Goldman Sachs (NYSE:GS) is a huge name in the investment banking and therefore its earnings results are highly anticipated by the analysts and investors in the market. The company revealed its 3^rd quarter earnings results which were higher than what Wall Street observers had predicted. However, even a profit of $1.35 per share could not rescue the bank’s stock, which is on the verge of a selling spree that has been spread all over the broader equity markets. While Dow, S&P and NASDAQ opened on a rough day, even Goldman (NYSE:GS) could not avoid dip, and its shares declined in the trading that took place on Thursday.

Goldman Sachs (NYSE:GS) revealed $8.39 billion in 3^rd quarter revenue which is a 25% increase over the revenue reported in the year-ago quarter. This number also exceeded the street consensus of $7.75 billion. The quarterly net income was revealed to be $2.24 billion, resulting in $4.57 of earning per share. The per share profit is 59% higher than the earnings per share reported in 2013, and exceeds the estimate made by analysts by 42% at $3.22 per share.

On Thursday, Goldman (NYSE:GS) chief, Lloyd C. Blankfein said that the improving economic conditions in the U.S, combined with the strong global franchise is the catalyst, driving client activities across the company’s diverse set of businesses. He also said that the conditions and sentiments can differ, but the strength of the company’s transaction backlog shows that the clients are willing to continue and execute their strategic plans for growth.

The investment banking revenues increased 26% to $1.46 billion under Goldman (NYSE:GS)’s business sectors. Institutional client services revenue went up 32% to $3.77 billion, while the revenues of investing and lending increased by 15% to $1.69 billion. In addition, the investment management revenue grew 20% to $1.46 billion. Within the institutional client services segment, the fixed income, currencies and commodities (FICC) generated the revenue of $2.17 billion, which is a 74% boost over what was considered to be a difficult 3^rd quarter by Goldman (NYSE:GS). Even though the revenues generated showed improvement, some analysts didn’t consider it to be enough.

A Citi (NYSE:C) analyst, Keith Horowitz wrote in a research note on Thursday, that although the number of revenue reported was significantly high, the source was in investing and lending, which is believed to bring softness in today’s stock. He also said that the FICC and equities were weaker than expected. FICC results were 5% lower than what Citi (NYSE:C) had expected and, were 11% lower than the 2^nd quarter of 2014.

Judging by the early morning activity, Horowitz’s prediction seems to hold ground. In Thursday’s pre-market trading section, Goldman (NYSE:GS)’s stock went as low as 3.5%, and went on to open about 3% lower than the close on Wednesday. The stock as of now is 1.8% down. A mere increase of 0.2% is seen in its year-to-date stock, which is too low to even be considered.

Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs (NYSE:GS) informed that the bank’s businesses which are appropriately diversified are being benefitted from increased client activity. This is due to the rising economic conditions in the U.S coupled with increasing strength of global franchise. He further added that the environment and motivation could change but their clients’ aspiration to follow up and accomplish their growth related strategic plans was visible from the power of bank’s transaction backlog.

In the last quarter ending Sept 30, net income attributable to common shareholders rose from last year’s $1.43 billion to $2.14 billion translating into $4.57 per share as compared to $2.88 per share last year. Three monthly dividends on each common share have also been increased to 60 cents. As per Thomson Reuters I/B/E/S, earnings of the firm were estimated as $3.21 per share on the average.

Bank’s revenue registered a healthy rise of 74 percent to $2.17 billion from its bond trading which is an infamously erratic business. This raise is attributable to stronger U.S. economic market. This raise is also due to incentives given by the European Central Bank and the unexpected departure of Bill Gross a trading superstar from the gigantic bond trading company Pimco creating strong ripples in the lethargic bond market.

However, a downward tendency has been observed since 2009 in Goldman’s (NYSE:GS)  fixed income, currency and commodities (FICC) business because of the enforcement of latest rules discouraging the banks to trade on their own book. Consequently a number of people in the banking industry are unsure of the true revival of this business. In the previous quarter, bank’s FICC business made a contribution of 26 percent of its total revenue. This is in contrast with 40 percent of annual revenue in 2009 and 25 percent in the previous year.

The revival of equity capital markets in the current year has given a significant boost to the bank as it declared that earnings from equity underwriting rose to $426 million registering a
54 percent increase. According to Thomson Reuters, Goldman managed larger deals inclusive of $25 billion IPO of Alibaba and is ranked No 1 during the initial nine months of 2014 for its equity underwriting and advisory services.

Goldman (NYSE:GS) had also declared during the quarter that it would repurchase mortgage-backed residential securities, which were bought by Fannie Mae and Freddie Mac during the period from 2005 to year 2007 at an amount of $3.15 billion. Market selloff on Wednesday saw financials as the worst affected sector on the S&P 500. Earnings reported by banks have shown mixed results like Wells Fargo (NYSE:WFC) reported in line, JP Morgan Chase (NYSE:JPM) missed its estimates and Citigroup topped the estimates.

