Morgan Stanley looks to expand in Asia as markets deregulate
In Hong Kong, the firm ranked first in arranging share sales
[HONG KONG] Morgan Stanley is pushing to expand its footprint in Asia, betting on a more favourable business outlook and growing opportunities in deregulated economies, according to Gokul Laroia, the firm’s chief executive officer for the region.
Laroia said that the company is recruiting financial advisers, and in capital markets and commodities, with a particular focus on markets that combine scale with regulatory liberalisation.
“There’s a bunch of markets in Asia that have scale, but also deregulated, so you can do more,” he said. “So as we can do more, we look to fill those footprint gaps with quality talent.”
Morgan Stanley is pushing deeper into Asia as buoyant markets, a reviving Hong Kong IPO pipeline and rising trading volumes propelled the bank to a second consecutive record year in the region. The firm’s Asia revenue rose 23 per cent to US$9.4 billion last year.
Overall, the New York-based firm reported record annual net income last year, while total investment-banking fees rose 47 per cent amid a return in dealmaking. In Hong Kong, the firm ranked first in arranging share sales.
Across trading desks, volumes are running high, including in China, driven by a mix of global uncertainty and local reallocation, Laroia said. Investors are moving money out of low-yielding bank deposits and bonds into higher-dividend equities, a shift previously seen in India and now being encouraged in Japan, he said.
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“When these volumes come to the market, they add up and it’s a pretty good environment,” he said. “And then on top of that, you have obviously got the geopolitics and the volatility associated with the geopolitics, and that adds to the mix. So it’s really a global local combination.”
While technology has enabled the firm to handle far higher daily trading volumes without a proportional increase in headcount, growth in wealth management, new stock issuance and mergers and acquisitions is prompting hiring, he said.
The firm’s optimism is also driven by key themes such as artificial intelligence infrastructure, AI adoption and semiconductor supply-chain localisation and industrial automation, which are only beginning to take shape, even as overall investment levels in Asia lag behind the US, Laroia said. BLOOMBERG
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