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Morgan Stanley reported better-than-expected profits in the third quarter, driven by a strong performance in investment banking that also lifted its stock to a record high. The revival in corporate debt issuance, initial public offerings (IPOs) and mergers has contributed to the profits of Wall Street banks this year. With markets near record highs and the U.S. Federal Reserve easing its policies, there is optimism among bankers that mergers and acquisitions (M&A) will continue to pick up after a slow period.

Morgan Stanley’s CEO Ted Pick expressed confidence in the future of IPOs and M&A during a conference call, expecting larger companies to be involved in these deals. The bank’s stock saw a significant increase, reaching a record high in morning trading.

The bank’s profit exceeded analyst estimates, driven by a 56% jump in investment banking revenue in the third quarter. Across the industry, global investment banking revenue has risen by 21% in the first nine months of the year, with North America leading the surge.

Morgan Stanley has been a lead underwriter on major IPOs in the quarter and has seen increased activity in equity capital markets. The institutional securities business, which includes investment banking and trading, generated higher revenue compared to the previous year.

Under the leadership of former CEO James Gorman, Morgan Stanley expanded into wealth management to ensure stable revenue and reduce volatility. The wealth management division saw an increase in revenue and added net new assets, bringing total client assets to $7.5 trillion.

Overall, the bank’s strong performance in investment banking and wealth management has contributed to its positive results in the third quarter. With a focus on client assets and revenue growth, Morgan Stanley is on track to achieve its target of managing $10 trillion in client assets.

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