UPDATE 2-MSCI Q2 profit up; sees pressure on client retention

jueves 2 de julio de 2009 20:57 CEST

* Q2 profit rises but retention rate slips

* Spending cuts hit asset manager, broker-dealer categories

* Plans to hire about 100 people, mostly in emerging markets (Adds details from conference call, background, updates share price)

July 2 (Reuters) - MSCI Inc MXB.N, the investment analysis and market index company, posted a 5 percent rise in quarterly profit, helped by higher revenue related to equity indexes and lower expenses, but warned that its client retention rate remains under pressure.

The core retention rate was 89.5 percent for the second quarter compared with 91.9 percent a year earlier, and the company sees the rate staying under pressure in the coming quarters.

Though it added 18 new clients on a gross basis for its equity analytics products in the period, the highest number since the third quarter of 2007, "lower retention rates are more than offsetting the new sales activities", the company said.

Revenue related to equity portfolio analytics products fell 7 percent to $31.6 million in second quarter.

"The weakness is more evident in the asset manager category where spending cuts have continued and in the broker-dealer category where a number of firms have scaled back their proprietary trading activities," Chief Executive Henry Fernandez said on a conference call with analysts.

The company said client cancellations totaled about $11 million in the quarter.   Continuación...