* Investment banking business revenue up 36%

* Equities trading revenue hits record $5.15 billion

* Shares up 2.8% premarket

(Updates with comparisons and details throughout)

By Utkarsh Shetti

April 15 (Reuters) - Morgan Stanley ( MS ) beat Wall

Street expectations for first-quarter profit on Wednesday, as

the investment bank benefited from a surge in dealmaking and

raked in record revenue from its equities trading business.

Heightened M&A activity in a friendlier regulatory

environment and extreme volatility in stock markets triggered by

the recent software selloff and the Iran war have bolstered

investment banking and trading businesses at big Wall Street

banks.

Morgan Stanley's ( MS ) investment banking revenue soared 36% to

$2.12 billion, boosted by a rise in advisory fees. Revenue from

its equities trading business also jumped 25% to a record $5.15

billion, while that from fixed income surged 29% to $3.36

billion.

Peers Goldman Sachs ( GS ), JPMorgan ( JPM ) and Citigroup ( C )

also reported a surge in investment banking and trading

revenue in the latest quarter.

Deal volumes globally have already hit $1.38 trillion in the

latest first quarter, according to data compiled by Dealogic,

after a near record-breaking 2025 in which global M&A surpassed

$4.81 trillion.

Among the notable deals in the first quarter, Morgan Stanley ( MS )

was one of the advisers to Unilever ( UL ) on the proposed

merger of its food business with McCormick ( MKC ) that will

create a $65 billion global food behemoth.

Shares of the Wall Street giant rose 2.5% in premarket

trading.

EQUITIES TRADING RAKES IN RECORD REVENUE

Global markets have swung sharply in recent weeks as the

Iran war drove up oil prices and fueled worries that inflation

could stay elevated for longer.

The volatility across asset classes has prompted investors

to rebalance portfolios and increase hedging against potential

losses, a trend that typically boosts activity at trading desks.

Meanwhile, heightened tensions in the Middle East have

unsettled equity markets and dampened risk appetite, weighing on

the IPO market, though some companies, particularly in the

industrial and defense sectors, have continued to pursue

listings.

Morgan Stanley ( MS ) is among the bookrunners leading the deal on

SpaceX's bumper IPO, where the Elon Musk-led firm could raise

$75 billion at a potential valuation of $1.75 trillion.

Top bosses at investment banks have cautioned that the

market for new listings has become more selective as a result of

the economic uncertainty, but expect a rebound once conditions

stabilize.

Total quarterly revenue at Morgan Stanley ( MS ) rose to $20.6

billion in the first quarter from $17.7 billion a year earlier.

The Wall Street investment bank's profit came in at $3.43

per share, surpassing the $3 per share expected by analysts,

according to data compiled by LSEG.