Morgan Stanley surges ahead for announced deals

The bank's second-quarter advisory revenue, announced last month, was also looking healthy, up 10% to $357 million when other banks, including Goldman, saw a drop in advisory revenue in the quarter.

Ji-Yeun Lee, chief operating officer of Morgan Stanley's mergers and acquisitions department in New York, says the strong global market share shows the momentum of the bank's advisory business across all regions and sectors and the importance of combining strong client relationships with product expertise. "There's always a bit of a time lag, but this shows the effort we have been putting into client relationships for a long time," he says.

The bank's performance is particularly impressive given the uncertainties over the leadership of the bank and a senior departure from its mergers and acquisitions business. Raymond McGuire, one of the bank's co-heads of global M&A, left in late May to join Citigroup to become co-head of global investment banking.

Can the bank retain its number one position, ahead of Goldman, until the end of the year? A look at the league tables for the hotly contested north American market shows that in the year to date for announced transactions, the difference between the two is marginal by deal volume or deal number. One banker at a competitor says that although Morgan Stanley's advisory business shows no sign of suffering yet, it could do if they lose more of their longest-serving relationship bankers. "It takes an awful lot to damage a franchise but the tide could be about to turn."

However, Lee is bullish about the bank's prospects for the next six months. "When we look at the second half of the year and our pipeline, we feel pretty good about it." She thinks there will be increased private-equity activity, more split-ups and spin-offs of companies and more hedge fund induced shareholder activism.