Coronavirus disrupts financial markets around the world

As the Coronavirus has become more widespread in Europe and North America, stock markets have reacted. Last week, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all fell more than 10% resulting in stocks posting their biggest weekly declines since October 2008 during the financial crisis.

The effects of the new outbreaks have been felt mostly in tourism with supply chain disruptions and weakening demand. The sharp fall resulted in the OECD revising the global economic growth for 2020 to 2.4% (from 3%) — the lowest projection since the financial crisis. This number could be lowered further as cases rise in more countries.

The New York Times reports that many factories in China are still closed following the shutdowns in the country, which began in late January. The OECD says that China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism and over 40% of global demand of some commodities, which shows the ripple effect in global supply chains.

According to the New York Times, China’s National Bureau of Statistics reported figures over the weekend that could signal a decline in its manufacturing economy.

In Europe the most worrying case so far is Italy. “Italy is the obvious one most at risk for two reasons, because the outbreak is taking place there and because it’s the weakest economy in the region,” said Ángel Talavera, head of Europe economics at Oxford Economics.

Beyond Europe, specialists warn about risks for African countries given the close economic and commercial connections to China and the more fragile healthcare infrastructures. Just a few days ago, Nigeria was the first sub-Saharan country to confirm a Coronavirus case. Nigeria is Africa’s most populous country and authorities have said they are increasing efforts for a more effective response to the virus.

As of Monday evening, the figures showed that the virus has infected more than 90,000 people across 73 countries and territories. The European Union’s alert level was raised from moderate to high, said European Commission President Ursula von der Leyen on Monday.

Market Reactions

Over the last week, stock markets took a drastic hit performing the worst since 2008. The impact was felt across all industries with some sectors being more drastically affected. In the U.K., the FTSE 100 index fell 11.1% at the end of last week.

The International Air Transport Association released its assessment of the impacts of the virus outbreak showing a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region, which could translate to an estimated loss of $27.8 billion (€25 billion) in 2020. Airline stocks are taking a serious hit. Market watchers are looking at American Airlines, which saw a 31% drop in its share price in the last month.

In the other direction, pharma companies and medical supplies groups have seen surges in price as demand for face masks have exhausted supply. Nasdaq reported that shares in Alpha Pro Tech (APT), a maker of surgical masks, rose over 500% last week.

“More so than the health effects, investors are watching for how long the supply chain and corporate earnings will be affected. Will it just be one quarter or even two quarters? You don’t know, and that causes uncertainty,” said Joe Saluzzi, co-head of equity trading at Themis Trading, for Market Watch.

From CNBC, 2 March 2020

After the financial shock seen in market activity last week, the markets have started this new week in expectation that governments and international institutions are going to act to mitigate economic and financial impacts of the outbreak.

According to Reuters, the G7 is due to release a statement today or tomorrow to pledge to work together to mitigate the damage to their economies from the fast-spreading epidemic.

Market Rebound or Dead Cat?

Some analysts are more positive about potential gains to the market during this coming week as a rebound against the declines. CNBC market proposes a scenario of gains to come, according to historic data. It reports that previous market declines of 10% or more over five trading days since 1990 have shown that equities tend to rebound in the weeks to follow, according to data provided by hedge-fund tool Kensho.

On Monday The Dow Jones index rose 5%, and the S&P 500 and Nasdaq Composite both went up more than 4%.

The positive sentiment may come from the fact that investors believe that, amid such circumstances, central bank and government interventions will take place in an attempt to stabilise losses and uncertainty.

On Monday, Asian markets were rising after the Bank of Japan, the country’s central bank, said it “will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”

Investment Opportunity?

A good rule of thumb for investments is to buy low and sell high, and this might be the opportunity for saviour investors who managed to cash before the crash to buy back at lower prices. So, what are the best investment strategies when the market feels so uncertain?

LA-based Wedbush Securities analyst Dan Ives said: “that times like these in the market represent “golden buying opportunities” for stocks that could be winning in the long term.” His bet is to look into tech stocks.

“Our long standing view during this last decade… is that we are in the midst of a unprecedented tech bull market with themes such as the enterprise move to cloud computing, a transformational 5G super cycle, EV auto demand inflection, streaming cord cutting paradigm shift, and cyber security all representing some of the major game changing trends poised to change the consumer and enterprise landscape for the next decade,” Ives wrote on Sunday. Among his choices are: Microsoft, Tesla, DocuSign and Uber.

