Morgan Stanley’s profit beats estimates on dealmaking surge, trading boost

[NEW YORK] Morgan Stanley beat Wall Street expectations for its first-quarter profit on Wednesday (Apr 15), as the investment bank benefited from a surge in dealmaking and raked in record revenue from its equities-trading business.

Heightened mergers and acquisitions (M&A) activity in a friendlier regulatory environment and extreme volatility in stock markets – triggered by the recent software sell-off and the Iran war – have bolstered investment banking and trading businesses at big Wall Street banks.

Morgan Stanley’s investment banking revenue soared 36 per cent to US$2.12 billion, boosted by a rise in advisory fees.

Revenue from its equities-trading business also jumped 25 per cent to a record US$5.15 billion, while that from fixed income surged 29 per cent to US$3.36 billion.

Its peers – Goldman Sachs, JPMorgan Chase and Citigroup – also reported a surge in investment banking and trading revenue in the latest quarter.

Deal volumes globally hit US$1.38 trillion in the first quarter, the data compiled by fintech data-provider Dealogic showed, after a near record-breaking 2025 in which global M&A surpassed US$4.81 trillion.

Morgan Stanley’s notable deals in the first quarter included being one of the advisers to Unilever on the merger of its food business with herbs and spices brand McCormick to create a US$65 billion global food behemoth.

Shares of the Wall Street giant rose 2.5 per cent in premarket trading.

Equities trading rakes in record revenue

Global markets have swung sharply in recent weeks, as the Iran war drove up oil prices and fuelled worries that inflation could stay elevated for longer.

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The volatility in asset classes has prompted investors to rebalance portfolios and increase hedging against potential losses.

It is a trend that typically boosts activity at trading desks.

Meanwhile, heightened tensions in the Middle East have unsettled equity markets and dampened risk appetite, weighing on the initial public offering (IPO) market.

Some companies, though, particularly in the industrial and defence sectors, have continued to pursue listings.

Morgan Stanley is among the bookrunners leading the deal on SpaceX’s bumper IPO.

The Elon Musk-led company could raise US$75 billion at a potential valuation of US$1.8 trillion.

Top bosses at investment banks have cautioned that the market for new listings has become more selective as a result of the economic uncertainty.

However, they expect a rebound once conditions stabilise.

Total quarterly revenue at Morgan Stanley rose to US$20.6 billion in the first quarter from US$17.7 billion in the year-ago period.

The Wall Street investment bank’s profit came in at US$3.43 a share, surpassing the US$3 a share expected by analysts, the data compiled by the London Stock Exchange Group revealed. REUTERS