investment funds, Fernandez added.

Formerly known as Morgan Stanley Capital International, MSCI manages market indexes that form the basis for investment funds and derivatives. It also sells Barra risk management tools for portfolio managers.

Morgan Stanley will own 96.6 percent of MSCI's Class B stock, which has greater voting rights, following the offering, and retain a roughly 82.8 percent economic stake, according to an amended prospectus with the U.S. Securities and Exchange Commission.

Underwriters, led by Morgan Stanley, have the option to purchase an additional 2.1 million shares.

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