Morgan Stanley beats estimates on higher trading revenue

Morgan Stanley’s profit was driven by gains in its fixed income and equities trading businesses. Above, the bank’s London headquarters at Canary Wharf. (Reuters)
Updated 18 July 2018
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Morgan Stanley beats estimates on higher trading revenue

  • Morgan Stanley said net income rose to $2.4 billion in the quarter from $1.8 billion a year ago
  • Banks are benefiting from increased market volatility due in part to escalating trade tensions

NEW YORK: Morgan Stanley reported a better-than-expected quarterly profit on Wednesday, driven by gains in its fixed income and equities trading businesses, rounding up a strong earnings season for US banks.
JPMorgan Chase & Co, Bank of America Corp, Goldman Sachs Group Inc, Morgan Stanley and Citigroup Inc. have all reported second-quarter earnings which beat expectations, with only Wells Fargo & Co. missing estimates.
Banks are benefiting from increased market volatility due in part to escalating trade tensions causing investors to buy and sell assets to protect their portfolios and take advantage of opportunities. Morgan Stanley highlighted its equity financing business and a stronger performance in commodities and credit products.
Morgan Stanley said net income rose to $2.4 billion in the quarter from $1.8 billion a year ago. Earnings per share rose to $1.30 from $0.87 the year before, beating the average analyst expectation of $1.11 per share, according to Thomson Reuters I/B/E/S data.
Shares in Morgan Stanley were up 2.9 percent in premarket trading.
Chief Executive Officer James Gorman said the bank had seen strength across all its businesses and geographies.
“The second quarter performance reflected active markets and healthy client engagement,” he said in a statement.
Net revenue from the bank’s sales and trading business rose 18 percent to $3.8 billion, with fixed income and equity trading businesses recording gains of 12 percent and 15 percent.
Rival Goldman Sachs said on Tuesday its trading revenue rose 17 percent, with bond trading showing a 45 percent jump and equity revenue remaining flat in its second quarter.
Morgan Stanley’s net revenue rose 12 percent to $10.6 billion, with institutional securities accounting for 54 percent of the gains. Institutional securities business comprises the bank’s investment banking and trading units.
The bank said net revenue at its wealth management business rose to $4.3 billion from $4.2 billion a year ago.


Multibillion-dollar deals expected as investment forum looks east

Participants watch a movie highlighting the Red Sea project at last year’s Future Investment Initiatives conference in Riyadh. (AFP)
Updated 23 October 2018
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Multibillion-dollar deals expected as investment forum looks east

  • The Future Investment Initiative is tipped to see big investment partnerships from Russia and China
  • The FII is a key event in showcasing Saudi Arabia’s investment opportunities and economy, and linking foreign and local businessmen

RIYADH: A major investment show in Saudi Arabia is expected to attract thousands of delegates and see deals worth hundreds of billions of dollars — despite several largely “symbolic” last-minute cancelations by speakers.

The Future Investment Initiative, which starts on Tuesday, is tipped to see big investment partnerships from Russia and China, despite several executives, mostly Western, pulling out after the killing of Saudi journalist Jamal Khashoggi.

Many of those Western firms have however sent lower-level representatives or regional heads — with big business likely to be done, Saudi officials said.

Speakers from the Russian Direct Investment Fund, Russia-China Investment Fund and electronics giant Samsung are all billed to speak at the event. They join Saudi speakers including Energy Minister Khalid Al-Falih, Yasir Al-Rumayyan, head of the Public Investment Fund (PIF), and sports official Princess Reema bint Bandar. 

“Investing in transformation,” “technology as opportunity” and “advancing human potential” are among the FII’s themes. Held at the Ritz-Carlton hotel in Riyadh, the three-day event is billed as a “blueprint for the 22nd century.”

Ellen Wald, president of the Transversal Consulting think-tank and author of the recent book “Saudi Inc,” said many executives — notably those from Russia and further east — were still looking to do business at the event despite some having pulled out.

“I think the big pull-out of CEOs is not really reflective of the corporate interest in the Kingdom because we see them sending their next level of executives along. So to some degree it is symbolic,” she told Arab News. “In terms of attracting foreign investment, Saudi Arabia could have strategic leverage with Russia and China, and a unique opportunity to work on cutting-edge technologies.”

John Sfakianakis, director of economic research at the Gulf Research Center in Saudi Arabia, said he expected the event to be a success. 

“The FII is a key event in showcasing Saudi Arabia’s investment opportunities and economy, and linking foreign and local businessmen,” he told Arab News.