Morgan Stanley Chief Executive Officer John Mack said his firm’s falling ranking in fees from advising on mergers and acquisitions is no cause for concern.

“To draw any conclusions of a trend would be a mistake,” Mack said in response to questions from Bloomberg at a press conference today in Dubai, United Arab Emirates.

Morgan Stanley ranked second among financial advisers to global mergers and acquisitions in the fourth quarter with 79 announced transactions worth about $218 billion. So far in 2006, the world’s third-largest securities firm by market value has dropped to seventh place with 59 transactions worth about $190 billion, according to Bloomberg data.

Mr. Mack said the current rankings are skewed by the March 5 purchase of BellSouth Corporation by AT&T Incorporated for about $83 billion including stock and debt. “If you take that megadeal out, the table looks very different,” he said.

Evercore Partners, Lehman Brothers Holdings Incorporated and Rohatyn Associates advised AT&T on the transaction. Citigroup and Goldman Sachs Group advised BellSouth.

Morgan Stanley is cutting research jobs in America and Western Europe so it can invest more in Asia and Eastern Europe, according to a memo sent to staff on March 22. The firm intends to eliminate 50 to 60 positions, or about 7% of its 800 equity research jobs, people familiar with the plan said.

Mr. Mack, 61, took over at the secondbiggest trader on Wall Street in June and has since fired more than 1,000 brokers and two dozen senior bankers as he works to deliver on his November pledge to double Morgan Stanley’s profit in five years.

The second-biggest trader on Wall Street, Morgan Stanley reported a 17% jump in first-quarter earnings last week as revenue from buying and selling stocks, bonds and commodities overcame a decline in the firm’s brokerage unit.

Net income in the three months ended February 28 climbed to $1.64 billion, or $1.54 a share, from $1.4 billion, or $1.29, a year earlier.The profit, Morgan Stanley’s second-best ever, exceeded the highest analyst estimate.

Still, the New York-based firm failed to match Goldman Sachs Group Incorporated, Lehman Brothers Holdings Incorporated, and Bear Stearns, which reported record earnings. Mr. Mack said in the earnings statement on March 22 that “we see substantial opportunities to further improve our performance.”

The results underscored a divide at Morgan Stanley that has widened since Dean Witter, Discover & Company bought the firm in 1997. While the investment bank kept pace with rivals such as Goldman, the brokerage for individual investors that Morgan Stanley inherited from Dean Witter fell further behind Merrill Lynch & Company and Citigroup Incorporated’s Smith Barney.