FW: More Sector Thoughts After the WTC/Pentagon Disasters/Kit Konolige/MS  Electric Utilities Research -----Original Message----- From: 	Courtney Cleman  Sent:	Monday, September 17, 2001 8:32 AM To:	kkonolig@ms.com Subject:	More Sector Thoughts After the WTC/Pentagon Disasters/Kit Konolige/MS  Electric Utilities Research Morgan Stanley Electric Utilities Research Kit Konolige  (212) 761-6237 David Reynolds  (212) 761-6078 Carrie Stevens  (212) 761-6183 Chris Bezler  (212) 761-4487 Douglas Levine  (212) 761-7134 More Sector Thoughts After the WTC/Pentagon Disasters * Defensive posture means stocks should outperform With European markets sinking and political talk turning towards a protracted military response we expect electric stocks in general to see sector inflows. * Precedence The sector has outperformed in the wake of other crises and industry wide fundamentals appear stable. * Large-cap integrateds may be the best place Regulated utilities more well known as a defensive sector while volatility benefits merchants - big integrateds with merchant exposure like DUK, AEP, and D offer both. * Direct impacts limited Little capital invested in a potentially volatile Middle East; industry is primarily domestic; lower NYC demand transitory and likely immaterial, in our view.  - 111037.pdf   - Courtney.Cleman.vcf