Morgan Stanley Q1 profit beats estimates on trading boost as it jumps 40%

Morgan Stanley tracked arch rival Goldman Sachs in delivering stronger-than-expected results on Wednesday, but sounded a note of caution about the impact of trade tensions and geopolitical concerns on future trading revenue.

A 40 percent rise in first quarter profit at the bank was driven by the rise in market volatility since February, but Chief Financial Officer Jonathan Pruzan warned that market turbulence like that caused by a tit-for-tat row with China could push clients to the sidelines.

"Volatility is interesting because there's certain volatility that is pretty good and conducive to markets and clients and our results, and then there's volatility, like we saw in February, which was pretty gappy," Pruzan told Reuters.

"Our firm was able to absorb those spiky days, but too much of a good thing is not a good thing for our businesses."

He also pointed to the bank's struggles last year to match a strong first quarter when its sales and trading revenue surged 30 percent. This time round, sales and trading revenue jumped 26 percent in the first three months of the year, driven by strong gains in equities and bond trading.

Energy stocks lead gains on S&P; IBM drags as profit margin misses estimate

The benchmark S&P 500 index posted slight gains on Wednesday, helped by gains from industrial and energy stocks, but IBM's disappointing results and a sell-off in semiconductor stocks weighed on the Nasdaq and the Dow.

IBM fell 6.2 per cent after the company reported quarterly profit margins that fell short of Wall Street expectations.

Semiconductor stocks also took a hit, led by Lam Research's 5 per cent drop after what analysts called a disappointing shipment forecast. The S&P technology index fell about 0.5 per cent.

Not all results were disappointing. Morgan Stanley rose 3 per cent after it reported a 40 per cent jump in quarterly profit, driven by its trading business.

United Airlines rose 1.6 per cent after reporting a rise in profit and CSX Corp jumped 7 per cent after the railroad operator topped profit estimates. That helped lift the Dow Jones Transport index by 1.2 per cent.

Oil prices jumped about 2 per cent, lifted by a reported decline in US crude inventories and the risk of supply disruptions. Exxon and Chevron were up about 1.3 per cent.

HDFC Bank has picked arrangers for $2.4 billion share sale: Sources

India’s HDFC Bank Ltd, the world’s most-expensive lender, has appointed arrangers including Bank of America Corp, Morgan Stanley and Credit Suisse Group AG for a Rs 155 billion ($2.38 billion) planned share sale, people with knowledge of the matter said.

The lender has also appointed JPMorgan Chase & Co, Edelweiss Financial Services Ltd, IIFL Holdings Ltd and JM Financial Ltd for the offering, the people said asking not to be identified because the information is private. The sale process will begin as soon as the lender gets the required regulatory approvals, they said.

HDFC Bank plans to raise the bulk of the funds from international investors through a sale of American depository receipts, with the rest to come from selling stock in India, the people said. The money will be used to boost the lender’s capital buffers and support its growth plans for several years, Paresh Sukthankar, deputy managing director of HDFC Bank said in January.

Theresa May to meet business chiefs on Brexit

British Prime Minister Theresa May is to meet business chiefs on Monday in a bid to reassure them that the Brexit process is on track, following a bruising week for her leadership.

A plot to oust her by around 30 MPs in her Conservative Party went public yesterday, but cabinet colleagues refused to join the push.

The plot came after her showpiece speech to the centre- right party's annual conference on Wednesday -- intended to steady her leadership -- was plagued by mishaps.

A prankster managed to hand her an unemployment notice, a persistent cough left her almost unable to deliver her speech, while the set behind her started falling down.

Monday's business meeting at May's Downing Street office will come as British and European Union negotiators resume talks in Brussels in the hope of a breakthrough in the Brexit negotiations.

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Bank of America picks Dublin as new base for EU operations post Brexit

Bank of America on Friday became the first Wall Street lender to pick Dublin as its new base for its European Union operations as Britain prepares to leave the bloc.

International banks are planning to set up subsidiaries in the EU to ensure they can continue to serve clients if their London operations lose the ability to operate across the bloc once Britain leaves in March 2019.

Frankfurt and Dublin are emerging as early winners for banks' post-Brexit operations.

"Bank of America has operated in Ireland and engaged in the local community for almost 50 years," said Brian Moynihan, chairman and CEO of Bank of America.

The bank did not say how many roles would be moved or created in the Irish capital, where it currently has over 700 staff and a fully licensed entity, but said that some roles would also move to other EU locations.

The Irish government, which has been keen to attract investment banks to Dublin, welcomed the news.

"This announcement...is a strong endorsement of Ireland's attractiveness as a location for investment, and of the government's approach to securing Brexit-related activities," Irish Prime Minister Leo Varadkar said following the announcement and a meeting with Moynihan in Dublin on Friday.
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Morgan Stanley to shift 200 jobs to Frankfurt, prepare for post-Brexit EU

Morgan Stanley has picked Frankfurt as a new temporary hub to operate in the European Union when Brexit takes effect, a person familiar with the situation said.

The New York investment bank will double staff in the German city from 200 to 400 in order to be ready to continue to operate in Europe by the March 2019 deadline for Brexit to take effect, the person said on Wednesday.

"It's a short-term solution," the person said, adding that Morgan Stanley executives continued to consider other cities for its long-term headquarters.

Morgan Stanley currently employs about 5,000 people in London but will relocate some traders as well as marketing and administrative staff to Frankfurt.

The bank also plans to shift a smaller number of banking and trader jobs to Paris, Dublin, Madrid and Milan, the person said.

Morgan Stanley plans to later take a decision on the permanent headquarters for the EU operations. French President Emmanuel Macron, among other European leaders, has been actively trying to lure bankers to Paris for the post-Brexit era.

Frankfurt has already been picked as the EU headquarters by Standard Chartered and Nomura.

JPMorgan Chase has transferred hundreds of jobs to Dublin but has not announced plans for a permanent headquarters for the EU.

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Budget 2017 expected to be market-neutral: Morgan Stanley

Latest News - The Union budget is going to be a "market-neutral" event as policymakers are not likely to change their policy stance and will continue to focus on fiscal consolidation, says a Morgan Stanley report.

"We do not expect major changes in the conduct of fiscal policy and hence, view the budget as a market-neutral event," Morgan Stanley said in a research note.

The Union budget for 2017-18 is due to be presented on February 1.

According to Morgan Stanley India Strategist Ridham Desai, the budget's influence on (Read More)