Morgan Stanley’s earnings are hit by bond trading slump

The company’s revenue was down -12.8% compared to the same quarter past year.

Return on equity, a commonly used measure of bank profitability, fell to 3.9% from 8.9% in the third quarter a year ago excluding an accounting adjustment.

Mitsubishi Ufj Financial Group Inc holds 100% of its portfolio in Morgan Stanley for 432.02 million shares.

Valeant Pharmaceuticals worldwide (VRX) has risen 1.4% to $180 after beating earnings forecasts and raising full-year revenue guidance. Morgan Stanley has a 52 week low of $30.15 and a 52 week high of $41.04.

Asian markets closed narrowly mixed (http://www.marketwatch.com/story/asian-markets-narrowly-mixed-after-chinese-gdp-data-shows-slowdown-2015-10-19) in the wake of the reading on China’s gross domestic product, while European equities (http://www.marketwatch.com/story/european-stocks-eye-third-straight-win-but-commodities-shares-take-china-hit-2015-10-19) mostly gained, though commodities-related stocks fell.

Compensation expense declined to $3.4 billion from $4.2 billion, while non-compensation expenses rose to $2.9 billion from $2.5 billion.

The investment banking and brokerage firm reported diluted EPS of $0.48, missing the consensus estimate of $0.63, and decreasing by 42.16% year-over-year (YoY).

Earlier this month, Morgan Stanley shuffled management in the two businesses that drove the earnings miss. The heightened volatility saw the trading volume jump to 13,804,697 shares. The company has a market cap of $66,317 million. Brent crude oil prices fell 2.7 per cent to $49.10 a barrel as worries mount about tepid demand from China and a global supply glut curbing Saudi exports. The Company is a financial holding company.

Institutional securities slipped 14pc to $3.9bn, while sales at the smaller investment management arm plummeted 59pc to just $274m, meaning it made an overall loss of $9m for the bank. Investment Management business segment includes Conventional Asset Management, Alternative Investments, Merchant Banking and Real Estate Investing actions while offering customers a variety of equity, fixed income, alternative investments, real estate and merchant banking strategies.

But Morgan Stanley’s M&A brought in $557m, compared to $503m at J.P. Morgan and $391m at Bank of America. On May 12, 2014, MSCI Inc completed the repurchase of the Company’s entire share capital from Morgan Stanley.