Morgan Stanley prime broker woes seen lasting
NEW YORK Morgan Stanley survived the recent panic in financial markets, but its prime brokerage business may never fully recover.
TOKYO Daiwa House Industry Co (1925.T) said its real estate investment trust unit REIT.L had scrapped a $562 million (287 million pound) public offering due to weak investor demand, prolonging the IPO drought in Japan's struggling REIT market.
Japan's second-largest home builder had announced just last month that it would list Daiwa House REIT Investment Corp on June 19, raising about 60 billion yen in what would have been the first REIT public offering in Tokyo in eight months.
The decision to scrap the IPO comes as the global credit crisis muddies the outlook for Japan's property market. Tokyo's REIT index .TREIT has fallen about a quarter so far this year and has lost nearly half its value since a peak last May.
Kenchi Suzuki, a manager in Daiwa House's finance department, said the company was still assessing what impact the scrapped listing may have on its earnings forecasts and when and if it might eventually look to relaunch the IPO.
Nomura Securities, Nikko Citigroup and Morgan Stanley (MS.N) were managing the listing.
Only two REITs were listed in Japan last year, and several listings were cancelled, including one by insurer AIG (AIG.N).
Underscoring the tough industry environment, real estate developer Zephyr Co 8882.T announced last month that a unit based in the western Japanese city of Osaka went bankrupt due to difficulty raising funds.
In addition to fallout from the subprime loan crisis, Japan's property developers have been hobbled by the soaring prices of steel and other construction materials and a recent slide in housing starts stemming from stricter building codes.