Morgan Stanley 1998 Annual Report Download - page 10

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MORGAN STANLEY DEAN WITTER *1998 ANNUAL REPORT
*FOURTEEN *
seek higher returns across national borders and diverse products, while issuers have
a much greater variety of financing sources.The great proliferation of products and
financial strategies has added a further layer of complexity. A third element of
complexity in financial services is the challenge posed by technology, which has
greatly accelerated the speed of transactions and created a much wider bandwidth
in the flow of information.
Since the world is unlikely to become a simpler place in the foreseeable future, we
believe the best response to ever-increasing complexity is continuous, relentless
innovation. For our firm, innovation and the application of new technology to
financial challenges have been hallmarks of our success.Whether in mergers and
acquisitions, the use of derivatives to hedge risk, new high-yield or asset-backed
securities, or making research and securities available to individual investors on the
Internet, we will continue to use the flexibility and intellectual capital of our people
to serve customers and create opportunities. Examples of continuing innovation this
past year include our underwritings for Amazon.com in the first-ever high yield
financing for an Internet retailer, the expansion of online services for our 2 million
individual investor clients and the successful launch of Discover Card’s high-speed
transaction report system for its merchant network.
Last year we
noted that in bringing together Morgan Stanley and Dean Witter in mid-1997, we
had anticipated a trend. Our merger was the first of the blockbuster combinations in
financial services.The wave of consolidation has continued.In 1998, M&A activity in
financial services reached $700 billion compared with $117 billion two years ago.We
believe that consolidation in our industry will continue, driven by customer needs.
Customers now want advice, products and liquidity across all geographic markets,
and they are turning to the global firms that can meet their needs.
PRODUCT RANGE AND SCOPE OF DISTRIBUTION ARE PRIZED ATTRIBUTES
98
97
96
13.5
figure 8
10.3
8.2
*Securities Data Company
U.S. HIGH-YIELD
DEBT OFFERINGS*
(market share in percent)
98
97
96
14.4
figure 9
4.8
1.2
*Securities Data Company
U.S. PUBLIC RETAIL
PREFERRED STOCK OFFERINGS*
(market share in percent)