Wed, Jan. 14, 12:17 PM
- There could be downside risk to Goldman Sachs (GS -2.7%) and Morgan Stanley (MS -2.7%) numbers, warns Credit Suisse's Christian Bolu, noting FICC revenue at JPMorgan of $2.5B missed his estimate by about $200M.
- JPM management suggested performance was weaker in credit and securitized products, but forex and emerging markets saw strength, and Bolu notes Goldman's and Morgan Stanley's trading arms tend to be skewed more towards credit and less toward currencies and emerging markets.
- On the other hand, says the team at KBW, JPMorgan's stock trading results were good, which should be a positive for Morgan Stanley and Goldman, given their focus on equities. KBW suggests investors focus on investment banking results overall, rather than get too mired in the unit's various components.
Mon, Jan. 12, 2:51 PM
- "We now see less room for multiple expansion," says JMP's Devin Ryan on his downgrade of Morgan Stanley (MS -1.4%) to Market Perform from Market Outperform. The stock was the team's top pick in 2014, but Ryan notes gains of 25%, 65%, and 28% makes three straight years of significant outperformance.
- The stock's now trading at about 12x the team's 2015 estimates and 1.2x the forward book value estimate.
- Ryan does see opportunity elsewhere, though, particularly E*Trade (ETFC -1.5%) in the retail brokerage sector as earnings growth remains elevated, and Lazard (LAZ -1.2%) in the bulge bracket investment bank area as the M&A cycle still has room to run.
- 2015 is shaping up to be better than 2014 for alternative investment managers as well, says Ryan, naming Fortress Investment Group (FIG -2.2%) and KKR (KKR -2.1%) as top picks.
- Previously: JMP Securities: Time to ring the register on Morgan Stanley (Jan. 12)
Mon, Jan. 12, 8:06 AM
Thu, Jan. 8, 12:24 PM
- Despite new regulations limiting its participation in such funds, Morgan Stanley (MS +1.3%) has raised about $1B for Morgan Stanley Credit Partners II, a private-equity type credit fund.
- The first fund closed in 2011 and was about the same size. The bank began raising money for this new fund 15 months ago.
- The strategy of both funds is the same: Making loans and buying the existing debt of companies in North America and Western Europe with EBITDA of more than $15M.
- Morgan is pushing ahead with private equity even as competitors have pulled back or exited completely thanks to the Volcker Rule. The bank is also raising a $4B global infrastructure fund, a $2.5B global real estate fund, and another global P-E fund of unknown size.
Mon, Jan. 5, 4:41 PM
- A deal for the sale of Montreal Gateway Terminals Partnership - a cargo container facility at the Port of Montreal - to a consortium led by Fiera Axium Infrastructure for more than $600M should be announced later this month, reports the WSJ.
- The Journal several months ago reported MGT had been put on the block.
- This facility has been profitable since Morgan Stanley (NYSE:MS) first acquired a stake in 2007, but others haven't fared as well, making financing for acquisitions tough to come by, and the buyer group is reportedly paying just 16-17x EBITDA vs. a 27x multiple for last year's sale of Australia's Newcastle Port.
Mon, Jan. 5, 11:13 AM
- A now former Morgan Stanley (MS -3.2%) employee stole partial client data on up to 10% of all Wealth Management clients, and certain account information of roughly 900 clients - including account names and numbers - was briefly posted on the Internet. The stolen data does not include passwords or social security numbers.
- The exposure was quickly detected by Morgan, and removed.
- Source: Press Release
Dec. 30, 2014, 11:11 AM
- Having scored tens of billions from other banks over bubble-era mortgages, the DOJ now has Morgan Stanley (MS -0.4%) in its sights, and unearthed documents/emails from an unrelated case perhaps show an even closer relationship between the bank and subprime king New Century than previously imagined.
- “Morgan Stanley is involved in almost every strategic decision that New Century makes in securitized products,” according to one internal Morgan Stanley report from 2004 that the bank surely doesn't want to see put in front of a jury.
- For its part, Morgan Stanley says it was competing for New Century loans with other banks and did not have any special leverage over the lender, and other documents indicate Morgan was stricter than some competitors in deciding which loans to accept.
- Source: NYT
Dec. 22, 2014, 9:15 AM
- Rosneft (OTC:RNFTF) says Morgan Stanley's (NYSE:MS) sale of its global oil merchanting business to Rosneft has been terminated due to likely regulatory refusal.
- Rosneft says the companies will continue to work together in other areas, while MS says it will seek other buyers for the unit.
- The oil merchanting unit includes MS's physical oil inventory and related purchase, sale and supply agreements, as well as oil terminal storage agreements and a 49% stake in a company which manages ~100 oil and chemical tankers.
Dec. 17, 2014, 2:24 PM
- Unlike previous stock sales by the U.K. government, Morgan Stanley (NYSE:MS) is charging a fee of just £1 to handle the affair.
