Uranium Funds - New Game Changers for the New Year by svijayku89


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									Uranium Funds - New Game Changers for
the New Year
A leveraged play on Uranium funds and miner stocks seems to be a catching trend as the
2014 expiration date for the Highly Enriched Uranium Agreement [HEU] comes closer. Last
year, events saw American derivatives of Cameco Corporation (a large cap Uranium Miner
stock) growing up by7 % in the gone year and simultaneously being outperformed by the
peers like Uranium ETF URA that appreciated 10 % in 2012.

This deficit may be clearly understood through the supply and demand figures from United
States of America which houses 104 under operation nuclear power reactors. The reactors
collectively produced only 4mllb of Uranium in 2012, while consuming 55mllb during the
same year.

The good news is that a laggard supply is not affecting the demand which is constantly
growing. Uranium commodity price has been in a crash mode since the failure of the reactor
located in Fukushima, Japan leading to a world-wide apprehension towards nuclear energy as
a staple power resource. With time the acceptance is regaining ground and the world demand
for energy is on the rise. In order to meet this scenario the supply needs to be uplifted
manifold. But with other countries too making an exit (or procrastinating their plans for
expansion in this field) from the nuclear power and its associated reactors, the above vision
seems to be on the back burner. In China 28 nuclear reactors are under construction. The
changing picture in Japan displays the reversal of the anti-nuclear attitude by the new
president's (Mr. Shinzo Abe) positive stance on building new safer nuclear reactors in the

Then there are the emerging nations such as India, China, South Korea and the likes of Russia
that are introducing themselves to the nuclear industry by bringing in nuclear reactors.There
are 62 new reactors being built in the world.The International Atomic Energy Agency has a
very positive prediction which reads as follows- the nuclear power production will rise
between 35% - 100% in 20 years. Simultaneously the Uranium demand will rise 60% in the
aforesaid time frame. The world nuclear demand will exceed the supply by the year 2014 as
estimated by The World Nuclear Association.

Securities like Cameco Corporation and Paladin Energy will be the direct beneficiaries in an
improved sentiment scenario. Cameco which accounts for 16% of world's production from its
mines in Canada, United States and Kazakhstan also owns foremost land positions in areas
promising new discoveries in Canada and Australia.

Amid the positivity there are few glitches that can be discussed such that another disaster
similar to the one mentioned above could create havoc for this industry, secondly there are
chances that the world demand could grow at a slower pace than projected and the other
alternate energy sources of natural gas and solar power might work out to be cheaper and
more abundantly available, but more than the analysis, it is the simple law of demand and
supply that may make the yellow cake and its related products a probable game changer for
"H.E.U is a trade understanding that accounted for 24 million of the total 177 millions of
global demand in 2012 and allows Uranium extraction from the old Soviet weapons and war-
heads. This treaty stands for dissolution thus creating a huge gap between the metal's supply
and demand figures. Capital Markets over the world, have been gradually discounting this
production aberration to enhance their stock prices, which saw a recent frenzy not more than
three months ago. Current market figures that more or less indicate a certain bottoming out of
Uranium Mining Fund are compelling investors to take a closer look at pure play broader
market products like index bound Uranium ETFs that use a wide spectrum approach while
acquiring industry specific assets."

The Global X Uranium ETF [URA] follows the performance of the Solactive Global
Uranium Index and delivers after an annual expense of 0.69%. A basket methodology that the
URA fund managers use while stock picking, empowers investors to a global exposure
among the top players of the Uranium Industry and at the same time downsizes any
individual risks. Cameco Corp., Paladin Energy Ltd and Uranium One Inc. are the top three
holdings and account for more than 45% of the total assets of Global X URA.

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