On the other hand, positive contribution was led by fertiliser stocks (up 132 points) on account of higher urea prices amidst shortage, tobacco stocks (87 points) and power generation and
distribution stocks (81 points).
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.
(LAS871) GAS
DISTRIBUTION STOCKS: DAVID MACCARRONE - GOLDMAN SACHS & CO.
Overall we view the news as moderately negative for MOESK and electricity
distribution stocks in general.
(GAE852) DRUG
DISTRIBUTION STOCKS. KRISTI THIESE of RAYMOND JAMES & ASSOCIATES reviews the performance of the DRUG DISTRIBUTION industry, and examines recent changes that have impacted companies in that sector.
company-specific risks, which results in either major upside or major downside in the majority of electricity
distribution stocks.
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 a BUY.
Electricity
distribution stocks are the core investment.
Even under our rather conservative assumptions (transition to RAB from 2012, WACCs of 15.5-20.0%) our valuation implies 103% average upside potential for
distribution stocks. We therefore anticipate that at some point during the next weeks/months, when disheartened investors exit the segment, a very lucrative opportunity may arise to enter the MRSKs' sound investment story.
