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Morgan Stanley (MS) |
HenryTo
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 Posted: Thu Nov 29, 2007 4:37 pm Post subject: Morgan Stanley (MS) |
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This isn't too much of a surprise - at least to those that followed the Purcell ouster in 2005.
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Morgan Stanley: Cruz Out As Co-President
Thursday November 29, 5:33 pm ET
Morgan Stanley Co-President Zoe Cruz Will Leave As Investment Bank Changes Top Leadership
NEW YORK (AP) -- Morgan Stanley said Thursday that co-President Zoe Cruz, one of the most powerful women on Wall Street, will leave in the latest investment bank management shakeup since the summer's credit turmoil.
Robert Scully, who was named co-President along with Cruz last year, will remain at the firm in a new capacity. He will join a newly created Office of the Chairman, and will focus on Morgan Stanley's sovereign investors.
Cruz had been with Morgan Stanley for the past 25 years, and rose to her current title after former chief executive Philip Purcell promoted her in a move to consolidate power. There had been expectations that John Mack, the current CEO, would at some point place someone else in the job.
He did that on Thursday, naming Walid A. Chammah and James P. Gorman as co-presidents. Chammah, 53, was named global head of investment banking in July, while Gorman, 49, runs the global wealth management group.
Mack said in a statement that both will be able to lead Morgan Stanley during a challenging period. Investment banks have been forced to write down some $80 billion of losses in the past few quarters amid a growing credit crisis triggered by a spike in subprime mortgage defaults.
"We see significant opportunities to build on the market leadership positions we have across our global franchise and to take advantage of the strong foundation we've put in place in recent years," he said in a statement. "Today's markets, however, are changing rapidly, and we're putting in place a leadership team that is ideally suited to help Morgan Stanley realize the opportunities ahead, while continuing to navigate the current challenging condition."
There were also major changes in Morgan Stanley's credit and mortgage-related businesses after the investment bank announced it would take a $3.7 billion writedown during the fourth quarter.
Michael Petrick -- who heads the company's corporate credit group -- will become co-head of institutional securities sales and trading. He replaces Neal Shear, who will go back to leading Morgan Stanley's commodities business.
The investment bank also announced that Tony Tufariello, the global head of its securities products group that suffered most of the mortgage-related writedowns, will retire from the company. A replacement has yet to be named.
A spokesman for Morgan Stanley declined to comment beyond the company's statement. |
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HenryTo
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| Posted: Sun Oct 23, 2011 5:12 pm Post subject: |
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Morningstar on MS' 3Q earnings:
| Quote: | Morgan Stanley is starting to look more like an asset manager than an investment bank.
Morgan Stanley MS reported net income to common shareholders of $2.2 billion, or $1.15 per diluted share, on $9.9 billion of net revenue for the third quarter of 2011. Included in the quarter was a $3.4 billion positive debt valuation adjustment (DVA) gain related to revaluing some of the company’s own debt after changes related to the company's debt-related credit spreads. If the debt valuation adjustment impact were excluded, the company would have reported approximately $0.03 per diluted share. We don’t anticipate any material change in our fair value estimate for the company.
During the quarter, the market via Morgan Stanley's widening credit default swap and debt spreads implied that the company's credit worthiness deteriorated. Much of the deterioration appeared to be related to baseless rumors and misinterpretation of the company's counterparty exposure. According to accounting rules, the company was able to recognize a noncash gain as the value of its own debt liability decreased. The noncash $3.4 billion debt valuation adjustment gain in the quarter has virtually no true economic consequence. That said, Morgan Stanley did put some of its excess liquidity to use and repurchased some of its own debt at a discount, recognizing a real gain of less than $100 million.
We believe that Morgan Stanley is both solvent and liquid. We mainly base our opinion of the company's solvency on its large amount of high quality tangible common equity. We estimate that Morgan Stanley has two to three times more tangible common equity compared to tangible assets and consequently less than half the leverage of Bear Stearns or Lehman Brothers in 2008. We also estimate that Morgan Stanley has three to four times more tangible common equity compared to Level 3 assets than Bear Stearns or Lehman Brothers did. Level 3 assets are assets that don't have a readily, independently verifiable, price. They are commonly said to be "marked to model," or more derisively, "marked to imagination," making them a decent proxy for questionable, illiquid assets with the potential to accumulate losses.
Morgan Stanley has also has a reasonable liquidity profile. Deposits have nearly doubled since the end of 2008, and the company has increased the length of its secured funding for many of its less liquid assets by more than six times over from the beginning of 2008 to the present. We also derive quite a bit of confidence in the company's liquidity from Morgan Stanley having become a bank holding company with access to Federal Reserve borrowing. With confidence in Morgan Stanley's capital base, people should be confident that the company can source as much liquidity as needed from the market or the Fed.
