Goldman, Morgan Report Strong Commodity Results

Joseph Keefe
Thursday, April 17, 2014

Goldman says commodity revenue significantly higher; Morgan Stanley says "strong performance" bolstered FICC. Both banks may be benefiting from rivals scaling back.


Goldman Sachs and Morgan Stanley both reported stronger net revenue in commodities trading during the first quarter on Thursday, as the two longest-serving banks in the sector took on more risk and benefited from rivals scaling back.

Goldman said "significantly higher" net revenue in natural resources trading compared with early 2013 had helped offset lower returns across the rest of its Fixed Income and Commodities (FICC) business, while Morgan Stanley said a "strong performance" in commodities had helped boost FICC net revenue to $1.7 billion from $1.5 billion.

Commodities results on Wall Street have been under pressure in recent years due to restrictions on trading with banks' own money, rising capital requirements, and signs the so-called commodities supercycle may have peaked.

While one quarter does not necessarily reverse a trend, Thursday's results may illustrate how Goldman and Morgan Stanley are benefiting from rivals exiting or scaling back in the sector, including one-time top five firms like JPMorgan Deutsche Bank.

The top 10 banks in commodities made $4.5 billion from natural resources trading in 2013, a report from UK analytics firm Coalition showed earlier this year.

While significantly below the near $14 billion made by banks in commodities in 2008, it still represents a sizeable chunk of Wall Street's overall earnings.

Both Goldman and Morgan Stanley reported an increase in commodities exposure known as Value-at-Risk (VaR) from the last quarter, with Goldman raising its VaR to $21 million, the highest in a year.

Morgan Stanley increased its commodity VaR to $20 million from $18 million, despite preparing to sell its merchant oil trading business to Russian energy major Rosneft.

Goldman's overall FICC revenue fell 11 percent to $2.85 billion from the same period last year.


By David Sheppard

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Barge Operator Fined for Releasing Dangerous Gas

The operator of a Portsmouth-based barge has today been made to pay almost £111,000 in fines and costs after pleading guilty to a breach of maritime legislation.

Charterers Remain Optimistic Despite Small Downturn

Overall confidence levels in the shipping industry fell slightly during the three months to August 2014, according to the latest Shipping Confidence Survey from

Insights: New York Canal Director Brian Stratton

Brian U. Stratton was appointed Director of the New York State Canal Corporation in April 2011, to oversee the operation and development of New York’s 524-mile Canal System,

Energy

In Support of Affordable Energy

As its key mission, Waterways Council, Inc. (WCI) advocates for a modern and well-maintained system of inland waterways and ports. WCI’s top issues areas include

ICS: Global Shipping's Emissions 20% Lower

The total Green House Gas emissions from global maritime transport are estimated to have been more than 20% lower in 2012 than in 2007, according to the International Chamber of Shipping (ICS),

Rosneft, ExxonMobil Continue Drilling for Now

Russia's Rosneft and U.S. ExxonMobil are continuing to drill in the Kara Sea and plan to stop work by Oct. 10, Russian Deputy Energy Minister Kirill Molodtsov said on Tuesday.

Offshore Energy

Two More Damen Twin Axe Catamarans for SeaZip

Damen Shipyards and SeaZip Offshore Service signed another contract for two Damen Fast Crew Suppliers (FCS) 2610 at Wind Energy in Hamburg. The two new vessels,

Rosneft, ExxonMobil Continue Drilling for Now

Russia's Rosneft and U.S. ExxonMobil are continuing to drill in the Kara Sea and plan to stop work by Oct. 10, Russian Deputy Energy Minister Kirill Molodtsov said on Tuesday.

Transocean's Chairman Designate 2015 Named

Transocean Ltd. informs that at its recent Extraordinary General Meeting Merrill A. "Pete" Miller, Jr. was nominated as a director and the Board intends to designate him as vice-chairman,

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2727 sec (4 req/sec)