The CEO of Symphony is the experienced communications innovator David Gurle, the intention is to centralize the communications of financial companies, corporate buyers and individuals, meaning that their entire digital communication with each other exist on the same database.

One of the most significant factors in making this platform viable is that it is an open source, meaning that users can adapt code at the back end of the technology and make it suit their individual needs. This means they can create areas within the database for compartmentalized research, trading and internal data sections.

Goldman Sachs (NYSE:GS) has long acknowledged that messaging was one of the most complex and pressing issues to be solved from within the financial industry. The company’s principal strategic investments global co-head, Darren Cohen, claimed that messaging was the financial markets’ central nervous system, however there are many information towers that communicate with each other at all. He then went on comment that Goldman had been working for some time to find a single platform to link these silos and allow them to communicate better and effectively, then extend the platform to be inclusive of external users and clients.

The emergence of Symphony is a challenge to communications networks and incumbent data on Wall Street. A number of companies including Thomson Reuters Corp, Bloomberg LP, and Markit Ltd. all run their own internal messaging systems, with the latter pair having recently worked on a joint open source messaging platform. Goldman is already operating the Symphony system and has approximately 23,000 of its employees communicating through countless messages on a weekly basis via the platform

Bloomberg call their version Instant Bloomberg and it is used widely on Wall Street. This latest announcement by Goldman Sachs (NYSE:GS) is seen by many as an attempt by them to usurp the Bloomberg version. This is not the first salvo which has been fired between the two companies, Goldman were unsettled by reports last year that Bloomberg had obtained access to some of their clients metadata from their communications with the company, though sources from inside Goldman deny that this is the case. They claim that this is a long term vision that the company has held and its viability is reflected by the number and quality of investors who are on board.

Symphony will be available to large customers in return for a variable monthly fee. The size of this fee will depend on how much data storage and infrastructure is needed by the customer. It will be free to individuals who will also get the same protections available to corporations. The beta version is due in the first quarter of next year.

At 13:10 ET Goldman Sachs (NYSE:GS) is trading at 180.85 having opened at 183.57 it traded at a 1 yr high of 187.89 and a 1 yr low of 152.72. The dividend yield is 1.22%

Meetings have already started with investors from Qatar and UAE to discuss the issuance of the sukuk. Goldman Sachs Group Inc (NYSE:GS) representatives did not comment on these developments. In 2011 Goldman Sachs Group Inc (NYSE:GS) was accused of not following Islamic principles such as monetary speculation and no interest.

After HSBC’s (HSBA.L) $500 Million issue in 2011, Goldman Sachs (GS.N) will be the second non-Islamic bank selling sukuk. Even Societe Generale (SOGN.PA) in France and Japan’s Bank of Tokyo-Mitsubishi UFJ (8306.T) are preparing for their sukuk issues in Malaysia.

Zawya the company owned by Thomson Reuters reported this year’s total sukuk issues to be $85.9 Billion with 456 global deals, which is up from last year’s total of $74.9 Billion and only 558 deals. This might seem like insignificant numbers; however they are substantial enough for borrowers in the west to join in.

Even non-Muslim governments have started issuing sukuk and the UK started this trend in June with Hong Kong, South Africa and Lexembourg all set to follow suit.

What the real controversy is…

Goldman (GS.N) tried Suksuk sales back in 2011 as well; however since it was a symbol representing all that is western, it was considered a bank that possibly would not follow Islamic principles. The most popular suspicion was dealing with money with interest and the issue of not trading at par which defies Islamic Sharia. Even with Goldman (GS.N) insisting that Islamic scholars gave the 2011 plan certification and the speculations were baseless the sukuk issue never materialized.

This time round Goldman (GS.N) isn’t taking any chances and has based its sukuk structure on a wakala instead of a murabaha. Murabaha being a cost plus selling technique is criticized for resembling financial reengineering too much. As opposed to wakala which is a technique for one party’s assets being managed by another party.

Point to note here is that HSBCs’ (HSBA.L) 2011 issue was a wakala, and along with Goldman (GS.N), Societe Generale (SOGN.PA) and Band of Tokyo-Mitsubishi UFJ (8306.T) all have chosen wakala for their issues. Reflecting this choice by Goldman (GS.N), the market indications point towards a more favourable response.

Islamic Finance will greatly benefit by the involvement of these big western institutions by giving them an immediate access to an immensely large investor base and innumerable experts involved in developing these Islamic instruments.

The Shariah advisorys’ chairman Daud Bakar under the Malaysia Central Bank advises Goldman (GS.N) towards full disclosure on the underlying project.

Investor meetings included Goldman Sachs (GS.N), the Abu Dhabi Islamic Bank (ADIB.AD), the National bank of Abu Dhabi (NBAD.AD), Emirates NBD (ENBD.DU) and Saudia Arabias’ National Commercial Bank’s (IPO-NACO.SE) investment banking division. The vehicle which shall be used for the issue is JANY Sukuk Co with Goldman Sachs (GS.N) guaranteeing it. The issue will have the same ratings as the investment bank, an A- by S&P and an A by Fitch.