Along with its third quarter financials, Morgan Stanley released additional data related to its exposures to European periphery countries (Portugal, Ireland, Italy, Greece, Spain) and France, as they were the focus of some of the market rumors. The company reported that it has only $2.1 billion of net funded exposure to PIIGS and negative $300 million of exposure to French entities. Even in a worst case scenario, $2.1 billion is less than 5% of the company's third quarter tangible common equity and is easily manageable. The negative $300 million for France could be interpreted as the company over insuring its French risk and that it may be possible for the company to actually book a gain if the credit quality of French counterparties deteriorates. In general, the key takeaway is that Morgan Stanley's potential loss exposure to PIIGS and France are nothing to be overly worried about.
In regards to overall company results excluding the debt valuation adjustment, they were decent for what was a tough third quarter for many financial firms. On an adjusted basis, practically all revenue lines were down. Investment banking revenue declined 39% sequentially as capital market volatility and generally worse valuations for equities and debt delayed the raising of capital. Fixed-income trading struggled, as trading revenue likely butted up against negative marks on fixed-income inventory positions. The company's relatively higher percentage of revenue tied to equity trading helped, as high volatility increased both trading volumes and bid-ask spreads. Company investments in merchant banking funds and real estate took a hit along with equity markets, but the positions also have the potential to book gains going forward if the economic outlook improves. Asset management revenue is closely tied to beginning of period asset levels, so was roughly flat in the third quarter, and might fall in the fourth. It's difficult to imagine the fourth quarter having as much capital market volatility, government stance ambiguity, and economic uncertainty as the third quarter, so we expect results to improve, although it is too early to predict the extent of such improvement. |
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HenryTo
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HenryTo
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rffrydr
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| Posted: Thu Oct 22, 2009 10:49 pm Post subject: |
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Morgan Stanley
Published: October 21 2009 14:50 | Last updated: October 21 2009 20:53
Move along; nothing to see here. Passers-by may be tempted to stop and stare at Morgan Stanley’s first quarterly profit in a year. Strength in investment banking helped net revenues surpass expectations, while even the messy gains and losses associated with the value of the bank’s own debt which have obscured results for the past year appear to be stabilising. Morgan Stanley’s shares, which have rallied 5 per cent this month as investors absorb another strong quarter for brokers, jumped another 6 per cent.
Solid progress was enough for the bank this quarter, which has gone from crisis to strategic overhaul to operational mishap, setting itself a low hurdle to impress. Taking a little more risk is starting to pay off in areas such as fixed income trading, with the promise of more to come as the bank continues hiring. But Goldman still managed to extract three times Morgan Stanley’s haul from those markets, while Barclays Capital points out that on a core basis the trading results show Morgan Stanley simply keeping pace with its rival quarter-on-quarter. Elsewhere, clients are returning to areas from which they fled last year, with prime brokerage balances up 14 per cent from the previous quarter.
Yet Morgan Stanley evidently remains cautious, with a third of its tier one capital still languishing unallocated. Meanwhile, much remains to be done in areas where the bank hopes to distinguish itself, notably the wealth management joint venture with Smith Barney. The battle to retain staff here is pushing up overall compensation costs, and Morgan Stanley will need to work hard to lift pre-tax margins from 9 per cent. This quarter merely represents Morgan Stanley’s clean start. It now must deliver on that – without again causing a scene.
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HenryTo
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HenryTo
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| Posted: Sun Oct 12, 2008 4:20 pm Post subject: |
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Mitsubishi UFJ Financial Group negotiating with Morgan Stanley to try to gain more favorable terms. Talks have pulled in the US Treasury and the Japanese government as well:
http://www.nytimes.com/2008/10/13/business/13morgan.html?ref=business
| Quote: | Last month, Mitsubishi agreed buy about 21 percent of Morgan Stanley. The investment was to be made in the form of $3 billion in common stock, at $25.35 a share, as well as $6 billion in convertible preferred stock with a 10 percent dividend and a conversion price of $31.25 a share.
Under the proposed new terms being discussed on Sunday, Mitsubishi would still buy roughly 21 percent of Morgan Stanley, these people said. But all of the investment would be through preferred shares, with a 10 percent annual dividend. Many of those shares would be convertible into common stock, but the Japanese bank was trying to set a conversion price far lower than originally proposed.
Morgan Stanley and Mitsubishi have been in constant contact with government officials this weekend, these people said.
Mitsubishi and the Japanese government have sought assurances from the Treasury Department that if the United States were to decide to inject money into Morgan Stanley at a later time — a possibility some analysts do not rule out — that such a move would not wipe out preferred shareholders. The Treasurey has indicated that it might use some of the $700 billion bailout package to take direct stakes in banks, but it has not spelled out how it would do so. |
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diesel
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| Posted: Sun Oct 12, 2008 3:50 am Post subject: |
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Financial s have bottomed. I bought UYG on Friday at $8.
