BEIJING/HONG KONG (Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) chief executive James Gorman wasn’t going to miss his chance.

It didn’t matter that he was on holiday. Gorman dropped everything and flew to Beijing last April. He wanted to show up in person to make sure his firm got a piece of what was shaping up to be the biggest initial public offering in history.

In Beijing, Gorman spent hours rehearsing with his team for a half-hour pitch to executives of Agricultural Bank of China (601288.SS: Quote, Profile, Research, Stock Buzz)(1288.HK: Quote, Profile, Research, Stock Buzz), whose IPO would eventually raise $22 billion.

“For a half-hour bake-off, he came all that way,” Wei Christianson, Morgan Stanley’s China CEO, said in an interview last month from her office near Financial Street in Beijing.

As he practiced, the Australian-born CEO debated with colleagues about whether the Chinese bankers would want to hear his stories about farming in the outback.

Gorman was not the only top Wall Street executive looking to get in on the AgBank deal. JPMorgan (JPM.N: Quote, Profile, Research, Stock Buzz) CEO Jamie Dimon and Deutsche Bank CEO (DBKGn.DE: Quote, Profile, Research, Stock Buzz) Josef Ackermann also went to China to make their pitch, and in the end all three banks secured an underwriting assignment for the bank’s Hong Kong offering.

For a while at least, with their eyes dead set on the AgBank pot of gold, global bankers could set aside concerns about the challenges they face in China, a market they are desperately trying to crack but where they are finding more setbacks than successes.

BEIJING/HONG KONG, Oct 26 (Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) chief executive James Gorman wasn’t going to miss his chance.

It didn’t matter that he was on holiday. Gorman dropped everything and flew to Beijing last April. He wanted to show up in person to make sure his firm got a piece of what was shaping up to be the biggest initial public offering in history.

In Beijing, Gorman spent hours rehearsing with his team for a half-hour pitch to executives of Agricultural Bank of China (601288.SS: Quote, Profile, Research, Stock Buzz)(1288.HK: Quote, Profile, Research, Stock Buzz), whose IPO would eventually raise $22 billion.

“For a half-hour bake-off, he came all that way,” Wei Christianson, Morgan Stanley’s China CEO, said in an interview last month from her office near Financial Street in Beijing.

As he practiced, the Australian-born CEO debated with colleagues about whether the Chinese bankers would want to hear his stories about farming in the outback.

Gorman was not the only top Wall Street executive looking to get in on the AgBank deal. JPMorgan (JPM.N: Quote, Profile, Research, Stock Buzz) CEO Jamie Dimon and Deutsche Bank CEO (DBKGn.DE: Quote, Profile, Research, Stock Buzz) Josef Ackermann also went to China to make their pitch, and in the end all three banks secured an underwriting assignment for the bank’s Hong Kong offering.

For a while at least, with their eyes dead set on the AgBank pot of gold, global bankers could set aside concerns about the challenges they face in China, a market they are desperately trying to crack but where they are finding more setbacks than successes.

NEW YORK (Reuters) – Kohlberg Kravis & Roberts is hiring part of Goldman Sachs Group Inc’s (GS.N: Quote, Profile, Research, Stock Buzz) proprietary trading team, which is being shut down due to new restrictions on such trading.

KKR (KKR.N: Quote, Profile, Research, Stock Buzz) is hiring about nine Goldman traders, led by Bob Howard, who heads Principal Strategies for Goldman’s U.S. business. The team will be part of KKR’s asset management unit, which manages $13 billion, and will join early in 2011.

KKR is likely to launch a long/short hedge fund next year, a source familiar with the situation said.

Goldman’s proprietary trading desk was in jeopardy in light of the “Volcker rule,” which limits the extent to which banks can bet with their own capital.

Goldman, in a statement, lauded the “strong performance record with a culture of disciplined risk management” of its former Principal Strategies business.

KKR co-founders Henry Kravis and George Roberts said in an emailed statement that the move is part of a strategic build-out of its asset management platform.

