Asia Overview

September 23, 2005

Notice

The information provided herein may include certain non-GAAP financial measures. The reconciliation of such
measures to the comparable GAAP figures are included in the Company’s Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on 8-K, including any amendments thereto, which are available on
www.morganstanley.com.

This presentation may contain forward-looking statements. You are cautioned not to place undue reliance on forward-
looking statements, which speak only as of the date on which they are made, which reflect management’s current
estimates, projections, expectations or beliefs and which are subject to risks and uncertainties that may cause actual
results to differ materially. In particular, the Company’s ability to effect a sale of the Company’s aircraft leasing
business, to realize the full extent of cost savings or benefits from such sale and to assure that subsequent
developments (including the ultimate structure, pricing and timing of the transaction) do not cause actual charges to
exceed the currently estimated charges to be incurred in the transaction may cause actual results to differ materially
from the Company’s current estimates, projections, expectations or beliefs. In addition, the future performance of
Discover Financial Services is subject to numerous risks impacting the credit card industry that may cause actual results
to differ materially from the Company’s current estimates, projections and beliefs, including: rising cost of funds
pressuring spreads; slow industry growth with rising payment rates; future loan loss rate uncertainty, especially given
bankruptcy reform and changing minimum payment requirements; and a consolidating industry with competitive
pressures and increasing marketing constraints. For a discussion of additional risks and uncertainties that may affect
the future results of the Company, please see “Forward-Looking Statements” immediately preceding Part I, Item 1,
“Competition” and “Regulation” in Part I, Item 1 and “Certain Factors Affecting Results of Operations” in Part II, Item 7 of
the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2004 and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Quarterly Reports on Form
10-Q for the quarterly periods ended February 28, 2005 and May 31, 2005 and in other items throughout the Form 10-K
and Forms 10-Q.

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 1
Morgan Stanley in Asia

Number of Regional Offices

Asia Pacific: 11
Tokyo

Beijing
Osaka Japan: 2
Seoul

Shanghai
Delhi Taipei Joint Ventures
Hong Kong China - China International
Mumbai
Capital Corporation Ltd.
Bangkok India - JM Morgan Stanley

Singapore

Sydney

Melbourne

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 2
Our Asian Business

Full Line of Financial Services

Morgan Stanley

Individual
Investment Institutional
Investor
Management Securities
Group

Private
Equity Fixed Investment Private Wealth
Equity
Research Income Banking Equity Mgmt

Global Capital Markets Mergers,

Securitized Banking Real Estate
Product Acquisitions and
Equity Capital Debt Capital Team Group
Group Restructuring
Markets Markets
Institutional Securities Joint Ventures Investment Banking Division

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 3
2005YTD Notable Transactions
M&A
• Mitsubishi Tokyo Financial Group (Japan) $41.4Bn merger with UFJ Holdings (Japan)
• Astellas Pharma (Japan) $7.1Bn merger with Fujisawa Pharmaceutical (Japan)
• Bank of America (U.S.) $2.5Bn and Temasek (Singapore) $1.4Bn strategic investment in China
Construction Bank (China)
• International Power (U.K) and Mitsui (Japan) $2.0Bn acquisition of Edison Mission Energy’s
international generation portfolio (U.S.)
• SinoPac Financial Holdings (Taiwan) $1.5Bn acquisition of International Bank of Taipei (Taiwan)

Equity
• Shinsei Bank $2.9Bn follow-on offering (Japan)
• Chunghwa Telecom $2.3Bn secondary offering (Taiwan)
• LG Philips LCD $2.2Bn follow-on offering (South Korea)
• Ripplewood Holdings US$1.1.Bn IPO (Japan)

Debt
• Bank of Tokyo Mitsubishi US$300MM + Euro300MM International Sub Debt (Japan)
• Japan Finance Corp for Municipalities JPY40Bn agency bond
• Titan Petrochemical US$400MM high yield bond offering (Hong Kong)
• Mandra Forestry Finance US$195MM high yield bond offering (China)
This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 4
Morgan Stanley’s Market Position

