Corr! It’s almost like Teun Draaisma, FTAV’s favourite quant during the proper crisis, was suddenly back in action.
Clock this from Morgan Stanley’s Graham Secker and Matthew Garman: Read more
Study this chart carefully. It’s the first day of dealings in Zalander, the Frankfurt-listed online frock shop that claims to be Europe’s biggest.
Here’s a neat idea from the Morgan Stanley equity strategy team.
The consensus of fund managers is normally right, in that when most people want to own something it is probably worth owning. Normally being the operative word here, as when markets turn from boom to bust, or vice versa, that consensus becomes very wrong. Hence the common desire to make a reputation as the heroic contrarian who gets it right.
What Krupa Patel and co have done is to look at the performance of european equity funds over time to see if that might help identify the all important turning points. Unfortunately, it turns out not to be much use for market direction, but it may be useful in spotting more subtle changes in the popularity of investment styles, collectives shift from value to growth, for instance. Read more
Quite the week for Tesla Motors, which jumped 14 per cent on Tuesday after Morgan Stanley auto analyst Adam Jonas penned a financial love letter that dreamt of a robot car utopia powered by Tesla battery packs.
The analyst’s target price went to $320, from $153. It comes after Elon Musk told Bloomberg TV that he had conversations with Apple, but another boost to the valuation ahead of any stock based capital raising to fund the battery “Gigafactory” can’t hurt.
Incidentally, who was it who asked about a possible capital raise on Tesla’s conference call last week? Read more
Graham Secker and team at Morgan Stanley seems to think so, citing the corporate earnings recovery, rising business confidence and welcoming capital markets. There’s also an element of M&A having to come back into fashion, given that in Europe at least takeovers are running at a circa 20 year low… Read more
The quote is from Gerard Minack, Morgan Stanley’s celebrated equity strategist, based in Australia.
He retired from the bank on Friday and his final thoughts are in the usual place.
Investing is an unusual profession: perhaps the only one where amateurs have a good shot at beating the pros. However, evidence suggests that amateurs don’t: flow data indicate that retail often buys high and sells low.
WARNING: what has happened is no guarantee of what will happen.
WARNING II: if you need the first WARNING, perhaps see us after class?
Anyway… here’s some January European equity lessons from Morgan Stanley: Read more
Morgan Stanley (NYSE:MS) today announced that Paul J. Taubman, currently co-President of Institutional Securities, has informed Morgan Stanley of his decision to retire at year-end. Mr. Taubman will retire after a 30-year career at Morgan Stanley. Colm Kelleher, currently co-President of Institutional Securities with Mr. Taubman, will become President of Morgan Stanley’s Institutional Securities division effective January 2013. Mr. Kelleher will continue to report to Chairman and CEO James Gorman.
Morgan Stanley’s average trading Value-at-Risk (VaR) measured at the 95% confidence level was $63 million compared with $76 million in second quarter of 2012 and $99 million in the third quarter of the prior year. The Firm modified its VaR model this quarter to make it more responsive to recent market conditions.
A few nervous bid arbitrageurs have their eyes on the Qataris right now — wondering, expectantly, whether the Gulf state’s sovereign wealth fund will now support the
takeover merger of equals between Glencore and Xstrata.
The Glenstrata share ratio has been hiked and the Qataris, it is assumed, don’t really care about the size of retention bonuses at Xstrata. But a public endorsement of the deal was noticeably lacking on Monday… Read more
Citi and Morgan Stanley vs the S&P at pixel time, unlocking value by finally parting ways (seemingly):
If you thought Moody’s and the IMF’s cuts were bad check out Morgan Stanley:
We make substantial downward revisions to our UK GDP growth forecasts from 0.5% and 1.8% GDP in 2012 and 2013, respectively, to -0.5% and 1.0%. In terms of GDP growth, our new central case is now very similar to our previous bear case… Read more
What we believe is that rather than stimulating the lending market — and the economy along with it — such a rate policy could have a disastrous impact on collateral markets and money market funds, not to mention the net interest income of lending institutions. All of which could unleash a protracted deflationary spiral. Read more
Barton Biggs, investor, global strategist and founder of Morgan Stanley Investment Management, died on Saturday after a short illness. He was 79.
James Gorman, Morgan Stanley’s chief executive, revealed the news in a memo to staff on Monday: Read more
The story so far:
In Part 1, we reminded you of Morgan Stanley’s footnote in their fourth quarter earnings, whereby the bank stated that it had reduced its exposure to Italy by $3.4bn while benefiting from a positive hit to net revenue of $600m. All of this was as a result of restructuring certain derivatives transactions with the sovereign. Read more
Or, “This House believes all interesting things are in footnotes and FT Alphaville reader comments.”
