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Published: Wed, January 18, 2017
Economy | By Melissa Porter

Shares of Morgan Stanley (NYSE:MS) Sees Large Outflow of Money

Shares of Morgan Stanley (NYSE:MS) Sees Large Outflow of Money

Bank of America Corp topped estimates on a 43 percent jump in revenue from the same business. Current quarter revenue movements show that, the company has set average revenue estimates of $8.47B covering forecast of 21 analysts. "The long-running deficiencies in those safeguards at Morgan Stanley resulted in 36 different types of billing errors that caused overcharges to customers", said Andrew M. Calamari, Director of the SEC's New York Regional Office. While equity trading witnessed modest increase, fixed income trading increased considerably in the fourth quarter particularly after the election results. Analysts were expecting earnings of 35 cents per share on $8.47 billion in revenue. Having enjoyed some 37% stock gains in three months, on Tuesday Morgan Stanley needed to account for those returns.

Overall revenue in Morgan Stanley's institutional securities business, which includes both trading and investment banking and is the company's biggest division, climbed 31% to $4.61 billion. One equities research analyst has rated the stock with a sell rating, thirteen have issued a hold rating and seventeen have assigned a buy rating to the company.

Ahead of the quarter, there were concerns about the extent to which Morgan Stanley's trading capabilities would suffer, as well as weakness in its fixed income, currencies and commodities segment (FICC), which had faced challenges. The company's revenue was up 14.7% compared to the same quarter previous year. The stock has a market capitalization of $82.39B and it has 1.87B outstanding shares.

Unlike some of its Wall Street peers who have announced partnerships with automated investment tools called "robo-advisors", Morgan Stanley has repeatedly said it believes the best way to use technology is alongside human advisors.

Reuters reports that the confirmation came after the Shanghai office of the China Securities Regulatory Commission (CSRC) posted on its website it had approved the important terms of the articles of association of joint venture Morgan Stanley Huaxin Securities Co Ltd. Finally, Citigroup Inc. raised their price target on Morgan Stanley from $30.00 to $32.00 and gave the company a "neutral" rating in a report on Monday, October 10th.

FILE - This Aug. 12, 2014, file photo, shows the headquarters of Morgan Stanley, near Times Square, in NY. The shares were sold at an average price of $42.05, for a total transaction of $5,102,809.55. Stock 3 months performance is recorded as -19.74%. FMR LLC now owns 25,261,255 shares of the financial services provider's stock valued at $656,286,000 after buying an additional 2,191,933 shares in the last quarter.

Margins at Morgan Stanley's wealth management arm got a boost from its increased ownership of Smith Barney (first in 2009; the rest in 2012).

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