Boston, MA 10/30/2013 (wallstreetpr) – As reported by Wall Street Journal, on Tuesday, October 29, the financial giant had announced that it plans to ask the U.S. Federal Reserve for approval to increase its $500 million shares buy-back program. Earlier this year it sought and got the approval for buying back $500 million worth of its own shares. Now it wants to buy back more of its shares thereby increasing its percentage of stake in the company.
The move is to be completed in the next year. This development is seen as a contemplated move to increase its return on equities. The plan to buy back comes close on the heels of completing its purchase of brokerage deal with Citigroup. Morgan Stanley has decided to go with more buy back as the management felt that this move was better for the company rather than offering dividends for its shareholders. More details of the newer buy back is yet to be revealed as the company has already used $123 million of the $500 million that was generated as of the end of third quarter.
Morgan Stanley is less likely to default on its debt
After the announcement of the Q3 13 earnings report on October 18, not only has the company’s shares risen but also estimated by analysts that investing in the company as less risky. The cost of buying a Morgan Stanley (NYSE:MS) credit default swap, which equates to insurance over the firm’s debt, has decreased than that of Goldman Sachs’, according to Fox Business Network. This survey increases the risk management capabilities of Morgan Stanley’s top leadership thus increasing the confidence of all the stakeholders and the investors.
Market performance
One can see a marked increase in the share price of the shares of this company from October 18. On that day, the market open price was close to $30 and after a variety of crests and lows the price has settled at $29.36 as of close of Tuesday, October 29.
