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Morgan Stanley (MS) Slashes Six Equity Business Jobs in Asia

Zacks Equity Research

Morgan Stanley MS has laid off around six employees in equity sales, trading and research department across Asia, as part of its cost-cutting drive. The news was first reported by Reuters, citing people with knowledge of the matter.

Cuts at the U.S. investment bank has affected mid-level staff and some senior executives, per one source. The employees laid off in Hong Kong, Singapore and other locations were informed in advance last week.

Marred by lower equity trading income in first-quarter 2019, Morgan Stanley has undertaken efforts to trim the department. The company supposedly fired five people from its equities sales and trading business in London last week.

Notably, trading income, which is largely dependent on the overall performance of the capital markets, constitutes almost 35% of Morgan Stanley’s net revenues. While trading revenues declined in first-quarter 2019, solid client activity and rise in market volatility supported trading revenues in 2018.

Given the expectations of global economic slowdown and geopolitical tensions, markets might remain volatile in the quarters ahead. Also, elevated expense base of Morgan Stanley is a major near-term concern, and will hurt its bottom line to an extent.

However, the company’s focus to strengthen its corporate banking unit, which is leading to steady rise in consolidated loans and lending commitments, is encouraging. Also, it continues to undertake inorganic growth efforts, latest being the deal to acquire Solium Capital, which will further boost wealth management business.

Shares of Morgan Stanley have lost 7.1% over the past six months compared with 7.2% decline of the industry it belongs to.

Currently, the company carries a Zacks Rank #3 (Hold).

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