09:48 <04917>,<04918>,<04921>&<04922> - Announcement (2) The payment and delivery obligations of the Issuer in relation to the Warrants will be unconditionally and irrevocably guaranteed by Morgan Stanley (the `Guarantor'). If, on any Expiry Date, the Cash Settlement Amount is more than zero, the Warrants will be automatically exercised (without any notice being given to the holders of the Warrants) and the Issuer will pay to the holders the Cash Settlement Amount calculated as described above. The implied volatility, gearing, effective gearing and premium of the Warrants are detailed below. These values may not be comparable to similar information provided by other issuers of derivative warrants as each issuer may use different pricing models. Warrants Implied Gearing Effective Premium Volatility Gearing Series A 20 per cent. 11.82X 7.61X 3.11 per cent. Series B 20 per cent. 9.39X 6.62X 2.43 per cent. Series C 20 per cent. 20.14X 8.27X 7.45 per cent. Series D 20 per cent. 13.19X 6.76X 5.76 per cent. The Warrants will constitute general unsecured contractual obligations of the Issuer and the Guarantor and no other person. Investors are relying upon the creditworthiness of the Issuer and the Guarantor and have no rights under the Warrants against the companies comprising the Index or HSI Services Limited (the `Index Compiler'). The obligations of the Manager are subject to termination on the occurrence of certain events, including force majeure, on or before the issue date of the Warrants, which is expected to be on or about May 10, 2005. The issue of the Warrants is conditional upon the Stock Exchange granting listing of, and permission to deal in, the Warrants. Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Warrants. The Issuer has been informed that consideration of such application will go through the normal application procedure pursuant to Chapter 15A of the Rules Governing The Listing of Securities on the Stock Exchange (the `Rules') and no guarantee that such approval will be granted can be given. The date of commencement of dealings is expected to be May 11, 2005. The Issuer is not regulated by any of the bodies referred to in Rule 15A.13(2) or (3) of the Rules. The Guarantor's senior long term debt is rated Aa3 by Moody's Investors Service, Inc., A+ by Standard and Poor's Ratings Group and AA- by Fitch IBCA Ltd. The Issuer has undertaken for each series of Warrants to make documents containing details of the Warrants and financial and other information on the Issuer available for inspection by holders of the Warrants. The documents available for inspection during the period that any structured products issued by the Issuer are listed on the Stock Exchange are a copy of the Base Listing Document dated on or about March 31, 2005, together with any addenda or successor to the Base Listing Document (both the English version and the Chinese translation) and the latest publicly available annual report and interim report (if any) of Morgan Stanley. The Supplemental Listing Document to be dated on or about May 10, 2005 (both the English version and the Chinese translation) will be available for inspection until the Expiry Date. These documents will be available for inspection at the office of Computershare Hong Kong Investor Services Limited, which is presently at Room 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong. Information on the Guarantor can also be found on the U.S. Securities and Exchange Commission's website, which is www.sec.gov, and the Guarantor's Investor Relations webpage at www.morganstanley.com/about/ir. Before purchasing the Warrants you should ensure that you fully understand their potential risks and rewards and independently determine that they are appropriate for you given your objectives, experience, financial and operational resources and other relevant circumstances. You should consult with such advisers as you deem necessary to assist you in making these determinations. Investors are warned that the price of the Warrants may fall in value as rapidly as it may rise and holders may sustain a total loss of their investment. Prospective purchasers should therefore ensure that they understand the nature of the Warrants and carefully study the risk factors set out in the Base Listing Document and the Supplemental Listing Document and, where necessary, seek professional advice before they invest in the Warrants. The Issuer and its appointed liquidity provider may be the only market participants in the Warrants and the secondary market for the Warrants may be limited. The Issuer has appointed, in respect of