May. 16, 2014, 7:13 AM
- “Demand for Samurai bonds among investors is strong,” says an analyst with Mizuho Securities. “The fact that Morgan Stanley (MS) hasn’t sold for a while was a big factor.”
- Morgan sold ¥150B ($1.5B) of yen-denominated notes, more than the ¥130B offering planned. The last time it sold such notes was in January 2008.
- The Samurai market nearly dragged to a halt in Q1 last year, with just ¥60B sold in total. About ¥948B of the paper has been sold thus far this year, more than a 15-fold increase from the same year-ago period.
May. 7, 2014, 12:11 PM
- It started late last year amid a report of JPMorgan's (JPM +1.3%) practice of hiring children of well-connected Chinese, but the WSJ reports the SEC is seeking information from a host of banks - including Credit Suisse (CS -0.3%), Goldman Sachs (GS +0.8%), Morgan Stanley (MS), Citigroup (C +0.5%), and UBS - about their Asian hiring. Fortunately, this sort of thing never happens in the U.S.
- At issue are possible violations of the Foreign Corrupt Practices Act which bars U.S. companies from anything that could resemble a bribe to foreign officials. The probe has rattled bankers in the region, says the Journal, with some choosing to walk away from potential deals which could come under scrutiny at some point.
May. 7, 2014, 8:06 AM
- Repsol (REPYY, REPYF) says it has sold nearly all of its remaining stake in YPF to Morgan Stanley (MS) for $1.26B.
- The expected sale comes after Repsol earlier this year agreed to end a legal conflict with Argentina after the country expropriated a majority stake in YPF, eventually leaving Repsol with a ~12% stake.
- Repsol says it will make a $622M pretax capital gain from the sale.
May. 6, 2014, 1:50 PM
- Finra fined Morgan Stanley (MS -2.4%) $5M over charges the bank failed to provide adequate training to staff on 83 IPOs including Facebook and Yelp between Feb 16, 2012 to May 1, 2013.
- Finra says Morgan Stanley wealth management division staff failed to differentiate between two types of nonbinding offers, i.e., “indications of interest” and “conditional offers”.
- MS neither admitted nor denied the charges.
May. 5, 2014, 10:20 AM
- A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
- Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
- Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
- Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
- The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
- XLF -0.7%, KBE -0.8%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
May. 3, 2014, 8:21 AM
- With Q1 results for the global banks just in the books, JPMorgan (JPM) becomes the first to warn on trading revenues in Q2, expecting markets revenue to slip 20% after declining 17% in Q1.
- SEC Form 10-Q
- As in the past, the biggest driver of the slide is weakness in fixed income, currencies and commodities (FICC) as investors continue to shy from exotic fixed-income vehicles contrived by bankers, and instead favor less profitable (for the bond desks) government and high-grade corporate bonds. There's also new regulations which have forced banks away from lucrative businesses like energy trading.
- "I don't look at the $5 billion in markets revenue and cry in my soup," said CEO Jamie Dimon on Q1's earnings call (the bank did $5.37B in trading business in Q1), stressing his belief that the current tough time for trading is cyclical not secular.
- JPMorgan fell 1.5% in after hours trading following the news last night. Morgan Stanley (MS) -0.5%, Goldman Sachs (GS) -0.1%, Bank of America (BAC) -0.7%, Citigroup (C) -0.4%: "Certainly J.P. Morgan's forecast does not bode well for the other big banks," says RBC's Gerard Cassidy.
May. 2, 2014, 3:42 AM
- Goldman Sachs (GS) and Morgan Stanley (MS) are on a Fed list of 15 U.S. and foreign financial firms that "may pose elevated risks to U.S. financial stability" and so will receive extra supervision by a cross-disciplinary special unit called the Large Institution Supervision Coordinating Committee.
- Other firms on the list include JPMorgan (JPM), Bank of America (BAC), AIG (AIG), GE (GE), Citigroup (C), Wells Fargo (WFC), State Street (STT), Prudential Financial (PRU), Barclays (BCS), Credit Suisse (CS), Deutsche Bank (DB) and UBS (UBS).
- As a major clearing and custody bank, Bank of New York Mellon (BK), will also receive the extra attention.
Apr. 30, 2014, 6:55 AM
- Private banking in Switzerland isn't as much fun as it once was as the country has given ground on its famous bank secrecy rules amid numerous U.S. and European investigations into tax evasion. Facing its own DOJ investigation into its practices in that country, Morgan Stanley (MS) unloads its private banking business there to Bank J. Safra for undisclosed terms.
- The deal is expected to close in 2015 H1.
Apr. 29, 2014, 3:41 PM
- “We have a spectacular asset,” Morgan Stanley (MS +1.7%) James Gorman tells the FT. “We’re the 10th largest bank in the country and we have no bricks and mortar.” Retail banking has become so important to Morgan Stanley, says Gorman, that management has recently explored - and rejected for now - publishing separate results for the business.
