This morning heralds the production of a substantial 76 page report from Morgan Stanley and Oliver Wyman on the, ‘Outlook for Global Wholesale and Investment Banking.’

In some ways, it makes for glum reading: they’re predicting a 10-15% fall in underlying revenues, partially offset by reduced markdowns; enduringly low compensation ratios; and the possibility of an 8% fall in ROE in response to regulatory changes, resulting in “dramatic industry downsizing and margin expansion.”

However, the bleakness is broken by a few favourable predictions. With 2010 expected to be a, ‘pivotal year for investment banks,’ in which ‘global securities markets undergo profound cyclical and structural change,’ some sectors and institutions are expected to thrive more than others.

If Morgan Stanley and Oliver Wyman are right, here’s where you should be orientating your career, both in 2010 and longer term:

1) Flow monsters

As spreads narrow and margins tighten, MS and Oliver Wyman are predicting that so-called ‘flow monsters’ with electronic trading platforms, ‘scale, leading edge technology and outstanding risk management in key categories’ will prevail in equities and fixed income trading.

In fixed income currencies and commodities (FICC) sales and trading think market leaders Goldman Sachs, Citigroup, JP Morgan, BofA Merrill Lynch, Deutsche and BarCap.

In equities sales and trading think Goldman Sachs, Credit Suisse, SocGen, Deutsche, JPMorgan, and Bank of America Merrill Lynch.

2) Rates and FX

Although FICC revenues are expected to fall 20-25% this year, rates and FX are predicted to have an ok 2010. There won’t be the huge gains from steepening yield curves, but there will be macro-level volatility and government debt issuance. This year is thought to have started well for both business areas.

3) Emerging markets

Despite the disasters of Dubai and Greece, emerging markets are expected to remain a growth story this year and in future. MS and Oliver Wyman are predicting 10% emerging markets related revenue growth in 2010, based on increased local client sophistication and regional economic growth.

The bad news is that London’s role as an emerging markets centre is expected to wane, with new EM teams more likely to be located in Asia or New York.

4) Commodities

Commodities businesses aren’t expected to have a great 2010, with revenues predicted to fall 5% as oil prices correct and metals decline. Longer term, however, commodities are predicted to remain a growth story, based on increased demand from China, new tradable products and the need for huge investment in commodities production, storage, and transmission infrastructure in Asia and emerging markets.

Banks are also expected to continue building their commodities teams.

5) Equity derivatives

Last year, Morgan Stanley and Oliver Wyman estimate that equity derivatives revenues rose 100%. This year they’re predicting a more modest 15% increase, based on growth in retail investment products, institutional demand for vanilla equity derivative products and opportunities linked to corporate and banking equity issuance.

6) Electronic trading

We noted yesterday that anything related to electronic trading is hot. MS and Oliver Wyman confirm that the push to cut costs and build volume will ensure that electronic trading remains key in flow businesses for the foreseeable future.

As a corollary, they also predict ‘down-skilling’ in other areas, such as flow sales.

7) Hedge funds

Hedge funds are expected to have a good year in 2010, with assets under management predicted to return to levels of the first half of 2007. The biggest growth is expected to come from private clients accessing risk adjusted return or UCITs III products

8) Large M&A boutiques

If you work in M&A, large advisory boutiques like Greenhill, Evercore, Lazard, or Moelis may be the place to go. MS and Oliver Wyman are predicting that Lazard and Greenhill alone will boost their share of global M&A from ~11% in 2006 to ~16% in 2010. This is partly down to hiring: they point out that Greenhill plans to almost double its MD headcount from 35 at the end of 2007 to 69 at the end of 2010.

9) Post trade servicing

Few people get rich from working in post trade servicing, but it’s definitely a growth area.

Banks are predicted to invest heavily in post trade clearing and asset servicing capabilities this year. This is largely to prepare for changes to the OTC derivatives market, where up to 85% of trades are expected to move to centralised clearing systems in the next few years.

10) Corporate cash management

Few people get rich from working in corporate cash management either. However, this is also predicted to be a growth area, largely because managing corporates’ cash is a way for banks to enhance their deposit base by locking in companies’ funds.