Morgan Stanley share price plunges

0
Have your say

Wall Street bank Morgan Stanley reported a quarterly profit that fell far short of market expectations and offered little hope that things would improve anytime soon, capping a generally gloomy quarter for big US banks.

Morgan Stanley’s profit slumped for the second straight quarter, as uncertainty about the timing of a US interest rate hike and worries about China’s cooling economy sent shudders through global markets.

The bank’s shares tumbled as much as 6.9 per cent in trading on Monday – the biggest percentage drop since November 2012 – wiping out about $4.6bn (£3bn) in market value.

Chief financial officer Jonathan Pruzan offered a subdued outlook for the current quarter, although he said there had been a modest rebound in global markets.

“So far in the quarter, some of the key drivers that will likely drive client activity are mixed,” Pruzan said. “Drivers of near-term uncertainty, including the Fed, China, commodities and global growth, have not diminished.”

Financial markets have been on tenterhooks for months, trying to gauge when the US Federal Reserve will raise interest rates for the first time since 2006.

Morgan Stanley said adjusted revenue in its business that sells and trades fixed-income securities and commodities fell 42 per cent to $583m in the quarter ended September 30.