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Morgan Stanley optimistic as Q4 earnings beat estimates

17 January 2017

Equity sales and trading revenues helped by strength in derivatives

Read more: Morgan Stanley earnings Trump 2017

Morgan Stanley boss James Gorman struck a positive tone on Tuesday as the investment bank posted better-than-expected fourth quarter earnings.

Revenues of $9bn between October and December were ahead of the $8.47bn anticipated by analysts.

Meanwhile, the $1.7bn net income figure beat the $908m recorded during the same period in 2015.

Equity sales and trading net revenues of $2bn increased from $1.8bn a year ago.

The bank put this down to solid results across products and regions, with particular strength in derivatives.

$1.5bn of fixed income sales and trading revenues was an improvement on the $550m a year ago, when weaker levels of client activity in rates and foreign exchange hampered results.

Asset management fee revenues of $2.2bn increased from $2.1bn in 2015's Q4, reflecting market appreciation and positive flows.

"We are optimistic about opportunities in 2017 and beyond and remain focused on serving our clients and achieving our strategic objectives," said Gorman, Morgan Stanley’s chairman and chief executive.

Shares in Morgan Stanley have risen by more than 30% since November. A friendlier regulatory environment and lower taxes under Donald Trump’s administration could provide significant boost to bank revenues and profits.

SocGen analysts upgraded their estimates for Morgan Stanley last week, adding that the firm could be one of the biggest beneficiaries of Trump’s policies.

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