BNP Paribas advised investors to keep an eye on companies based in other Asian countries beyond China as they are less exposed to the impact of the virus outbreak and still considered a safe option to invest. “India is the first one that comes to mind,” the analysts said.

British serial entrepreneur and founder of global financial website ADVFN (www.advfn.com) Clem Chambers believes we are only half-way into the market crash.

Coronavirus disrupts financial markets around the world

As the Coronavirus has become more widespread in Europe and North America, stock markets have reacted. Last week, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all fell more than 10% resulting in stocks posting their biggest weekly declines since October 2008 during the financial crisis.

The effects of the new outbreaks have been felt mostly in tourism with supply chain disruptions and weakening demand. The sharp fall resulted in the OECD revising the global economic growth for 2020 to 2.4% (from 3%) — the lowest projection since the financial crisis. This number could be lowered further as cases rise in more countries.

The New York Times reports that many factories in China are still closed following the shutdowns in the country, which began in late January. The OECD says that China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism and over 40% of global demand of some commodities, which shows the ripple effect in global supply chains.

According to the New York Times, China’s National Bureau of Statistics reported figures over the weekend that could signal a decline in its manufacturing economy.

In Europe the most worrying case so far is Italy. “Italy is the obvious one most at risk for two reasons, because the outbreak is taking place there and because it’s the weakest economy in the region,” said Ángel Talavera, head of Europe economics at Oxford Economics.

Beyond Europe, specialists warn about risks for African countries given the close economic and commercial connections to China and the more fragile healthcare infrastructures. Just a few days ago, Nigeria was the first sub-Saharan country to confirm a Coronavirus case. Nigeria is Africa’s most populous country and authorities have said they are increasing efforts for a more effective response to the virus.

As of Monday evening, the figures showed that the virus has infected more than 90,000 people across 73 countries and territories. The European Union’s alert level was raised from moderate to high, said European Commission President Ursula von der Leyen on Monday.

Market Reactions

Over the last week, stock markets took a drastic hit performing the worst since 2008. The impact was felt across all industries with some sectors being more drastically affected. In the U.K., the FTSE 100 index fell 11.1% at the end of last week.

The International Air Transport Association released its assessment of the impacts of the virus outbreak showing a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region, which could translate to an estimated loss of $27.8 billion (€25 billion) in 2020. Airline stocks are taking a serious hit. Market watchers are looking at American Airlines, which saw a 31% drop in its share price in the last month.

In the other direction, pharma companies and medical supplies groups have seen surges in price as demand for face masks have exhausted supply. Nasdaq reported that shares in Alpha Pro Tech (APT), a maker of surgical masks, rose over 500% last week.

“More so than the health effects, investors are watching for how long the supply chain and corporate earnings will be affected. Will it just be one quarter or even two quarters? You don’t know, and that causes uncertainty,” said Joe Saluzzi, co-head of equity trading at Themis Trading, for Market Watch.

From CNBC, 2 March 2020

After the financial shock seen in market activity last week, the markets have started this new week in expectation that governments and international institutions are going to act to mitigate economic and financial impacts of the outbreak.

According to Reuters, the G7 is due to release a statement today or tomorrow to pledge to work together to mitigate the damage to their economies from the fast-spreading epidemic.

Market Rebound or Dead Cat?

Some analysts are more positive about potential gains to the market during this coming week as a rebound against the declines. CNBC market proposes a scenario of gains to come, according to historic data. It reports that previous market declines of 10% or more over five trading days since 1990 have shown that equities tend to rebound in the weeks to follow, according to data provided by hedge-fund tool Kensho.

On Monday The Dow Jones index rose 5%, and the S&P 500 and Nasdaq Composite both went up more than 4%.

The positive sentiment may come from the fact that investors believe that, amid such circumstances, central bank and government interventions will take place in an attempt to stabilise losses and uncertainty.

On Monday, Asian markets were rising after the Bank of Japan, the country’s central bank, said it “will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”

Investment Opportunity?

A good rule of thumb for investments is to buy low and sell high, and this might be the opportunity for saviour investors who managed to cash before the crash to buy back at lower prices. So, what are the best investment strategies when the market feels so uncertain?