Allow us to make the case in favour of the motion. Beginning with: Read more
In Part 1, we looked in and around Morgan Stanley’s mysterious little footnote about how the bank had reduced net exposure to Italy from $4.9bn to $1.5bn with a restructuring that settled in the early days of 2012.
As the bank doesn’t want to give any additional detail on what the restructuring, the below outlines some of the possibilities and the implications thereof. We emphasise that we don’t know which is the case and, again, we did ask Morgan Stanley for comment. Read more
(7) On December 22, 2011, the Company executed certain derivative restructuring amendments which settled on January 3, 2012. …
This mysterious little footnote announced to the world that in the fourth quarter, Morgan Stanley managed to arrange a deal that reduced the bank’s net exposure to Italy from $4.9bn to $1.5bn. Read more
Facebook is expected to submit paperwork to regulators on Wednesday morning for a $5bn initial public offering and has selected Morgan Stanley and four other bookrunners to handle the mega-IPO, IFR says, citing sources close to the deal. Morgan Stanley will take the coveted “lead left” role in what is expected to be the largest IPO ever to emerge from Silicon Valley, with the other four bookrunners being Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan, although the underwriting syndicate could be expanded later, IFR cited the sources as saying. Facebook declined to comment. Getting picked for the IPO is a coup for Morgan Stanley and Michael Grimes, the global co-head of the bank’s technology investment banking unit, says Bloomberg. The group won the biggest share of business underwriting US initial offers by internet companies last year, and taking the lead on Facebook may catapult it to the top of the US IPO league table for a third consecutive year.
Morgan Stanley plans plans to cap cash payouts at $125,000, the WSJ says, citing people familiar with the matter. Some top executives will receive nothing now, deferring their 2011 payouts until the end of this year. The bank will defer the portion of any bonus past $125,000 until December 2012 and December 2013, according to one of the people, and chief executive Gorman and the other nine members of Morgan Stanley’s operating committee will defer their entire bonuses for the year. The changes to the structure of compensation at Morgan Stanley are in line with forthcoming rules on compensation in the US, the FT reports, which will require banks to emphasise clawback provisions and to defer bonuses. However, to the chagrin of some European bankers and regulators, the US rules are less prescriptive than in Europe.
JPMorgan’s fourth-quarter revenue miss has dampened the outlook for the banks reporting this week, who include Goldman Sachs, Bank of America, Citigroup and Morgan Stanley, the FT reports. Nevertheless, financial stocks have the highest predicted earnings growth rate – 24.3 per cent – in the S&P 500 index, according to FactSet, and the Federal Reserve is also expected to allow Citigroup to increase its dividend beyond one per cent. However, a round of cost-cutting is likely to come at Goldman and Morgan Stanley, following further tough trading and sparse business from clients in the last months of 2011.
Some €15-45bn for Spanish banks and their government’s bonds at least, according to Morgan Stanley’s Huw Van Steenis, who has just produced a very interesting note on the carry trade du jour – or to use its technical name the ECB’s 3-year LTRO.
The two 3-year long-term repo operations (LTROs) are key pieces of a welcome package to ensure that, even if term unsecured debt remains impractically expensive, Europe’s banks will be able to continue to fund their assets. But could it also be a backdoor route to help sovereign funding, as some policy makers hope? Read more
Morgan Stanley has resolved its legal conflicts with bond insurer MBIA, ending a long-running dispute tied to guarantees of mortgage securities that will result in the bank recording a $1.8bn pre-tax loss, the FT reports. MBIA will pay Morgan Stanley $1.1bn as part of the settlement, which will end lawsuits the companies launched against one another and extinguish $4bn in insurance contracts tied to mortgage securities that Morgan Stanley purchased from the bond insurer, the FT says, citing a person with direct knowledge of the matter. The settlement ends Morgan Stanley’s role in a 2009 lawsuit launched by 18 banks against the insurer and New York state’s financial regulator for restructuring the company during the height of the financial crisis in a way that allegedly harmed Wall Street counterparties. Morgan Stanley had about $2.7bn in exposure to MBIA in the form of derivatives and another $144m in exposure to bond insurers overall related to guarantees on mortgages and other asset-backed securities, according to its third-quarter filing with the US Securities and Exchange Commission.
Morgan Stanley’s Graham Secker makes some interesting observations in his 2012 outlook report.
Chief among them is that the investment framework of the last 25 years is increasingly irrelevant and that Japan offers the best guide to what might happen in the equity market over the next decade. Read more