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idiotinc
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| Posted: Sat Oct 11, 2008 11:50 pm Post subject: Morgan Stanley |
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I've seen very few things wrong with the fundamentals of MS... I'm buying this stock and putting it out of mind.
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HenryTo
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Stock_Market_4_Beginners
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| Posted: Wed Oct 08, 2008 11:57 am Post subject: |
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| HenryTo wrote: | Mitsubishi UFG confirms that its investment in Morgan Stanley will close by early next week. From Briefing.com:
| Quote: | | 4:07AM Mitsubishi UFG issues statement regarding transaction with Morgan Stanley (MS) 17.65 : Mitsubishi UFJ Financial Group (MTU) issues the following statement: "We have been made aware of rumors to the effect that MUFG is seeking not to close on our proposed investment in, and strategic alliance with, Morgan Stanley. Our normal policy is not to comment on rumors. Nevertheless, we wish to state that there is no basis for any such rumors. The Federal Reserve approved the transaction on October 6, 2008, subject to a mandatory five day waiting period prior to closing. We expect that the closing of the transaction will occur on the first banking day in New York and Tokyo after the end of that waiting period, which is Tuesday, October 14." |
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Adding a bit more to that I happened to read an article in bloomberg.com called "Morgan Stanley Can Avoid Borrowing Until Summer, Analysts Say ". Let me quote some of the interesting facts from it all you investors should know.
"The cost of credit-default swap protection for Morgan Stanley's debt rose to a record this week and the company's $4.5 billion of 6.625 percent 10-year notes are trading at 66 cents on the dollar to yield 13 percent. That has fueled concern the New York-based firm won't be able to finance its business. "
I think it is better for us to keep an eye open and be prepared.
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HenryTo
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| Posted: Wed Oct 08, 2008 5:38 am Post subject: |
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Mitsubishi UFG confirms that its investment in Morgan Stanley will close by early next week. From Briefing.com:
| Quote: | | 4:07AM Mitsubishi UFG issues statement regarding transaction with Morgan Stanley (MS) 17.65 : Mitsubishi UFJ Financial Group (MTU) issues the following statement: "We have been made aware of rumors to the effect that MUFG is seeking not to close on our proposed investment in, and strategic alliance with, Morgan Stanley. Our normal policy is not to comment on rumors. Nevertheless, we wish to state that there is no basis for any such rumors. The Federal Reserve approved the transaction on October 6, 2008, subject to a mandatory five day waiting period prior to closing. We expect that the closing of the transaction will occur on the first banking day in New York and Tokyo after the end of that waiting period, which is Tuesday, October 14." |
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HenryTo
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| Posted: Mon Sep 29, 2008 8:16 am Post subject: |
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Finally:
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Mitsubishi UFJ buys 21 pct stake in Morgan Stanley
Monday September 29, 9:40 am ET
Morgan Stanley gets $9 billion stock investment from Mitsubishi UFJ of Japan
NEW YORK (AP) -- Japan's Mitsubishi UFJ Financial Group says it is investing $9 billion in Morgan Stanley for a 21 percent stake in the U.S. investment bank.
Mitsubishi UFJ said Monday it will buy nearly 10 percent of Morgan Stanley's common stock for $3 billion, and $6 billion in preferred stock.
Morgan Stanley, along with Goldman Sachs Group Inc., had been one of the two remaining independent Wall Street investment banks until the two recently applied to become commercial banks that take deposits.
Wall Street is in a state of upheaval after poor investments in mortgage-backed securities that have led the U.S. government to propose a $700 billion rescue plan for the nation's banks. |
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rffrydr
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| Posted: Mon Sep 22, 2008 8:26 am Post subject: |
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The japanese said they weren't going to do this. There must be some screaming value for those with longer horizons--the japanese.
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HenryTo
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HenryTo
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| Posted: Sun Sep 14, 2008 5:40 pm Post subject: |
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Note that Morgan Stanley is report earnings this Wednesday morning. Depending on what happens tomorrow, we could see this pushed forward to Tuesday or even Monday afternoon.
Interestingly, despite taking write-downs in both 1Q and 2Q, Morgan Stanley still managed to report positive earnings due to its diversified stream of revenes. More importantly, its current net exposure to subprime mortgage-related securities now only totals $300 million. Goldman Sachs expects the company to report 85 cents a share for the current quarter, while the consensus puts its average estimate at 77 cents a share.
With the demise of Lehman and the take-over of Merrill, there are now only two remaining "bulge bracket" investment banks: Morgan Stanley and Goldman Sachs. |
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