Shigeki Matsumoto of Nomura Securities Co. rockets from runner-up to first place in a sector that is still reeling from the effects of the massive 2011 earthquake and tsunami that triggered meltdowns at the Fukushima Daiichi nuclear power plant and prompted the Japanese government to shut down all such facilities; 48 of the nation’s 50 reactors are still off line. “Even in the most optimistic scenario, in which the first reactor could restart in late September, electric power companies will continue to suffer from a substitution-fuel burden,” Matsumoto says. “An electricity tariff hike and unstable supply from prolonged reactor suspension are encouraging a gas shift in the medium term.” Hence he is bullish on Tokyo Gas Co., which he believes is benefiting from not only the growth in gas demand but also cost-cutting initiatives at the Tokyo-based utility. Moreover, if the U.S. government agrees to allow liquified-natural-gas exports to countries with which it doesn’t have free trade agreements, including Japan, input costs could fall and profitability rise, the analyst adds. Matsumoto, 43, joined Nomura Research Institute in 1992 after earning a bachelor’s degree in commerce at Tokyo’s Meiji University; he moved to Nomura Asset Management in 2000 to cover Plant Engineering & Shipbuilding, then returned to the sell side five years later to follow oil and utilities stocks. — Leslie Kramer |
Industries – Energy & Utilities: First
