Investment banks struggle with aftermath

Goldman Sachs said it was counseling workers, as banks struggled to to deal with Tuesday's tragedy. Operations were reopening in Asia in line with markets

By CNN's Alex Frew McMillan

HONG KONG, China (CNN) -- Investment banks struggled to keep operations as normal as possible on Thursday.

The financial world was still reeling psychologically and practically from Tuesday's attacks on the world's financial hub.

Merrill Lynch, the biggest brokerage in the world, evacuated 9,000 staff from its headquarters near the World Trade Center in downtown Manhattan after Tuesday's attacks.

A spokesman in Hong Kong said the bank had no plans for them to return to its head office anytime soon, in the World Financial Center.

Merrill moved its headquarters from 1 Liberty Plaza in the mid-1980s, so it was not affected by any problems with that building.

Merrill's operations in Asia were operating as normal as possible, despite problems communicating with New York. It shifted New York duties to its backup office.

Initial public offerings likely off

Most American banks were expected to put deals like initial public offerings on hold, finding it hard to get necessary approvals from headquarters in New York.

The dire state of stock markets around the world also means this is not a good time to float stock. Asian markets were stabilizing on Thursday after a big hit on Wednesday.

Merrill went ahead with an investment conference on Chinese stocks in Shanghai. A spokesman said the bank thought "long and hard" about scrapping it. But it decided to continue because attendees had already traveled to China.

Salomon Smith Barney was also holding Asian conferences. But Credit Suisse First Boston postponed a technology conference in Taiwan.

Conferences cancelled out of respect

A spokesman in Hong Kong said the bank postponed it and a software conference in Palo, Alto, California, "out of respect for the victims and the loved ones in the attacks."

Given the disruption in air travel to and from the United States, it has also been hard for investors to make events. Several other conferences in Asia were cancelled.

Limited air service to the United States resumed Wednesday.

Mutual fund company Schroders Investment Management suspended dealing in around 10 percent of its mutual funds on Thursday.

Other fund companies made similar moves, unable to manage funds with exposure to the United States.

Schroders had suspended even more funds on Wednesday, because Asian markets such as Taiwan, Malaysia and Thailand were closed.

But Asian fund operations were fairly normal Thursday, with all Asian equity markets reopened.

Morgan Stanley tries to reassure clients

U.S. investment bank Morgan Stanley was the biggest tenant in the Twin Towers of the World Trade Center, taking up 22 floors in 2 World Trade Center.

It had 3,500 employees there, working on its retail brokerage accounts.

"Miraculously, it appears the vast majority got out safely," Chairman and CEO Philip Purcell said. They started to evacuate from 2 World Trade Center after the first plane hit 1 World Trade Center. But the company had no casualty count on Thursday.

The brokerage is scrambling to reassure its clients and the world that it is still functioning. Purcell told employees to man the phones and reassure customers.

There are fears banks and insurance companies will collapse, unable to handle the financial hit. Others lost vital records.

Though Morgan Stanley is tight-lipped about what records and functions may have been lost, it says it is very much still in business.

A spokesman in Hong Kong said it resumed business functions in Asia as and when markets reopened.

Investment bank Goldman Sachs was spared the worst disruption in New York, since its headquarters are further uptown in New York.

It is going ahead with a technology conference in Hong Kong on Monday.

But a spokeswoman in Hong Kong said the bank was counseling employees who had likely seen friends and relatives die, and who may have problems handling what they have witnessed.

It said it is coordinating with other investment banks to get business back to normal as soon as possible.

Markets were closed again Wednesday in New York. Stock markets are set to remain closed on Thursday, with trading resuming on Monday, or Friday at the outside.

But trading was due to resume with bonds on Thursday.

There were fears about liquidity in the bond market. Cantor Fitzgerald, a leading bond trading company, was headquartered in 1 World Trade Center.

Only 200 of its 1,000 employees there have so far been accounted for.