Morgan Stanley's Kelleher Can't Wait for Electronic Bond Trading

(Bloomberg) -- Morgan Stanley, the top equities shop on Wall Street, is ready for dealing bonds to look more like trading stocks.

“We can’t wait for fixed income to go electronic,” Colm Kelleher, the bank’s president, said Tuesday at a Morgan Stanley conference in London. “Technology is our friend.”

About 80 percent of U.S. bond deals are still done by phone or over a chat service. While some banks worry that their margins will compress as the trading process becomes more digitized, Kelleher said his firm’s ability to utilize new technologies will give it an edge. About 95 percent of equity trading in the U.S. is already electronic, he said. In Europe, its around 87 percent.

Read More: Electronic Bond Trading Gains Ground as Market ‘Finally’ Matures

Sam Kellie-Smith, who helped lead Morgan Stanley to the top Wall Street spot equities revenue, was picked to revamp the fixed-income business in 2016. The New York-based bank’s bond traders posted the smallest drop in revenue among the biggest Wall Street firms last year.

“I don’t expect you to see big down days in fixed income anymore,” Kelleher said. “And that’s clearly the most volatile business we have.”

To contact the reporter on this story: Sonali Basak in New York at sbasak7@bloomberg.net.

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Heather Perlberg

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