Morgan Stanley weighing possible merger: report Wednesday September 17, 7:40 am ET SINGAPORE (Reuters) - Investment bank Morgan Stanley (NYSE:MS - News) is weighing whether it should remain independent or merge with a bank, given the recent turbulence in the company's share price, broadcaster CNBC reported on Wednesday. Morgan Stanley officials were not in merger talks as of late Tuesday, CNBC said, citing unnamed people close to the matter. "But senior people at Morgan concede that further zig-zags in the company's stock price could and possibly will force the company to change course and seek a merger partner, probably a well capitalized bank," CNBC reported on its Website. Morgan Stanley shares closed down 10.8 percent at $28.70 on Tuesday, having fallen 46 percent so far this year. Morgan Stanley officials in Hong Kong declined to comment on the report. In an interview with Reuters on Tuesday, Morgan Stanley's Chief Financial Officer Colm Kelleher said the No. 2 U.S. investment bank remains confident in its broker-dealer model and dismissed the need to merge with a deposit-taking bank, even as he maintained a cautious stance about the markets. Traders in Asian said the report weighed on share markets, which pared early gains made on the U.S. government rescue of troubled insurer AIG (NYSE:AIG - News). "The U.S. government's rescue of AIG helped the markets to avoid the worst case scenario, but the fact that only the government was willing to help indicated the gravity of U.S. credit problems," said Choi Seong-lak, an analyst at SK Securities in Seoul. "Reports that Morgan Stanley is considering a merger with a commercial bank confirmed such fears, and market participants are now wondering if even Goldman Sachs (NYSE:GS - News) is safe. Sentiment is extremely fragile. Japan's Nikkei average (Osaka:^N225 - News) was up 1.3 percent, while MSCI's index of stocks elsewhere in the Asia-Pacific region was up 0.4 percent, having been up as much as 2.9 percent earlier in the session. (Reporting by Lincoln Feast and Park Jung-youn in SEOUL