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Wall Street and commodity risk - Morgan Stanley measure slips 

July 22, 2016

Josephine Mason & Jeffrey Benkoe, Reuters

Morgan Stanley Inc's commodity trading risk measure, known as Value at Risk (VaR), fell to its lowest in at least three years in the quarter through June, the bank said on Wednesday, as the Wall Street bank reported higher commodities revenue.

The bank's daily average VaR indicator was $10 million in the second quarter, down $1 million from the previous quarter and compared with $16 million a year earlier.

The VaR is a risk-reward indicator that measures the commodities exposure of Wall Street banks.

Earlier Wednesday Morgan Stanley reported better-than-expected quarterly results boosted by bond trading revenue.

Fixed income and commodities sales and trading net revenues totaled $1.3 billion, up from $873 million in the prior quarter and almost unchanged from last year, even after selling its oil merchant business in the fourth quarter of 2015.

Wall Street banks typically group commodities revenue under the fixed income category and do not break out the sector. Read more

 
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