LA-based Wedbush Securities analyst Dan Ives said: “that times like these in the market represent “golden buying opportunities” for stocks that could be winning in the long term.” His bet is to look into tech stocks.

“Our long standing view during this last decade… is that we are in the midst of a unprecedented tech bull market with themes such as the enterprise move to cloud computing, a transformational 5G super cycle, EV auto demand inflection, streaming cord cutting paradigm shift, and cyber security all representing some of the major game changing trends poised to change the consumer and enterprise landscape for the next decade,” Ives wrote on Sunday. Among his choices are: Microsoft, Tesla, DocuSign and Uber.

BNP Paribas advised investors to keep an eye on companies based in other Asian countries beyond China as they are less exposed to the impact of the virus outbreak and still considered a safe option to invest. “India is the first one that comes to mind,” the analysts said.

British serial entrepreneur and founder of global financial website ADVFN (www.advfn.com) Clem Chambers believes we are only half-way into the market crash.

Libra’s boundary pushing causes worldwide backlash

A month after the announcement of Libra’s proposed launch, Facebook’s cryptocurrency has faced considerable backlash from authorities, raising uncertainty around its future plans. The blockchain project has been greeted frostily by most regulators and financial institutions all over the world, as they collectively indicate that an unregulated digital currency available to billions of social media users globally would bring about significant financial disruption.

The negative response has prompted skepticism around the feasibility of bringing Libra to the market in 2020 — if ever. According to CNBC, the tech industry is expressing doubts over whether the cryptocurrency will become available next year, in light of the issues raised by US lawmakers.

The lack of public trust in the social media company is also a factor that could hinder further developments: “Facebook won’t get far with Libra if consumers are worried about their financial data being compromised or misused, and regulators don’t trust Facebook to keep that data secure,” Dimitri Sirota, CEO of BigID, a New York data privacy firm said to CNBC.

The US Federal Reserve Chairman Jerome Powell said the US central bank has “serious concerns” about Libra, the Wall Street Journal reported. Both the Federal Reserve System and the separate Financial Stability Oversight Council are meeting to discuss Libra alongside global policy makers.

Facebook faces pushback from regulators over Libra launch

The backlash, however, does not seem to have stopped Facebook from moving forward with their plans. In a letter addressed to the US Senate Banking Committee last Monday, Facebook blockchain lead and Libra project leader David Marcus attempted to ease concerns, stating that the social media company is open to collaboration with authorities and other regulatory bodies to make the Libra project work within the right framework:

“I want to give you my personal assurance that we are committed to taking the time to do this right. We understand that big ideas take time, that policymakers and others are raising important questions, and that we can’t do this alone. We want, and need, governments, central banks, regulators, non-profits, and other stakeholders at the table and value all of the feedback we have received,” Facebook’s blockchain lead stated.

David Marcus is scheduled to testify before the Banking Committee next week.

India and China not open to Libra, but China considers the benefits of crypto

If Facebook is facing problems with the US Senate, the international stance on Libra is no friendlier. In the biggest Asian markets, India and China, Facebook’s cryptocurrency seems to be an increasingly remote possibility.

Due to tight regulations, Facebook is currently locked out of the Indian market, one of the largest in the world. Since April 2018, all entities regulated by the Reserve Bank of India have been banned from dealing in cryptocurrencies and virtual coins, and the government is working on a draft to increase penalties for those who trade and use cryptocurrencies.

“Design of the Facebook currency has not been fully explained,” India’s Economic Affairs Secretary Subhash Garg said in an interview in New Delhi on Saturday. “But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”

Chinese authorities are reluctant to let Libra enter the market, but show interest in cryptocurrencies

Meanwhile in China, a senior official from the Central Bank stated that Libra must be “put under the oversight of monetary authorities” as reported by Bloomberg earlier this week.

Because as a cryptocurrency, Libra would be able to be transacted freely across borders, Chinese authorities are concerned that it “won’t be sustainable without the support and supervision of central banks,” Mu Changchun, deputy director of the People’s Bank of China’s payments department, told Bloomberg.

Mu has also expressed further concerns about the lack of clear commitment to counter money-laundering mechanisms, as well as clarification as to how Libra will protect its users’ privacy.

