Morgan Stanley expects that shortly its income generated as a result of operating in Japan will be fixed at the level that is the highest in the history of its presence in this country.
This optimistic mood regarding the financial results of the business is based on the fact that the confidence spreading in the market in the change in the monetary policy of the central bank of the mentioned Asian country contributes to the revival of trade.
Alberto Tamura, chief executive officer of the Wall Street firm joint venture, which is majority-owned by Mitsubishi UFJ Financial Group (MUFG), says that the Bank of Japan’s actions to loosen controls on bond yields in recent quarters have increased the intensity of processes in the fixed income securities market. He said this trend could intensify if the financial regulator decides to cancel negative interest rates, which have been in effect since 2016.
Alberto Tamura says that the fiscal year ending in March may be the most successful for Morgan Stanley MUFG Securities in terms of revenue. Last year, net revenue was recorded at 120.2 billion yen ($845 million). This figure is still the highest since the creation of the venture.
Alberto Tamura also said that international customers are paying more and more attention to Japan. According to him, against this background, activity in sphere stock trading is growing.
Morgan Stanley joins Barclays in the opinion that there is currently a trading boom in the space of the Japanese economic system. The current state of affairs is because the central bank of this country is considering significant changes in monetary policy. Japanese Prime Minister Fumio Kishida urges residents of the state to intensify investment activities.
The revival of the mentioned country’s market distinguishes this commercial space from the rest of the world. For example, there is currently less optimism on Wall Street. Moderate bonuses for traders are expected here after a decrease in income compared to the figures recorded last year.
Morgan Stanley, the investment banking giant based in New York and Japan’s largest lender, is currently working to establish closer ties between its two Tokyo-based securities joint ventures to overtake Nomura’s main competitor together.
Alberto Tamura believes that the organization he heads can become the leading securities company in the mentioned country. He noted that in this case, leadership is implied in terms of indicators such as revenue and market share. Alberto Tamura also announced plans to strengthen each line of business, without detailing these intentions.
The two companies, whose combined net revenue for the fiscal year ended March 31 amounted to 381.3 billion yen, still have a long way to go to catch up with the market leader. During the same period, the flagship brokerage unit Nomura Securities generated net revenue of 488.8 billion yen.
MUFG invested $9 billion in Morgan Stanley during the 2008 financial crisis, buying a 20% stake. After the alliance was formed, Morgan Stanley MUFG Securities and Mitsubishi UFJ Morgan Stanley Securities were created. Alberto Tamura says that these enterprises are likely to expand the scope of cooperation by starting to interact in new spheres in Japan and other countries. At the same time, he said there were no plans to merge Morgan Stanley MUFG Securities and Mitsubishi UFJ Morgan Stanley Securities
James Gorman, the outgoing CEO of Morgan Stanley, said last month that the bank’s alliance with MUFG would last at least another ten years. He praised recent steps to deepen cooperation, including combining research and equity sales in Japan for institutional clients.
Alberto Tamura says that the potential of the mentioned country is very great, noting in this context national efforts to transform the asset management industry and cajoling households to invest more of their approximately $15 trillion in financial assets. He stated that there are many opportunities in Japan in all areas of business. Alberto Tamura noted that the management in New York is aware of this potential.
As we have reported earlier, Morgan Stanley Plans to Launch AI-Powered Assistant.