Asia Pacific Market Share 2005YTD Euromoney 2005

Best M&A House in Asia (incl. Japan)
Morgan Stanley Best M&A House in China, Japan &
Share Rank South Korea

M&A (1) 14% 4 The Asset’s Triple A Awards 2004

Best Investment Bank
Equity & Equity-Linked (2) 5% 6 Best M&A House

Debt (2) 2% 10 FinanceAsia 2004

Best Investment Bank
Japan Market Share 2005YTD Best M&A House
Best Financial Institutions House
Morgan Stanley Morgan Stanley Best General Industries House
(Incl. domestic banks) (excl. domestic banks) 2004
Best Tech House
Share Rank Share Rank
Asiamoney’s 2004
M&A (3) 34% 4 18% 2 Japan IPO Deal of the Year
- Shinsei Bank JPY250Bn IPO
Equity & Equity-Linked (4) 4% 6 15% 2
The Banker 2004
Debt (5) 2% 9 14% 3 Deals of the Year (Global)
Best Country Deal – Japan: MTFG
Notes: 1) Source: Thomson Financial. Any party in Asia Pacific excluding Japan. Announced Deals over US$100MM
2) Source: Bondware. Asia Pacific excluding Japan. Equal apportionment to bookrunners. Deals over US$50MM Thomson DealWatch 2004
3) Source: Thomson Financial. Any Japanese involvement where target, acquiror or ultimate parent is Japan
excluding equity carveouts, withdrawn deals, open market repurchase and exchange offer. Data as of 2005/8/30 Equity-linked Bond Issuer of the Year (Japan)
4) Source: Equityware. All equity and equity linked products including domestic deals by Japanese issuers. Data as
of 2005/8/30 Equity-linked Bond Overseas Deal of the Year
5) Source: IN Database. All domestic straight bond deals excluding convertibles and including samurais and zaito
agency bonds. Data as of 2005/8/30 (Japan)
This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 5
Asian Net Revenue Trends

Morgan Stanley Asian Net Revenues vs.

MSCI Asia Pacific Index Performance

Net Revenues MSCI Closing

($MM) Value (1)

2,500 120

2,000 100

80
1,500
60
1,000
40
500 20
0 0
1998 1999 2000 2001 2002 2003 2004

Asia MSCI Asia Pacific

Source: Morgan Stanley 10-K filings, MSCI

Notes: (1) Average monthly closing value

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 6
Asian Net Revenues and PBT
1998 and 2004

Global and Asian Net Revenues

1998 2004

Asia
6%
Asia
8%

Global Net Revenues $16.1Bn Global Net Revenues $23.7Bn

Asian Net Revenues $1Bn Asian Net Revenues $2Bn

Global and Asian PBT (1)

1998 2004

Asia
5%
Asia
10%

Global PBT $5.4Bn Global PBT $6.8Bn

Asian PBT $0.3Bn Asian PBT $0.6Bn
Source: Morgan Stanley 10K Filings
Note: (1) Income from continuing operations before losses from unconsolidated investees, income taxes, dividends on preferred securities subject to mandatory redemption and discontinued
operations.

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 7
Size Matters

Key Statistics Asia Pacific(1) Japan China US EU-25

Population (MM) 1,560 127 1,300 293 453

Area (000‘s Km²) 13,031 378 9,573 9,631 3,973

GDP ($Bn) 3,161 4,718 1,649 11,995 12,262

GDP Growth (%) 6.1 2.7 9.5 4.4 2.2

Inflation (%) 3.2 -0.1 3.9 2.7 2.0

Unemployment (%) 9.3 4.4 4.2 5.1 9.0

Source: CEIC Data, Eurostat, Morgan Stanley Research. All figures are 2004 economic data
Note: (1) Asia Pacific consists of Australia, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 8
Market Size
AP Equity and Equity-Linked
AP Announced M&A Volume (1) Issuance Volume (2) AP Fixed Income Issuance Volume (2)
(US$Bn) (US$Bn) (US$Bn)
172 68 49
140 43
121 116 52
46
30
28 23