Nevertheless, Chinese authorities have not ruled out the use of digital currencies in their territory as they recognise the advantages of the technology in terms of improved efficiency.

Libra’s announcement has prompted the PBOC (People’s Bank of China) to look into plans to introduce a government-backed digital currency, aiming to secure China’s position in the global cryptocurrency race, as reported by the China Daily.

“A digital currency issued by the central bank can improve the efficiency of monetary policy, and help to optimise the payment system,” said Wang Xin, director of the PBOC Research Bureau.

Don't miss Cassiopeia live debate about Libra with crypto experts. SUNDAY 7PM UK TIME. Subscribe to our Youtube Channel and follow @stefixy @financialfox for participating link.

The economic power shift: New global dynamics powered by technology and innovation in emerging…

The economic power shift: New global dynamics powered by technology and innovation in emerging markets

The global economy has undergone fundamental changes over the last 20 years. The financial crisis in 2007–8, technology boom, and fast growth in emerging economies like China and India have all reshaped the economic dynamics around the world.

Commodities have lost their relevance in the global market, opening the way for technology to set new market rules. As a result, IT and consumer-driven stocks have predominantly become the backbone of the new economy.

In the 2007 MSCI Emerging Market Index, energy represented 18 percent and materials 15 percent, and together accounted fully for one third of the total shares, showing that commodities were still highly valuable for the global economy.

However, ten years later, the economic reality has shifted. The 2017 Index shows that those two sectors combined account for only 14 percent. Meanwhile, information technology has risen to 28 percent of the index, from 10 percent a decade ago.

One of the greatest drivers of the technology boom was the shift in mindset that followed the global economic crisis. People and society have become more conscious and as such have geared towards products and services that can provide an added value and have a positive lasting impact in society. Technology is the enabler to build tools and systems that contribute to a more balanced economy, clearly reflected in the market value of technology products.

Technology has challenged the status quo in virtually every sphere — from digital banking to personal virtual assistants, and will continue to do so as it develops. McKinsey estimates that applications of the disruptive technologies technologies could have a potential economic impact of between $14 trillion and $33 trillion a year in 2025. More than creating something new, these technologies are highly focused on increasing consumer and social value, especially in areas such as financial services, healthcare and access to information.

From McKinsey, Disruptive Technologies

The shift to a digital economy also propelled a shift in the global economic power dynamics, which used to be well established in the advanced nations in the north-western corner of the map. This is no longer true: emerging markets may quickly outperform developed nations in Europe and North America, largely due to their strategic economic planning, openness to innovative technologies, and large consumer market.

The PwC World in 2050 report shows that global economic power has been shifting towards Asia for a few years now, a process set to continue over the next few decades. China and India, the largest countries in the world by population, are leading this shift.

According to PwC, these two nations are well placed to lead the way in key areas of innovation linked to new digital technologies.

In the case of China, digital technologies are estimated to contribute anything up to 26% of its GDP by 2030, as compared to a global average of 14% of GDP. This reflects the country’s leading position in areas like mobile technology and e-commerce, its large domestic market and its increasingly highly educated workforce.

At the end of 2007, China accounted for 16 per cent of the Emerging Market Index, and Chinese tech companies 0.3 per cent, whereas by 2017 China had a 30 per cent allocation and China tech accounted for 12.3 per cent of the index.

Neighbouring India is also a tech-savvy nation, nurturing an old tradition of producing world- class computer programmers and technologists who contribute significantly to technological developments around the world.

China and India are just two prime examples of the economic potential held by the populations in developing nations and the vast scope for technologies and services to succeed in those markets. By 2030, 80% of the world’s middle class will be found in developing countries, and they have increasingly more purchasing power. Developing countries are where technology can have a bigger social impact and makegreater contribution to the economy.

Over the coming years, there will be a restructuring of the global economy with non-OECD economies expected to account for 57 percent of the world GDP by 2030. By 2040, the economies of E7 countries, the group of greatest emerging economies China, India, Brazil, Mexico, Russia, Indonesia and Turkey, will be double that of G7 countries.

Of course, such a drastic change in the economic scenario has prompted paradigm shifts and some unwanted consequences, so the need to understanding the opportunities and challenges is urgent.

