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Trading gains provide tonic to ECM and M&A blues

Analysts at Morgan Stanley forecast a 'reasonable if not perfect' start to the year for investment banks, with strong rates and commodities trading helping to offset a sluggish run in ECM and advisory

Volatility and sovereign concerns have helped banks' rates and commodities businesses to a strong start to the year, while equity capital markets and advisory teams have disappointed, leading analysts to predict a "reasonable if not perfect" first quarter.

In a note published yesterday, Morgan Stanley analysts led by Huw van Steenis said that European equities, commodities and rates revenues were offsetting weak performances in other parts of banks' businesses.

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