“Our goal has been to add new capabilities and exceptional talent that allow us to strengthen our product offering and better service our clients,” they said. “Bob and his team will be an ideal fit for that objective as we’ve been impressed with their investment experience and performance as well as their ability to manage risk.”

NEW YORK (Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research) reported a surprising third-quarter loss, suggesting the bank is losing hard-won ground in the battle with Goldman Sachs (GS.N: Quote, Profile, Research) for Wall Street supremacy.

The firm’s $91 million (57 million pound) loss, on weak volumes during one of the most difficult trading quarters in recent memory, came a day after Goldman overcame those same conditions to beat Street estimates with a $1.9 billion profit.

Morgan Stanley shares fell 3.5 percent in morning trading.

“Morgan Stanley is a caterpillar in metamorphosis. It’s either going to turn into a beautiful butterfly or get eaten by a robin,” said Brad Hintz, an analyst with Sanford C. Bernstein.

“You could look ahead and say I’m going to like the future Morgan better than I’m going to like the future Goldman, but you’re still going to have a period that’s pretty rough on the stock.”

Morgan Stanley has been playing catch-up with its arch-rival since the financial crisis. In 2009, Goldman cashed in on windfall trading opportunities to report a record annual profit, while Morgan Stanley, which scaled back risk, reported a loss.

The leading investment banks have gone in different directions since the financial crisis: Morgan Stanley has rebalanced its business to include the largest retail brokerage, while Goldman has stuck to its banking and trading roots.

NEW YORK (Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) reported a surprising third-quarter loss on Wednesday as weak volumes battered its trading businesses.

On a per-share basis, income from continuing operations was 5 cents, well below analysts’ average forecast of 15 cents, according to Thomson Reuters I/B/E/S.

“They’re disappointing, after good results from Citi and JPMorgan, said Cormac Leech, analyst at Canaccord Genuity. “The biggest disappointment was in fixed income and equities.”

Fixed income sales and trading revenues were $846 million, down 57 percent from a year earlier.

The bank reported a net loss applicable to shareholders of $91 million, compared with a profit of $498 million a year earlier.

Morgan Stanley said its results reflected a loss of $229 million on a writedown related to the disposition of Revel Entertainment Group, a hotel and casino project in Atlantic City, New Jersey.

Its global wealth management business did not offer much relief, reporting net revenues of $3.1 billion, up just 1 percent from a year earlier. [ID:nN20246987] Morgan Stanley said lower levels of client activity weighed on its retail brokerage results.

NEW YORK, Oct 20 (Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) reported a surprising third-quarter loss on Wednesday as weak volumes battered its trading businesses.

On a per-share basis, income from continuing operations was 5 cents, well below analysts’ average forecast of 15 cents, according to Thomson Reuters I/B/E/S.

“They’re disappointing, after good results from Citi and JPMorgan, said Cormac Leech, analyst at Canaccord Genuity. “The biggest disappointment was in fixed income and equities.”

Fixed income sales and trading revenues were $846 million, down 57 percent from a year earlier.

The bank reported a net loss applicable to shareholders of $91 million, compared with a profit of $498 million a year earlier. (For a table of Morgan Stanley results, see [ID:nN20186835].)

Morgan Stanley said its results reflected a loss of $229 million on a writedown related to the disposition of Revel Entertainment Group, a hotel and casino project in Atlantic City, New Jersey.

Its global wealth management business did not offer much relief, reporting net revenues of $3.1 billion, up just 1 percent from a year earlier. [ID:nN20246987] Morgan Stanley said lower levels of client activity weighed on its retail brokerage results.

NEW YORK (Reuters) – Goldman Sachs generated more than one-fifth of its third-quarter earnings from private equity and real estate investments, a mostly overlooked fact as investors focused on the bank’s trading profit.

Private equity investments have long helped banks generate big profits, but in the future banks won’t be able to rely on them: a new law severely curtails the ability of banks to invest their own money in areas like leveraged buyouts.