In order to create a more balanced global economy, governments and organisations are attempting to tackle the aftermath of this power shift, such as the rise of political extremes and inequality, as well as debating how to shape rules and regulations for an economy that is founded on the flow of data and information.

Uranium on the watch-list: think long term for best returns

One of the hottest tipped commodities in mining is uranium, which has been slowly recovering since its price crash in 2016. The rise can be attributed to a combination of factors, but mainly mine closures and a surge in the number of governments around the world committing to include nuclear energy in their energy mix.

Uranium price evolution, from https://tradingeconomics.com/commodity/uranium

Nuclear is necessary for clean energy transition

In the race to meet the reduced carbon emission targets, there are solid reasons for nuclear energy to stand as a more prominent energy source. Unlike other base-load energy alternatives, nuclear power emits no greenhouse gases and does not entail the environmental devastation of hydropower damming.

Despite growing efforts by nations to move towards cleaner energy sources, in 2016 65.3% of the electricity in the world was generated from coal, natural gas, or oil in thermal powerhouses. Only around a third of electricity came from emission-free alternatives, like hydro, nuclear or renewable alternatives.

According to the IEA, global energy demand is expected to increase by 25% between 2020 and 2035, so if governments are serious about meeting the clean energy targets, alternative, emission-free sources should be considered.

A 2018 study by the MIT showed evidence that in order to achieve low-carbon emissions at a reasonable cost and minimal social impact, a mix of different energy sources would be required, rather than concentrating production. The study concluded that excluding nuclear reactors would cost 2–4 times more than incorporating them, because uranium delivers extraordinary efficiency to nuclear reactors: one pound of uranium produces c. 22,600 kWh of non-emitting electricity (vs. one pound of coal which produces only 1.4 kWh of dirty energy).

Furthermore, an analysis by WNA, using data from OECD’s Nuclear Energy Agency (NEA) for various energy sources, gave compelling results that showed nuclear energy to be the cheapest alternative in four prominent countries: France, UK, USA, and South Korea.

From https://seekingalpha.com/article/4252305-uranium-market-background-potential-investment-cameco

China pushes for more nuclear energy production

China, the world’s largest energy growth market and one of the countries at the forefront of the clean energy revolution, is pushing for the construction of nuclear reactors across the country, Reuters has reported.

In additional to 45 nuclear reactors already in operation, China has 15 reactors in construction and has recently announced plans to dramatically ramp up nuclear as an energy source. The key to China’s nuclear ambitions lie in two factors: Premier Xi’s promise to make the skies blue again and the development of an indigenous reactor technology: the Hualong One reactor.

China’s devastating air pollution problems are well known, with an estimated 1 million deaths per year caused by air-particulate pollution in China alone. The impact on Chinese society — and the aspirations of Chinese workers, parents and students — is regarded by the Central Committee as a key social risk and led to Premier Li Keqiang famously vowing in 2017 that government would “make the skies blue again”.

The Hualong One, a Chinese designed and manufactured reactor, is currently under construction at Fuqing and Fangchenggang. Fuqing 5 and 6 are expected to start up in 2019 and 2020, as are Fangchenggang 3 and 4. The Hualong One promoted on the international market is called the HPR1000, two of which are under construction at Karachi in Pakistan.

China has already become one of the small number of countries that has independently mastered third-generation nuclear power technology, and it has the conditions and comparative advantages to scale up and go into mass production,” said Huang Feng, a member of the expert committee of the China Nuclear Energy Association.

China recently foreshadowed the extent of its nuclear ambitions, at least in the medium term, through the approval of four new Hualong One reactors — after an approval hiatus of three years. To meet its 2030 clean energy and emission targets, Beijing is getting ready to commission eight reactors a year.

According to uranium expert, Brandon Munro, this growth could be the beginning of a larger program. Munro, who is CEO of Bannerman Resources Ltd, said, “I believe the Chinese nuclear program will need to ramp up even further by 2025. Firstly, China’s energy demand will continue to grow strongly as a result of increasing affluence and urbanisation of their population plus the electrification of transportation. Nuclear energy must play a big role — alongside renewables — in this demand growth. But, more importantly, China needs to displace its massive reliance on coal without sacrificing base-load stability. As the largest producer of hydro power in the world, the potential for additional hydro is mostly tapped out — which leaves only nuclear power to maintain base-load stability without emissions.”

