Morgan Stanley Announces IPO of MSCI

New York —

Morgan Stanley (NYSE: MS) announced today its intention to sell a minority interest in its subsidiary, MSCI Inc., in an initial public offering of Class A common stock. The IPO is expected to be completed by the end of 2007, subject to market conditions and receipt of regulatory approval. MSCI will file a preliminary registration statement with the U.S. Securities and Exchange Commission later today.

MSCI is a provider of investment decision support tools to equity, fixed income and multi-asset class investment institutions worldwide. These tools include the MSCI indices and the Barra portfolio risk analytics.

Although no final decision has been made at this time, Morgan Stanley currently believes it would be beneficial to ultimately divest its remaining ownership interest in MSCI. However, that decision will be subject to market conditions and other factors.

John Mack, Chairman and CEO of Morgan Stanley, said, “The initial public offering and potential separation of MSCI are consistent with Morgan Stanley's strategy to focus our people, capital and resources on our core businesses, including institutional securities, asset management and global wealth management. We believe this transaction will unlock value for Morgan Stanley's shareholders as well as release capital to redeploy into our core activities.”

Morgan Stanley currently owns 96.6% of the outstanding shares of MSCI; Capital Group International Inc. owns the remainder of the shares.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 32 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Contact:

Media Relations, Mary Claire Delaney, +1.212.762.6880

Investor Relations, William Pike, +1.212.761.0008