The settlement was announced by the Federal Housing Finance Agency which is the conservator for Fannie and Freddie.

Under the settlement, Goldman Sachs Group Inc (NYSE:GS) agreed to repurchase the faulty securities from the two government controlled finance companies for $3.15 billion.

The Federal Housing Finance Agency announced that after subtracting the estimated current value of the securities, the Goldman Sachs Group Inc (NYSE:GS) now owes $1.2 billion to Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac had filed a lawsuit against Goldman Sachs Group Inc (NYSE:GS) under which the investment bank had to appear in court in September. This lawsuit was filed in 2011 and aimed to recover damages worth $200 billion from a number of financial institutions. However, now that Goldman Sachs Group Inc (NYSE:GS) has agreed to pay $1.2 billion, the company does not need to appear in court in September.

As far as other financial damages were concerned, Federal Housing Finance Agency has resolved 15 of the lawsuits and has recovered $17.3 billion for Fannie Mae and Freddie Mac. These 15 included banks like Bank of America Corp (NYSE:BAC) and Morgan Stanley (NYSE:MS). Now, only 3 cases are left to be resolved which include accusations against HSBC Holdings Plc (NYSE:HSBC) and Nomura Holdings Inc. (NYSE:NMR)

According to officials of Federal Housing Finance Agency, the case against Goldman Sachs Group Inc (NYSE:GS) was a very crucial one as the bank sold faulty securities for over $1.11 billion to a number of finance companies of US between 2005 to 2007.

Even after agreeing to pay for settlement, the investment bank has refused to admit to any of the accusations. Of the total $3.15 billion that the bank owes, $1 billion will be paid to Fannie Mae while $2.15 billion will be paid to Freddie Mac.

The costs of this deal would be covered by litigation reserves of the bank for the second quarter of the current fiscal year. Moreover, to resolve accusations of marketing faulty securities in 2010, Goldman Sachs Group Inc (NYSE:GS) has signed a settlement deal of $550 million with the U.S. Securities and Exchange Commission.

Although, the investment bank has agreed to pay, the U.S. Department of Justice has decided to continue investigation of the matter to find out the bank’s marketing strategies for selling faulty securities. Recently, the department announced a settlement worth $16.65 billion with the Bank of America Corp (NYSE:BAC) over selling of faulty bonds.

According to the General Counsel Executive of Goldman Sachs Group Inc (NYSE:GS), the resolution of this issue has been a great relief.

According to the sources, a unit of Goldman Sachs Group Inc (NYSE:GS), has recently put forward a deal of around 165 billion yen for an office building, known as the Pacific Century, in the region of Tokyo. The deal price comes to a total of $1.6 billion, and sources have it that it can prove to be the biggest property deal made by the company over the last six years.

The seller of the said property is Secured Capital, a part of PAG. PAG bought the company in 2009 for a total of 144 billion yen. The property is a 32 storey high building, located near the railway station of Tokyo.

It is important to note here that the investors and financers are madly acquiring properties as the chances are that the prices will go up in the future in lieu of Prime Minister’s fiscal and monetary growth policies.

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Some other multinational companies, including Angelo Gordon & Co- a New York company- and Orix Corporation- a Japan based company- are also looking for their office sites in Tokyo. The companies have put forward a deal of 40 billion yen.

According to the news, the deal that the unit of Goldman Sachs Group Inc (NYSE:GS), Goldman Sachs Asset Management, put forward is being considered against the two rival bids. The sellers screened the initial bids; and sources have it that Secured Capital will grant the exclusive rights for negotiations of the deal to one final bidder.

The names of the competing bidders have not been released yet. Moreover, Goldman Sachs Group Inc (NYSE:GS) refused to comment on the deal.  The spokesperson of Secured Capital was also unavailable to comment.

The bids on the Tokyo office building are reported to be the biggest office site deals in the country of Japan over the last six years. Initially, Secured Capital tried to get bids of 180 billion yen; however, 165 billion yen was the most that it could get.

The office building was constructed in 2001 and it was purchased by K.K. daVinci Holdings for a total of 200 billion yen, during the year 2006 when the property market was at its peak in Japan.

In 2008, when Japan faced global crisis in the real estate industry and K.K. daVinci failed to pay its installment on time, Shinsei Bank Ltd got hold on the rights of the building.

Pacific Century is situated in the Chiyoda ward region of Tokyo where the vacancy rates remain the lowest and the rents are reported to be the highest.

Coming to the stock prices of Goldman Sachs Group Inc (NYSE:GS), the company, on the last trading day, August 13, 2014, opened its stocks at a price of $172.40 and closed at a price of $172.37, after hitting the highest figures of $172.89. The company has a market capitalization of $75.94 billion and a price to earnings ratio of 6.94. As far as the dividend yield of Goldman Sachs Group Inc (NYSE:GS) is concerned, the numbers are reported to be around 1.28 percent.