Goldman’s (GS.N: Quote, Profile, Research) reliance on private equity shows just how hard it will be for the bank to boost profits in the future.

The bank posted $635 million of gains from corporate principal investments, which after taxes is about $425 million, or about 24 percent of the bank’s $1.74 billion shareholder profit.

The bank’s portfolio of principal investments grew during the quarter to $15.3 billion from $14 billion in the second quarter. It is unclear if Goldman added investments to the portfolio or if some holdings appreciated in value. A Goldman spokesman declined to comment.

But what’s interesting is that the private equity portfolio is growing in a time when the company is working to comply with new U.S. regulations limiting how big banks use their own capital, analysts said

Under the so-called Volcker Rule, Goldman will be required to sell off some of the $15.3 billion portfolio in coming years.

NEW YORK (Reuters) – Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) generated more than one-fifth of its third-quarter earnings from private equity and real estate investments, a mostly overlooked fact as investors focused on the bank’s trading profit.

Private equity investments have long helped banks generate big profits, but in the future banks won’t be able to rely on them: a new law severely curtails the ability of banks to invest their own money in areas like leveraged buyouts.

Goldman’s reliance on private equity shows just how hard it will be for the bank to boost profits in the future.

The bank posted $635 million of gains from corporate principal investments, which after taxes is about $425 million, or about 24 percent of the bank’s $1.74 billion shareholder profit.

The bank’s portfolio of principal investments grew during the quarter to $15.3 billion from $14 billion in the second quarter. It is unclear if Goldman added investments to the portfolio or if some holdings appreciated in value. A Goldman spokesman declined to comment.

But what’s interesting is that the private equity portfolio is growing in a time when the company is working to comply with new U.S. regulations limiting how big banks use their own capital, analysts said

Under the so-called Volcker Rule, Goldman will be required to sell off some of the $15.3 billion portfolio in coming years.

NEW YORK (Reuters) – Wall Street’s third-quarter trading drought may have had more bark than bite.

Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) reported that net trading revenues fell by more than a third in the quarter, but the firm’s profits still beat analysts’ estimates.

Trading volumes sank as nervous investors stayed on the sidelines after the “flash crash” and amid volatile markets. Goldman’s trading performance was “not bad, all things considered,” wrote Ticonderoga analyst Douglas Sipkin.

Third-quarter shareholder net income fell to $1.9 billion, or $2.98 a share, from $3.19 billion, or $5.25 a share, a year earlier, hurt by the decline in trading revenues.

But the earnings topped analysts’ average forecast of $2.32 a share, according to Thomson Reuters I/B/E/S.

While Goldman’s numbers were down from a year ago, the firm still looked strong compared to some banking rivals who have been rattled by the foreclosure crisis.

“Even though expectations were lower and even though the EPS numbers were reduced dramatically in the past couple of weeks, it’s still a much more positive release than many of their competitors,” said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel Inc.

WASHINGTON/NEW YORK (Reuters) – A growing crisis over shoddy foreclosure documents deepened on Thursday as investors dumped stock in some of the biggest U.S. banks on fears their profits could be hit.

At risk is not just the health of the banks but also the fragile housing market and the broader economy, which is still struggling to emerge from the worst recession since the 1930s, analysts warn.

All 50 U.S. states have started a joint investigation of the mortgage industry, focusing on allegations that for years banks have not reviewed documents properly or have submitted false statements to evict delinquent borrowers.

The investigation, one of the biggest legal probes of the mortgage industry in decades, has alarmed investors who fear cleaning up the foreclosure paperwork mess could take months, even years.

The fiasco threatens to eat into bank profits by delaying sales of bank-owned properties, drawing fines from regulators, and spawning lawsuits from both homeowners and investors in mortgage-backed securities.

The KBW Banks index dropped 2.6 percent on Thursday while the broad Standard & Poor’s 500 index fell just 0.4 percent.

Bank of America, the largest U.S. mortgage servicer, has temporarily halted evictions nationwide. JPMorgan Chase and others have halted some foreclosures pending reviews, while some have left foreclosure policies in place.