Morgan Stanley to raise bet on equities
Morgan Stanley wants to continue to grow its equities business in Australia, after achieving strong gains in market share in 2018.
Morgan Stanley wants to continue to increase its equities business in Australia, after achieving strong gains in market share and bucking volatile markets in the final months of last year to post higher profits.
Morgan Stanley Australia Securities saw profit rise 38 per cent to $31.8 million in the 12 months ended December 31, compared with the previous year, accounts lodged with the corporate regulator showed.
Net revenue climbed to $112.4m over the period from $88.1m in 2017.
That reflected a surge in net trading income which offset a dip in fee and commission income.
“We are focused on continuing to grow our market position,” Morgan Stanley’s local head of institutional equities, Will McKenzie, said. “Our institutional equities business had another solid year and our performance reflected broader activity levels with overall trading volumes up … We have seen continued market share gains with strong momentum this year reporting market share of 9.9 per cent in Australian cash equities for the first quarter of 2019 in a highly competitive market.”
Morgan Stanley’s market share in equities trading was 8.2 per cent for 2018, with the firm cementing a position in the top five brokers in the past six years.
The competition is far from abating this year, though, with rival firm UBS dominating the most recent large block trades, including selldowns in Platinum Asset Management and Inghams Group.
Equities teams and capital markets bankers will be hopeful that some life returns to the lacklustre initial public offerings market this year.
Morgan Stanley is understood to be one of several banks lining up to work on the potential float of GFG Alliance, formerly Arrium Australia’s steel assets.
The securities unit declared a dividend of $60m for 2018, compared with no payment the previous year.
For 2018, ASX data showed the average daily value of traded shares on market was $4.4 billion, up 6 per cent on 2017.
Separate financial accounts showed losses at Morgan Stanley’s wealth management unit widening to $6.8m in the year ended December 31, from losses of $1.2m a year earlier.
Net revenues rose 5.2 per cent to $125.7m, but expenses jumped 11.4 per cent to $135.1m as staff costs increased.
“Our wealth management business achieved a solid operating result in 2018 underpinned by strong net fee and transaction income. In terms of profit before tax, the firm was impacted by some material investments for the future,” Morgan Stanley’s local wealth management chief, Ian Chambers said.
“We have added 10 high quality advisers to the team in recent months and will continue to look at selective hires and growing our wealth business.”
Mr Chambers added that Morgan Stanley’s private wealth management platform reported 55 per cent growth in assets under management to $US5.3bn ($7.4bn) from January 2017 to this month.
The two sets of accounts do not provide a complete picture of Morgan Stanley’s Australian business, as they exclude the investment banking operations as well as revenue allocated to other jurisdictions.
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