Some say the five-year love affair with the industry is at an end.
Jean Reaves Rollins is managing partner at C Three Group. Richard Stavros is executive editor of Public Utilities Fortnightly.
The Dow Jones Utility Index and C Three Index lost 5.84 percent and 4.63 percent, respectively, during the first six days of trading in June 2007—the steepest decline since February 2003. Surging Treasury yields primarily drove the early June losses.
Table 1 shows there were very few winners in the first eight days of June 2007 and many losers. Generally, the gas LDC sector was affected less by the increasing Treasury yields, while larger companies with more debt exposure were hurt the most.
While eight days does not make a trend, unless the Treasury market stabilizes, it is likely that the five-year market love affair with the sector in general could be over.