- The focus going forward will be on lending to existing brokerage clients - particularly mortgages and loans secured against customers' portfolios.
- Analysts note this isn't Gorman's first rodeo and his initial experience had a few bumps. As Merrill Lynch's brokerage chief in 2002, Gorman pushed to develop deeper banking relationships with that company's clients. "There's absolutely no reason why our clients should have a bank relationship away from Merrill," he said then. Two years later, Merrill took a big charge for bad loans.
Apr. 29, 2014, 10:51 AM
- The Swiss units of Goldman Sachs (GS) and Morgan Stanley (MS) agree to open their books on Swiss accounts set up for U.S. clients, reports the WSJ. In return for entering the so-called "category 2" program, the two won't face prosecution which could have resulted in fines equal to up to 50% of the value of their undeclared accounts.
- If it turns out they haven't helped Americans evade taxes, the banks could be downgraded to "category 3," and won't face any penalties.
- The DOJ says more than one-third of Swiss banks have committed to category 2. "It's a tricky thing to just say, I'm sure we had nothing," says Martin Naville, CEO of the Swiss American Chamber of Commerce. "Better safe than sorry."
- Goldman's Swiss private bank had about $12B in assets under supervision as of the end of 2013, and Morgan's had $50.7B in AUM, though much of that was from branches in Hong Kong and Singapore.
- Citigroup and JPMorgan also have Swiss operations, but haven't yet entered any DOJ programs.
Apr. 21, 2014, 9:41 AM
- Citing Morgan Stanley's (MS +0.4%) big Q1, Nomura upgrades the stock to a Buy with price target raised to $36 from $33. The bank's capital build and strength in investment banking and trading offset modest disappointment with wealth management results, says the team. Going forward, fixed income will remain a challenge, but look for "robust" revenue from institutional securities. An increased backlog in investment banking and "constructive" outlook for equities business are also positives.
- Morgan Stanley earnings coverage from last week
Apr. 17, 2014, 12:15 PM
- On the surface, Morgan Stanley's (MS +3.5%) Q1 results appear far better than those of Goldman Sachs (GS +0.6%), with FICC revenues up 9% Y/Y vs. a decline at Goldman. But Oppenheimer's Chris Kotowski notes Morgan had an especially easy comparison since 2013 Q1 was particularly weak. "Nonetheless, it is always nice to see year-over-year growth, and Morgan Stanley's is the best we have seen so far."
- Kotwoski also takes note of return on tangible common equity - 11.1% at Goldman vs. 10.9% at Morgan. Despite the lower ROE, Morgan trades for 10.3x 2015 estimates vs. 9.4x for Goldman. Investors may want to have to take a harder look at which one to buy.
Apr. 17, 2014, 9:20 AM
- On the surprising strength in FICC revenues in Q1, Morgan Stanley (MS) CFO Ruth Porat - speaking on the earnings call - says weather-related volatility played a big factor in strong commodity business, but credit corporates and mortgages continued to be strong areas for the bank.
- On HFT: “We’ve advocated for increased transparency and trading protocol ... So we welcome ongoing enhancement (in) equity market structure."
- Asked by Mike Mayo to break out the numbers in prime brokerage, Porat declines, saying it's not company policy to break out components within units. "Client balances and revenues are up quarter over quarter and year over year ... (the) highest balances since the crisis."
- Live blog of call
- Shares +2.5% premarket
Apr. 17, 2014, 7:09 AM
- Morgan Stanley (MS) was firing in Q1, with revenue (excl. DVA adjustment) of $8.8B up from $8.5B a year ago, and income from continuing operations of $1.4B or $0.68 per share comparing to $1.2B or $0.60 per share a year ago.
- Wealth Management pre-tax income of $691M on revenue of $3.62B compares to $597M on revenue of $3.47B in last year's Q1. Pre-tax margin of 19%.
- Even FICC is cranking, with revenue of $1.7B up from $1.5B a year ago. This compares to declines at Citi and JPMorgan (though BofA showed an increase). We'll see later this morning what Goldman reports. Prior to earnings season, both Goldman and Morgan were thought to be especially vulnerable to a slowdown in trading revenue.
- Tier 1 Common Equity Tier 1 capital ratio of 14.1%. Tangible book value per share of $27.41.
- Q1 results, press release
- Shares +4.4% premarket
Apr. 17, 2014, 6:56 AM
Apr. 17, 2014, 6:47 AM
MS vs. ETF Alternatives
Morgan Stanley is a financial services firm that, through its subsidiaries and affiliates, provides its products and services to a diversified group of clients and customers, including corporations, governments, financial institutions and individuals.
Other News & PR