Morgan Stanley chief executive James Gorman said that the bank's stock is still valued as though it is a "pure trading company", even as it announced another bumper acquisition to diversify its business away from its traditional investment banking roots.

Gorman, who was speaking to analysts on a conference call unveiling Morgan Stanley's $7bn cash and shares deal to buy US investment management firm Eaton Vance, said the firm's stock price "makes absolutely no sense". The deal is the latest in a string of transactions by Morgan Stanley that moves the bank away from its reliance on more volatile investment banking revenues. These include the $13bn acquisition of online brokerage ETrade, which closed last week.