Events in Japan and their impact on uranium
posted on
Mar 16, 2011 09:15AM
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Kim Inglis Mar 15, 2011 – 2:43 PM ET | Last Updated: Mar 15, 2011 2:48 PM ET
The markets have been reacting quite negatively to the earthquake and tsunami aftermath in Japan. The uncertainty surrounding the state of Japan’s nuclear generators has heightened the panic, causing the uranium sector to come under significant pressure.
According to a report from the research group at Credit Suisse, the sell-off in uranium stocks may well be the result of panic more than rational thinking. They believe that uranium equities have already priced in much of the medium-term downside risk. Although they note that the worst-case scenario has yet to be priced into valuations, they do not feel that the markets will reach those levels.
To support their argument, Credit Suisse provided a few key reasons:
The situation in Japan is certainly dynamic, so investors should continue monitoring events. If Japan is unable to contain their damaged reactors, investors should expect further downside and increased backlash from the court of public opinion.
Kim Inglis is an Investment Advisor, CIM with Canaccord Wealth Management, a division of Canaccord Genuity Corp. Kim can be reached at www.reynoldsinglis.ca.