Offloading a 34 per cent stake in the number one securities firm of one of the world’s fastest-growing securities markets hardly looks like one of the great decisions in the history of investment banking. Yet Morgan Stanley’s exit from China International Capital Corp, which may be confirmed soon, is the sensible thing to do.

This 15 year-old relationship – China’s first foreign securities joint venture – ran its course a long time ago. By the time of China Mobile’s $4.2bn debut in Hong Kong in October 1997, in which CICC acted as global co-ordinator, joint bookrunner and joint lead underwriter, the Beijing-based firm – majority-owned by the investment arm of CIC, the sovereign wealth fund – had sucked out know-how on staging big offerings. In 2000, Morgan Stanley ceded management control; two years later, as Levin Zhu – son of the former prime minister, Zhu Rongji – was anointed chief executive, it was clear that differences over compensation, management and strategy had become irreconcilable.

Morgan Stanley’s new partner – the small, Shenzhen-based outfit, China Fortune Securities – looks a more promising match. On the understanding that the premium underwriting mandates for state-owned enterprises will accrue to the likes of CICC and Citic – combined, the pair has about a fifth of equities and a quarter of bonds – it makes sense to aim a few notches lower. ChiNext, the start-up board, and Shenzhen’s six-year-old board for small and medium-sized companies, have dominated first-time sales this year. A toehold in China is still utterly essential: fees for debt and equity issuance account for 36 per cent of Asia’s total so far this year, according to Thomson Reuters, up from 12 per cent five years ago. But having been first movers, the recent years have left Morgan Stanley behind their biggest international rivals in China; they will need to hurry to make up for lost time.