-----Original Message-----
From: 	Courtney Cleman <Courtney.Cleman@morganstanley.com>@ENRON [mailto:IMCEANOTES-Courtney+20Cleman+20+3CCourtney+2ECleman+40morganstanley+2Ecom+3E+40ENRON@ENRON.com] 
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