my take on recent price action, page-10

The following is why we hold WMT and other offshore Uranium Companies. It's also why WMT will continue to be popular.

Uranium stocks plunge on ASX
By George Lekakis

March 01, 2007 12:00am

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AS THE politics of nuclear debate continued to play out in Federal Parliament yesterday, uranium stocks were pummelled on the ASX.

While many investors are still optimistic that the Australian Labor Party will soon abandon its policy of limiting uranium mining to three sites, the immediate fundamentals of the sector kicked in yesterday.

Several uranium explorers fell by as much as 40 per cent as panicked sellers bailed in the first hour of trading.

Uranium companies have been among the best performers on the ASX in the last year as investors have gambled that Federal and State governments are poised to remove current barriers to uranium extraction.

Many stocks including Paladin Resources and ERA have more than tripled in value in the last 12 months.

But the gloss was wiped from the sector at yesterday's close, with Paladin down 9 per cent to $9.10 and ERA off 6 per cent to $24.48.

Fund managers said the sector haemorrhaged more heavily than most because the uranium industry was still a speculative play for investors.

"In a market which is jittery it is usually the speculative stocks that get hit the most," said Tim Barker of BT Financial Group.

Things looked a lot sicker in the first hour of trading.

The hardest hit was WA-based explorer Korab Resources which slumped 37 or 42 per cent to a low of 50 soon after the market opened before recovring slightly.