Uranium in the spotlight

With more attention on nuclear energy, interest in natural uranium is growing. Putting nuclear reactors into operation requires time and planning, so natural uranium and other materials should be purchased years in advance to allow enough time to turn it into a finished fuel that can be used in the power plant.

Meanwhile, there is a downward trend in uranium supply. Experts believe that primary uranium production for 2019 will be closer to 130ml pounds, compared to the 154ml pounds produced in 2018 or 164ml in 2017.

As a result, uranium is placed as one of the top mining commodities with prices expected to rally in 2019, according to Mining.com.

From http://www.mining.com/cobalt-uranium-silver-prices-expected-rally-2019/

Dominic Frisby, commodities expert at MoneyWeek, believes that returns on uranium will increase, but that investors should be patient: “Now is a better time to be watching than buying. Over the past two-and-a-bit years, we do have something of an uptrend. The 2017 lows were higher than the 2016 lows. The 2018 lows were higher than the 2017.”

“It may all take a long time to play out, but the fundamentals are certainly there for the price to go higher. “

One of the factors that may accelerate the price recovery is the emergence of specialist investment funds into the uranium space. Sensing an asymmetrical risk-return opportunity as uranium emerges from a deep bear market, investment funds are returning to both equities and the physical commodity. Numerous uranium equities-focussed investment funds have been launched in the last 12 months, including by investment managers Sachem Cove Partners, L2 Capital, Segra Capital, Tribeca Investment Partners and Oclaner Asset Management. Furthermore, the long-standing TSX-listed physical investment fund Uranium Participation Corp has been joined by new-comer Yellow Cake plc. Yellow Cake listed on LSE in 2018 and has since acquired 10 million pounds of U3O8, deepening the supply deficit further.

In April, Munro presented to the World Nuclear Fuel Cycle on the re-emergence of investment funds. Munro drew parallels with the uranium boom of 2005–2007, where the uranium price was supported by the purchasing appetite of several investment funds. In concluding, he presented a scenario that generated estimated demand by investment funds of 20 million pounds of U3O8 per annum for the next three years.

In the context of existing supply deficits, investment fund demand for physical uranium could have a massive impact on the uranium market. Unlike so many other dynamics in the uranium sector, the emergence of such players is observable — as long as investors are watching.

Brandon Munro will be a special guest on Cassiopeia Mining and Metals TV Show, discussing with PR Stefania Barbaglio @stefixy the uranium market and investment opportunity. Stay Tuned @Cassiopeia_ltd @_FinancialFox

Uranium on the watch-list: think long term for best returns

One of the hottest tipped commodities in mining is uranium, which has been slowly recovering since its price crash in 2016. The rise can be attributed to a combination of factors, but mainly mine closures and a surge in the number of governments around the world committing to include nuclear energy in their energy mix.

Uranium price evolution, from https://tradingeconomics.com/commodity/uranium

Nuclear is necessary for clean energy transition

In the race to meet the reduced carbon emission targets, there are solid reasons for nuclear energy to stand as a more prominent energy source. Unlike other base-load energy alternatives, nuclear power emits no greenhouse gases and does not entail the environmental devastation of hydropower damming.

Despite growing efforts by nations to move towards cleaner energy sources, in 2016 65.3% of the electricity in the world was generated from coal, natural gas, or oil in thermal powerhouses. Only around a third of electricity came from emission-free alternatives, like hydro, nuclear or renewable alternatives.

According to the IEA, global energy demand is expected to increase by 25% between 2020 and 2035, so if governments are serious about meeting the clean energy targets, alternative, emission-free sources should be considered.

A 2018 study by the MIT showed evidence that in order to achieve low-carbon emissions at a reasonable cost and minimal social impact, a mix of different energy sources would be required, rather than concentrating production. The study concluded that excluding nuclear reactors would cost 2–4 times more than incorporating them, because uranium delivers extraordinary efficiency to nuclear reactors: one pound of uranium produces c. 22,600 kWh of non-emitting electricity (vs. one pound of coal which produces only 1.4 kWh of dirty energy).

Furthermore, an analysis by WNA, using data from OECD’s Nuclear Energy Agency (NEA) for various energy sources, gave compelling results that showed nuclear energy to be the cheapest alternative in four prominent countries: France, UK, USA, and South Korea.

