Investors may wonder whether Germany could be the first of many to pull the plug on nuclear projects. John Meyer, a commodities analyst at Fairfax, said: ‘The German pronouncement over the weekend was surprising and extraordinary and is a huge blow to the nuclear industry.’ He added: ‘If other countries follow Germany then the nuclear expansion forecast by uranium producers may be largely limited to the US and China
Geiger Counter: nuclear power vs nuclear peril, CityWire Money – by Rob Mackinlay Jun 02, 2011 Germany’s plans to ditch nuclear power this week failed to unnerve uranium investors but uranium focused investment trust Geiger Counter may become a power or a peril in an investor’s portfolio.
When German chancellor Angela Merkel announced plans to close all the country’s nuclear reactors by 2022 uranium investors, already hardened by the Japanese nuclear crisis, were not worried for long.
The trust now trades at a significant discount to net asset value – its shares are worth less than the assets is owns – with Numis Securities saying Geiger Counter’s shares sell at a 24% discount to the value of the companies it owns. This is nearly double its annual average discount of 13%.
This makes the trust look cheap but investors may wonder whether Germany could be the first of many to pull the plug on nuclear projects. John Meyer, a commodities analyst at Fairfax, said: ‘The German pronouncement over the weekend was surprising and extraordinary and is a huge blow to the nuclear industry.’ He added: ‘If other countries follow Germany then the nuclear expansion forecast by uranium producers may be largely limited to the US and China.’……..
The problem for uranium investors is that the vast majority of the buying and selling goes on behind closed doors.
The spot price for uranium comes from its ‘open’ market price which is taken from uranium exchanges where the metal is bought and sold in the open. However this only represents about 10% of the whole market. The price movement in the larger market place – known as the ‘term’ market – can be very different……
