a leveraged investment opportunity

Transcription

1 capped booster note on msci golden dragon index For distribution in Switzerland only

2 a leveraged investment opportunity The Capped Booster Notes offer: Exposure to the China, Hong Kong and Taiwan equity markets via the MSCI Golden Dragon Index Leveraged upside exposure to the Index, up to a predefined cap 1:1 downside exposure (no capital protection) 3-year, euro-denominated investment

3 china: driving a global rebound? The Chinese economy appears to have been one of the most resilient to global recession, thanks to fiscal and monetary policy and strong domestic demand. The IMF has recently predicted growth of 9% for China in 2010, higher than previously forecast, and suggested that China and other Asian economies are driving the global rebound*. Taiwan is also well placed to benefit from China growth, with plans to relax restrictions of outbound and inbound investments both to and from China by the end of Investors can access the potential of equity markets in China (including Hong Kong) and neighbouring Taiwan via our Capped Booster Notes. * Source: IMF World Economic Outlook, October 2009

4 following the golden dragon The Note offers a return linked to the MSCI Golden Dragon Index. This index covers a broad range of stocks from Hong Kong, China and Taiwan. MSCI Golden Dragon Index, Country Breakdown as at 05/10/2009 Hong Kong - 36% China - 32% Taiwan - 32% Source: Bloomberg

5 boost your return potential The payout at maturity depends on the performance of the index, measured as the percentage change over the 3-year investment term. There are two possible scenarios: If the index performance is positive You receive 100% of your initial investment, plus 1.15 times the index performance, up to a maximum redemption amount of 180%. For example, if the index has positive performance of 10% at maturity, you receive 111.5% of par (100% plus 1.15 x 10%). If the index performance is negative Your capital is at risk. The final redemption amount reflects the performance of the index on a 1:1 basis. For example, if the index falls by 30%, the note redeems at 70% of par, a loss of 30% of your initial invstment. final redemption amount (% of par) 180% 100% 0% 0% Booster Note Index Performance index performance

6 investment considerations Capital is not protected. The final redemption amount depends on the performance of the Index and could be zero Investors do not benefit from any performance of the index over the cap level The payout described is provided at maturity only. If the notes are sold prior to maturity, or redeemed by the Issuer for reasons stated in the Offering Documents, the proceeds may be less than the initial investment. On a sale of the notes investors may also be subject to transaction costs including a bid-offer spread Investors are exposed to the credit risk of the issuer. Although the notes are designed to provide the returns described, payments depend on the ability of the Issuer to meet its financial obligations Since the notes are denominated in EUR, there is currency risk for Swiss franc investors About The MSCI Golden Dragon Index The MSCI Golden Dragon Index is the exclusive property of MSCI Barra ( MSCI ). MSCI and the MSCI index names are service mark(s) of MSCI or its affiliates and have been licensed for use for certain purposes by Morgan Stanley. The financial securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such financial securities.

7 important information Investment decisions should only be made on the basis of the information in the base prospectus and final terms for the product including the risk factors (the Offering Documents ), which is the only binding document and the terms of which will supersede the terms herein This information is not an offer or a solicitation to buy or sell the product and has been prepared solely for information purposes. Investors bear the issuer s credit risk. Accordingly, the value of the Notes is dependent not only on the performance of the underlying index but, among others, also on the creditworthiness of the issuer which may vary over the term of the Notes. The product and this marketing communication may only be offered, sold or published in jurisdictions in which such offer, sale or publication is permitted. The product may not be offered, sold or transferred in the United States to, or for the account or benefit of, any U.S. Person (as defined in Regulation S under the Securities Act 1933). This communication is not directed to persons in the UK. No representation or warranty is given with respect to the accuracy or completeness of the information herein. Morgan Stanley does not give investment, tax, or other advice; prospective investors should consult their own professional advisors. This communication is not a product of Morgan Stanley s Research Department and should not be regarded as a research recommendation. The Notes are not collective investment schemes as per the Swiss Federal Act on Collective Investment Schemes ( CISA ). Accordingly, holders of the notes do not benefit from the investor protection under the CISA or the approval or supervision by Swiss Financial Market Supervisory Authority (FINMA). The base prospectus and a simplified prospectus will be available on 14 October 2009 and can be obtained free of charge from Bank Morgan Stanley AG, Bahnhofstrasse 92, CH-8021 Zurich, Switzerland and on the website This information is not an issue prospectus as that term is understood pursuant to article 652a or article 1156 of the Swiss Federal Code of Obligations and, according to article 5 paragraph 4 CISA, the prospectus requirement is therefore not applicable. The product is not a bank deposit and is not insured by the US Federal Deposit Insurance Corporation or any other governmental agency, nor is it an obligation of, or guaranteed by, a bank Morgan Stanley. All rights reserved.

8 key terms Issuer: Morgan Stanley Issuer Rating: A (S&P) Issue Price: 100% Issue Date: 4 November 2009 Maturity Date: 5 November 2012 Subscription Period: 14 October 2009 to 28 October 2009 (The Issuer reserves the right to cancel the issue at any time during the subscription period. This will include cancellation of existing orders) Underlying Index: MSCI Golden Dragon Index Denomination (Par): EUR 1,000 Listing: SCOACH ISIN: XS Valoren: MOST INNOVATIVE IN RETAIL STRUCTURED PRODUCTS MOST INNOVATIVE TEAM OF THE YEAR MORGAN STANLEY & CO INTERNATIONAL PLC 25 CABOT SQUARE CANARY WHARF LONDON E14 4QA INFO@MORGANSTANLEYIQ.COM IQ Oct. 2009