From https://seekingalpha.com/article/4252305-uranium-market-background-potential-investment-cameco

China pushes for more nuclear energy production

China, the world’s largest energy growth market and one of the countries at the forefront of the clean energy revolution, is pushing for the construction of nuclear reactors across the country, Reuters has reported.

In additional to 45 nuclear reactors already in operation, China has 15 reactors in construction and has recently announced plans to dramatically ramp up nuclear as an energy source. The key to China’s nuclear ambitions lie in two factors: Premier Xi’s promise to make the skies blue again and the development of an indigenous reactor technology: the Hualong One reactor.

China’s devastating air pollution problems are well known, with an estimated 1 million deaths per year caused by air-particulate pollution in China alone. The impact on Chinese society — and the aspirations of Chinese workers, parents and students — is regarded by the Central Committee as a key social risk and led to Premier Li Keqiang famously vowing in 2017 that government would “make the skies blue again”.

The Hualong One, a Chinese designed and manufactured reactor, is currently under construction at Fuqing and Fangchenggang. Fuqing 5 and 6 are expected to start up in 2019 and 2020, as are Fangchenggang 3 and 4. The Hualong One promoted on the international market is called the HPR1000, two of which are under construction at Karachi in Pakistan.

China has already become one of the small number of countries that has independently mastered third-generation nuclear power technology, and it has the conditions and comparative advantages to scale up and go into mass production,” said Huang Feng, a member of the expert committee of the China Nuclear Energy Association.

China recently foreshadowed the extent of its nuclear ambitions, at least in the medium term, through the approval of four new Hualong One reactors — after an approval hiatus of three years. To meet its 2030 clean energy and emission targets, Beijing is getting ready to commission eight reactors a year.

According to uranium expert, Brandon Munro, this growth could be the beginning of a larger program. Munro, who is CEO of Bannerman Resources Ltd, said, “I believe the Chinese nuclear program will need to ramp up even further by 2025. Firstly, China’s energy demand will continue to grow strongly as a result of increasing affluence and urbanisation of their population plus the electrification of transportation. Nuclear energy must play a big role — alongside renewables — in this demand growth. But, more importantly, China needs to displace its massive reliance on coal without sacrificing base-load stability. As the largest producer of hydro power in the world, the potential for additional hydro is mostly tapped out — which leaves only nuclear power to maintain base-load stability without emissions.”

Uranium in the spotlight

With more attention on nuclear energy, interest in natural uranium is growing. Putting nuclear reactors into operation requires time and planning, so natural uranium and other materials should be purchased years in advance to allow enough time to turn it into a finished fuel that can be used in the power plant.

Meanwhile, there is a downward trend in uranium supply. Experts believe that primary uranium production for 2019 will be closer to 130ml pounds, compared to the 154ml pounds produced in 2018 or 164ml in 2017.

As a result, uranium is placed as one of the top mining commodities with prices expected to rally in 2019, according to Mining.com.

From http://www.mining.com/cobalt-uranium-silver-prices-expected-rally-2019/

Dominic Frisby, commodities expert at MoneyWeek, believes that returns on uranium will increase, but that investors should be patient: “Now is a better time to be watching than buying. Over the past two-and-a-bit years, we do have something of an uptrend. The 2017 lows were higher than the 2016 lows. The 2018 lows were higher than the 2017.”

“It may all take a long time to play out, but the fundamentals are certainly there for the price to go higher. “

One of the factors that may accelerate the price recovery is the emergence of specialist investment funds into the uranium space. Sensing an asymmetrical risk-return opportunity as uranium emerges from a deep bear market, investment funds are returning to both equities and the physical commodity. Numerous uranium equities-focussed investment funds have been launched in the last 12 months, including by investment managers Sachem Cove Partners, L2 Capital, Segra Capital, Tribeca Investment Partners and Oclaner Asset Management. Furthermore, the long-standing TSX-listed physical investment fund Uranium Participation Corp has been joined by new-comer Yellow Cake plc. Yellow Cake listed on LSE in 2018 and has since acquired 10 million pounds of U3O8, deepening the supply deficit further.