2002 2003 2004 2005YTD 2002 2003 2004 2005YTD 2002 2003 2004 2005YTD

Japan Equity and Equity-Linked Japan Fixed Income

Japan Announced M&A Volume (1) Issuance Volume (3) Issuance Volume (4)
(US$Bn) (US$Bn) (US$Bn)
140 135 55 84 88 86

91 62
70 30 28
18

2002 2003 2004 2005YTD 2002 2003 2004 2005YTD 2002 2003 2004 2005YTD

Notes: (1) Source: Thomson Financial. Announced deals (As of 9/1/05)

(2) Source: Bondware. Asia Pacific excluding Japan. Deals over US$50MM (As of 9/1/05)
(3) Source: Equityware. All equity and equity linked products including domestic deals by Japanese issuers over US$50MM (As of 9/1/05)
(4) Source: IN Database. All domestic straight bond deals over US$50MM excluding convertibles and including samurais and zaito agency bonds. Average annual exchange rates used to convert annual
volume from JPY to USD (JPY114.5 as of 2005/08/30).

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 9
Secular Drivers

Secular Drivers Morgan Stanley Strengths

• Economic growth • Proven Investment Banking

• China catalyst track record in region
• Globalization • Stable and integrated franchise
• Aging population • Long term client relationships
• Privatization • Product capability and distribution
• Consolidation • Global expertise and support
• Bank and corporate reform
• Real estate disposition
• Institutional flows

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 10
Asia Strategy

• #1: Primarily organic growth

• #2: Platform

• #3: Long-term growth opportunities

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 11
China

CICC Morgan Stanley

• Sales & Trading • Institutional Equity Sales

• Investment Banking • Research
• Research • Fixed Income Sales
• Asset Management • Commodities
• Beijing, Shanghai, Hong Kong • Real Estate, Capital Markets, M&A
• Asset Management
• Private Equity

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 12
China: An Open Economy

Foreign Invested Enterprises

Foreign Direct Investment to China Contribution to China Exports
US$Bn US$Bn

70
61 700
60
53 54 600
50 45 47
500
42 41
40 38
400

30 300

20 200

10 100

0
0

1998

1999

2000

2001

2002

2003

2004

Aug05YTD
Aug05YTD
1996

1997

2000

2001

2002

2003

2004

Total Exports FIE Contributions

Source: CEIC Data, Morgan Stanley Research Source: CEIC Data, Morgan Stanley Research

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 13
China: Growth Opportunities
Market Capitalization / GDP 2004 China Debt Market Issuance
% US$Bn
80
150 136 133
60

100 79 73
58 40

50 30
20

0 0
China Taiwan USA Japan W. Korea 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Europe Treasury Bond Policy Financial Corporate Bond
Source: CEIC Data Source: CEIC Data

Growth in Key Consumer Finance Products China Wealth Market Distribution 2003
1997-2004 CAGR % %
45 39.3 China Total AUM:
Consumer Loans US$1,268Bn
30
Mortgage Loans
21.7
15.5
Bank Card 15 11.0 11.6
Transactions
0.2 0.6
Credit Card Issued 0
US$MM <0.1 0.1–0.25 0.25–1 1–5 5–20 20–100 >100
0% 20% 40% 60% 80% 100%
Source: CEIC Data Source: Boston Consulting Group Global Wealth Report IV (2004)

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 14
Conclusion

• Asia considered THE growth area by our clients and our competitors

• Good track record of revenue and profit growth

• Future plans balance need for investment with continued profit growth

This slide is part of a presentation by Morgan Stanley and is intended to be viewed as part of that presentation. The presentation is based on information generally available to
the public and does not contain any material, non-public information. No representation is made that it is accurate or complete. The presentation has been prepared solely for
informational purposes, is neither an offer to sell nor the solicitation of an offer to buy any security or instrument and has not been updated since it was originally presented. 15
Asia Overview

September 23, 2005