FINANCIALS: Morgan Stanley Call: Positive For UBS

Morgan Stanley (MS:  A1/A-/A+) analysts’ call later yesterday were mildly positive for spreads but the issuer has outperformed peers YTD. Still worth noting for the positive lateral to, for example, UBS.

• “Multi-year” investment banking cycle: a term the CEO used last time around, he’s repeated and pointed out that there is a lot of pent-up post-COVID deal-making to be done including private-capital backed companies moving to public again. He sees the evolution there as “convertible deals to IPO to M&A” and noted the former had picked up significantly in 2Q24. Positive for most IBs.
• Wealth mgmt flows: these appeared weaker-than-expected in these results but mgmt noted both that it was US tax season alongside the fact that still-subdued IPO levels have tended to suppress activity in this business. So, recovery here is linked to the first point and likely notable for UBS with its sizeable US wealth presence.
• Finally, MS’s DCM performance was strong, especially relative to peers – he noted a particular niche here in non-IG issuance which was a traditional strength of Credit Suisse.