Morgan Stanley trading flat amid market uncertainty

Cost-cutting and mergers and acquisitions kept Morgan Stanley afloat, as trading revenues remained relatively unchanged.

Morgan Stanley has reported its trading earnings dipped slightly in the second quarter this year, driven down by market uncertainty.

Equity trading sales suffered most in the second quarter this year, with revenues totalling $2.1 billion down 9% compared to the same period last year.

Morgan Stanley blamed reduced volumes and levels of activity in Asia for the decrease in equities, offset by a better performance in Europe and the US.

Mergers and acquisitions as well as its recent cost-cutting programme - which saw its trading desk headcount reduced – made a significant contribution to the second quarter earnings.

Morgan Stanley said total non-interest expenses decreased 8% to $6.4 billion in the second quarter this year compared to last year.

Fixed income and commodities trading revenues remained flat compared to the second quarter last year, totalling $1.3 billion, despite selling its oil business and shedding headcount by 25% earlier this year.

Investment banking sales were up a significant 375% following a “mark-to-market gain on business related investments”, Morgan Stanley said.

The business unit accumulated revenues of $76 million, compared to $16 million in the second quarter of 2015.

James Gorman, chief executive officer at Morgan Stanley, said the results in the second quarter “reflect a solid performance.”

Its overall business revenues were down from $9.7 billion in the second quarter last year, to $8.9 billion this year.

Gorman concluded: “In the midst of market uncertainty, we maintained our leadership positions across our core franchises and continued our focus on prudent risk management and judicious expense control.”