China Investment Corp, the country's sovereign wealth fund, said it is buying into a US$2.2 billion common stock offering by Morgan Stanley because it is confident in the Wall Street bank's prospects.

CIC is buying 44.7 million shares of the 80.2 million shares being offered for US$1.2 billion, raising its stake in Morgan Stanley back to about 9.86 percent.

That was the size of the original stake CIC took in Morgan Stanley in 2007 for US$5.6 billion. It was subsequently diluted to about US7.68 percent when Morgan Stanley sold stock to Mitsubishi UFJ Financial Group Inc last October.

"Morgan Stanley is widely expected to be able to leverage on its strengthened financial position and will be on the road of resuming its successful trajectory amid the dramatic restructuring of the international financial services industry," CIC said in a statement on its website, www.china-inv.cn.

Morgan Stanley said the proceeds of the offering, priced yesterdayon Tuesday at US$27.44 a share, would bring it closer to repaying US$10 billion it borrowed under the US Treasury's Troubled Asset Relief Programme.

It said Mitsubishi UFJ would buy 16 million of the new shares.