BUZZ-ICAP: Morgan Stanley Cuts to "underweight"

(repeats from overnight, no changes to text)

** ICAP (LSE: IAP.L - news) threatening to hit a 6-month low at the open on Wednesday after Morgan Stanley (Xetra: 885836 - news) downgrades to "underweight" from "equalweight"

** Sees (Shanghai: 600481.SS - news) ongoing structural challenges for voice broking revenues, says valuations still appear stretched despite a 12 pct fall in shares since late-May

** Fwd P/E of 16x a 30 pct premium to 10-year average of 12.3x

** Stock set to break 200-day SMA for first time since Nov 2014

** Diversified financials sector had a disproportionate number of stocks with elevated target prices v share price in mid-April [ID: nL4N0XK47Z]

** Downgrades have seen the spread between mean TP and share prices narrow significantly in most names, though Man Group (LSE: EMG.L - news) share price still 18 pct above the mean TP

(RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)