Merrill Lynch CEO Stan O'Neal remains bullish on Japan | Print |

July 2006 --
By Steven K. Lee, Vice President of Employee Communications, Merrill Lynch


When a hedge fund client asked Stan O'Neal, chairman and CEO of Merrill Lynch, for an investment prediction last year, he cited Japan as a strong bet. Mr. O'Neal reiterated that prediction this year to the same client and at an employee town hall on May 24 in Tokyo.

"I'm even more bullish about Japan than I was then," Mr. O'Neal said.

Over the last two years, Merrill Lynch continued to invest in the region, increasing headcount by approximately 200 to 1,400 since December 2003. Mr. O'Neal said the new hires were primarily in commercial real estate, currency trading, structured products, hedge fund support, principal investing and structured finance.

Merrill Lynch also opened the doors of a new private banking firm on May 1, its joint venture with Mitsubishi UFJ. Mr. O'Neal explained that Mitsubishi UFJ Merrill Lynch PB Securities (MUML-PB) represents "an outstanding opportunity for us to accelerate growth in our private wealth management business."

Surveying Japan's economic landscape, Mr. O'Neal highlighted important changes in recent years that have improved the business environment for Merrill Lynch. He cited proactive banks "dealing with non-performing loan issues and cleaning up balance sheets" as well as "a change in mindset" toward an investment strategy that matches capital to fundamental risk and reward rather than relationships. The implications for this reform are felt through the whole Japanese economy, according to Mr. O'Neal, creating efficient, rational and developed capital markets

"These are things that we recognize," Mr. O'Neal said. "This is where our expertise is, and this is all good news for Merrill Lynch."

Mr. O'Neal also discussed the firm's "new philosophy" in investing in joint ventures such as the one with Mitsubishi UFJ. He described another joint venture, MLIM's combination with BlackRock, as an example of creating an entity with the potential for a higher growth rate than what was possible by the two businesses on their own. "We will be able to create value more rapidly than had we not done this transaction," he
said.

"It's a great time to be Merrill Lynch, a great time to be Merrill Lynch in Asia and a great time to be Merrill Lynch in Japan," Mr. O'Neal concluded. "We're going to take full advantage of that."



This article is reprinted from the Merrill Lynch WorldNet website and was provided by Jason Tani, Asst. Vice President of Merrill Lynch Global Private Client Group.