In April, Munro presented to the World Nuclear Fuel Cycle on the re-emergence of investment funds. Munro drew parallels with the uranium boom of 2005–2007, where the uranium price was supported by the purchasing appetite of several investment funds. In concluding, he presented a scenario that generated estimated demand by investment funds of 20 million pounds of U3O8 per annum for the next three years.

In the context of existing supply deficits, investment fund demand for physical uranium could have a massive impact on the uranium market. Unlike so many other dynamics in the uranium sector, the emergence of such players is observable — as long as investors are watching.

Brandon Munro will be a special guest on Cassiopeia Mining and Metals TV Show, discussing with PR Stefania Barbaglio @stefixy the uranium market and investment opportunity. Stay Tuned @Cassiopeia_ltd @_FinancialFox

China aims to be a leader in AI by 2030

The Chinese government is on a mission to place the country as a world leader in Artificial Intelligence by 2030. Along with the United States, China currently shares the top destinations in tech development. Aiming to get to the global pole position, China is ramping up its strategy, focusing mainly on AI by heavily investing in research, development and applications of AI into diverse areas.

The government plan released in 2017, forecasts that its domestic AI industry will be worth US$150 billion by 2030. “By 2030, we shall make artificial intelligence theory, technology, and application at the world’s leading level,” the Chinese Government said in the release of its top-level AI plan.

China has identified 17 key areas for AI development in China, among them smart vehicles, intelligent service robots, intelligent drones, neural network chips, and intelligent manufacturing, for examples; as well as bringing the value of AI to all levels throughout the supply chain.

In the near-term future, China’s Ministry of Industry and Information Technology (MIIT) hopes to thrive in smart chips for autonomous driving, intelligent vehicle algorithms, and vehicle communications. Over the coming three years, Beijing expects to increase in the size of the AI industry by ten times.

The signs of the AI revolution in China are already visible. Earlier in November, state news agency Xinhua unveils the world’s first AI news anchor who can report ‘tirelessly’ 24 hours a day.

The steps to achieve global dominance reflect the amount of funding destined to technology and AI firms in China. Last year, 48 percent of total global funding of AI startups globally came from China, compared to 38 percent funded by the US, and 13 per cent by the rest of the world.

To be able to sustain the growth of the industry, investments in education and training are hugely necessary — and Chinese authorities do not miss this. From 2019, Chinese pupils will start having AI lessons in primary and secondary schools. According to Xinhua, pilot projects already started running in Shanghai.

In universities, doctoral students who pursue AI-related majors can be paid as high as 800,000 yuan (US$115,234) per year, representing an increase of up to 60 percent from the annual salary of 500,000 yuan (US$72,021) in 2017, says a NetEase report.

Smart Asia: Asian countries lead the race to develop smart cities

The strategy and development of AI applications couples with advancements in terms of implementing smart technologies into urban centres to create the so-called ‘smart cities’.

Governments across Asia are embracing disruptive technologies such as Internet of Things (IoT), artificial intelligence (AI) and blockchain to create effective solutions for the challenges faced by megacities.

The second leading smart city in the world is Singapore, where intelligent transportation and mobility system which have been in place for more than 10 years.

Prime Minister Narendra Modi of India launched a strategy in 2015 to build 100 smart cities in the country. The initiative seeks to invest more than $15 billion over the next few years to develop and implement efficient infrastructure and management solutions.

The engineering behind the structure of smart cities combines multiple digital tools such as location sensing, cloud computing and mobile connectivity.

McKinsey estimates that smart-mobility applications could create up to $70 billion in value and forecasts suggest that by 2023 the smart cities market will be a US$7.6 billion Telco opportunity for mobile service providers (MSP) and network vendors.

Despite the figures above, the real positive impact of smart cities cannot be measured in economic growth or market size; it is instead reflected in a better quality of life, more effective public services and sustainable lifestyle.

“Asian countries are very forward-thinking and famous for welcoming technology and innovation. There is a huge scope for growth in this area and tech companies should be in the lookout for opportunities,” says Stefania Barbaglio, director at Cassiopeia Services.

As we welcome the fourth industrial revolution, and let innovation keep on improving our lives, more systems are set to transform, bringing positive changes to society. Watch this space for more updates on technology projects in emerging markets. Subscribe to our FinancialFox YouTube channel for all the latest developments and news.