- The bank has a six-month window to sell no more than 15% of the average volume of Lloyds, meaning somewhere in the area of about £3B of stock being sold by the end of June.
- Charity? Not exactly. There's something called order flow, and Morgan Stanley will be allowed to charge commissions to investors when the shares are sold. Morgan was chosen for the work because of the job it did leading the sale of 7.7B Citigroup shares by the U.S. in 2010.
- Previously: U.K. readies next sales of Lloyds stake (Dec. 17, 2014)
Dec. 17, 2014, 7:36 AM
- Jefferies yesterday posted a 73% plunge in fixed-income trading revenue for the quarter ended Nov. 30, and a 45% fall in equity-trading revenue. “You’re going to see weaker trading results because of what I’d call bad volatility,” says Charles Peabody, as firms cut back on stock and bond offerings.
- That Q4 trading revenue is going to be a weak one for the likes of JPM, C, BAC, GS, and MS shouldn't be a major surprise as Ciit's Mike Corbat, BofA's Brian Moynihan, and JPM's Marianne Lake said as much when presenting at a financial services conference earlier this month. But the weakness they described is nowhere near what was reported at Jefferies.
- Alongside the weak trading results, Jefferies is also looking to get rid of Bache - its commodities-trading business. "The fact that they are throwing in the towel on this business just a few years in would suggest that maybe that opportunity is not nearly as robust as they thought it would be,” says UBS's Brennan Hawken.
- Previously: Jefferies posts loss, mulling sale of Bache unit (Dec. 16, 2014)
Dec. 9, 2014, 11:38 AM
- Even as energy markets are buffeted by unusual volatility, some of Wall Street's biggest banks are ready to write billion-dollar checks to finance Cheniere Energy's (LNG +0.4%) $15.5B Corpus Christi natural gas project on the Gulf coast, CNBC reports.
- The commitments could put banks including JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) on the hook if the market for liquefied natural gas goes south, according to the report.
- The gas terminal, now under development and expected to produce as much as 13.5M tons of liquefied natural gas starting in 2018, is now seeking $11.5B in a seven-year bank credit facility that would depend in part on the issuance of new bonds next year and the year after to repay its debt; private lenders reportedly have provided LNG with an initial $2.5B in funding to construct the terminal.
Dec. 9, 2014, 8:52 AM
- A check of the other major banks premarket amid a global selloff of some note and BofA's Brian Moynihan's warning about sluggish Q4 trading revenue finds JPMorgan (NYSE:JPM) -1.5%, Citigroup (NYSE:C) -1.5%, Wells Fargo (NYSE:WFC) -1.2%, Goldman Sachs (NYSE:GS) -1.7%, and Morgan Stanley (NYSE:MS) -1.5%.
- XLF -1.1%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Dec. 2, 2014, 3:42 PM
- "Our concern is that the market has become complacent on the setting of the SIFI surcharge for the mega banks, which means there may be surprise at just how onerous the surcharge could be for JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS)," writes Guggenheim's Jaret Seiberg.
- The Fed is expected to announce the capital surcharge on December 9.
- Previously: U.S. banks to be hit with tougher capital rule
Dec. 1, 2014, 11:40 AM
- A positive macro outlook for the U.S. (especially compared to the rest of the globe) should boost credit demand, says UBS - upgrading U.S. financials (NYSEARCA:XLF) to Overweight - while the start of a new rate-hike cycle next year bodes well for interest margins.
- UBS's three favored U.S. banks are Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Morgan Stanley (NYSE:MS), but TD Bank (NYSE:TD) also makes the buy list thanks to its large American presence.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
Nov. 5, 2014, 3:06 AM
- Morgan Stanley (NYSE:MS) will receive a one-time lift of $1.3B due to a change in the structure of its Morgan Stanley Smith Barney operation.
- On Oct. 31, Morgan Stanley Smith Barney was converted from a partnership to a corporation. That change allowed the bank to release $1.3B it had previously set aside for taxes.
- The restructuring is not expected to change Morgan Stanley’s tax rate going forward, but it will help the bank’s profitability in Q4.
Oct. 23, 2014, 4:49 PM
- Not having had the pleasure of being subject to the stress test and CCAR previously, Deutsche Bank's (NYSE:DB) U.S. unit will be a participant next year
- As in prior years, those BHCs with large trading operations - BAC, C, GS, JPM, MS, WFC - will be required to factor in a global market shock as part of their scenarios.
- Those six, plus STT and BK - thanks to their custodial operations - will be required to incorporate a counterparty default scenario.
- Among the items in the severely adverse scenario is the unemployment rate jumping to 10%, a 60% dive in the stock market, and oil jumping to $110 per barrel (how about oil falling to $10 per barrel?).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KCE, KRU, KBWR, RWW, RYF, KBWC, FINZ, KRS
MS vs. ETF Alternatives
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