This is positive news for distribution stocks
, in our view, since we believe privatisation is the key driver for MRSKs.
Net purchases were up substantially in August as foreign portfolio investment in domestic bank and distribution stocks
increased steadily and technology stocks were buoyed by expectations of an IT industry recovery.
Drug distribution stocks
may seem cheap to some after this tumble, but investors may want to tread warily.
Overall we view the news as moderately negative for MOESK and electricity distribution stocks
company-specific risks, which results in either major upside or major downside in the majority of electricity distribution stocks.
Despite the significant cuts to our target prices we continue to rate most of the distribution stocks a BUY, primarily due to their weak share price performance in recent months.
As a result we see major upside Co or downside eAE in most electricity distribution stocks
Nevertheless at current price levels we still see significant upsides and rate 10 out of 14 electricity distribution stocks
0%) our valuation implies 103% average upside potential for distribution stocks
Our revised forecasts for the distribution stocks incorporate our strategy team's 50 bpts reduction in our Russian base cost of equity and our economics team's latest estimates, which include a 4.
Our lack of enthusiasm for the generation segment means that we recommend that investors seeking exposure to the Russian utilities sector rebalance their portfolios towards distribution stocks.
We thus reiterate BUY ratings on nine out of the 14 electricity distribution stocks, and upgrade Lenenergo ordinary shares from SELL to HOLD on valuation grounds.