Morgan Stanley CEO James Gorman made news in February when he revealed that a critical goal for the bank was to boost bank's market share in fixed-income trading to roughly 8 percent, compared with the JP Morgan's market leading 15 percent share.
But Gorman would like to boost market share in other asset classes as well, and things may be looking up in the near term. According to Bloomberg, analysts at Goldman Sachs have raised their recommendation on Morgan Stanley to buy, up from neutral. This is based in part on brighter prospects for trading in 2012.
“Morgan Stanley posted the only increase in trading revenue excluding accounting gains among the five largest Wall Street banks in 2011…. Revenue from Morgan Stanley’s investment banking and trading division will probably rise 13 percent in 2012, excluding one-time items, to $17.4 billion as credit spreads tighten and activity levels increase from a ‘cyclically depressed’ second half of 2011, the analysts estimated. Profitability in that unit may benefit from cost-cutting and lower deferred compensation expenses.”
You do get the feeling that analyst and others are counting on a big rebound in trading and investment banking, as the comps will likely be favorable this year. A boost in business will raise all ships. We’ll see who positioned themselves best. One big issue, according to the analysts, is retaining top talent. That said, all the bulge bracket will be in the same boat when it comes to talent.
For more:
- here’s the article
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