u stocks rocket on japan nuke hope

Uranium stocks rocket on Japan Nuke hope -- The Australian
27th February

URANIUM stocks bounced back to life yesterday, rising by up to 21 per cent on Japan's release of a draft energy policy that committed the country to a reduced but ongoing dependence on nuclear energy.

Shares in Paladin climbed 21.3 per cent while Energy Resources of Australia climbed 8.5 per cent, providing a rare bounce in a sector that has been depressed since the March 2011 Fukushima nuclear disaster.

Paladin managing director John Borshoff said his company's stock -- which climbed by 9.5c to 54c yesterday -- had been oversold by as much as 80 per cent amid the slump and uranium prices would begin to recover on the back of Japan's commitment to a nuclear energy future.

"There is great strength in this statement. There are 17 reactors to come on line and we believe that up to 65 per cent of the 52 reactors could come back on line," he told The Australian.

"I think the road to recovery for uranium prices is going to start.

"I expect there is going to be a recovery in prices for stocks, particularly for producing companies." Japan's Trade Minister Toshimitsu Motegi announced the policy this week. Although it contained no specifics on what percentage of Japan's 48 stalled nuclear reactors would be restarted and no timeline, it was enough to buoy sentiment in the uranium sector.

The draft plan from Shinzo Abe's pro-nuclear LDP government left open the prospect of building new plants or reactors, but Mr Motegi said Japan was still committed to "reducing its reliance on nuclear power".

Although the announcement contained no surprises, it was enough to steer investors back into the uranium sector.

Brian Reilly, the Australian head of Canadian uranium giant Cameco, told The Australian this week it was "a matter of when, not if" Japan restarted its nuclear program and added that uranium stocks had been oversold.

"I think by and large they are undervalued because we are trying to measure this near-term uncertainty. I think the investors are looking very closely to see when this market will turn," he said.

"The good news is long-term fundamentals remain strong and have been strong for some time. We see about 3 per cent growth for the next 10 years with most of that growth coming from China, India and South Korea."
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http://www.theaustralian.com.au/business/mining-energy/uranium-stocks-rocket-on-japan-nuke-hope/story-e6frg9df-1226838666382