article 3 months old

Uranium Week: Kazakhstan Capitalism

Weekly Reports | Nov 20 2018

The long awaited IPO of a stake of Kazakhstan's state-owned uranium producer went ahead last week, pending listing in London.

-Kazatomprom IPO oversubscribed
-Spain to phase out nuclear power
-Spot price ticks up again

By Greg Peel

Last week the annual United Nations' Economic Commission for Europe's Ministerial Conference of the International Forum of Energy for Sustainable Development, typically abbreviated to the much simpler UNECEMCIFESD, was held. This year's event provided a milestone.

For the first time, nuclear power was included in the program.

World Nuclear Association Director General Agneta Rising said in Kiev, "Substituting energy supplied by fossil fuels with electricity generated from nuclear energy and other low-carbon sources is a practical proposition to deliver a clean energy transition".

The Spanish minister clearly nodded off, given last week Spain announced the country would shut down its last coal-fired and nuclear power plants before 2030. By then the world's fifth largest economy hopes to be sourcing 70% of its electricity from renewable sources, and by 2050 the plan is for solar, wind and hydro-power to account for 100%.

Another Milestone

Kazatomprom last week became the first ever Kazakh national company to be listed on an international stock exchange. The uranium miner was previously fully owned by the Kazakh sovereign wealth fund, Samruk-Kazyna, but an IPO saw 15% of the company placed at a value of US$451m, implying a total market cap valuation of US$3bn.

According to Kazatomprom, the IPO was 70% oversubscribed, but one third of the IPO was snapped up by Kazakhstan's state-run pension fund. The stock will list on the local Astana Exchange, the strategic partners of which are the Shanghai Stock Exchange and the Nasdaq, but also on the London Stock Exchange.

The week before last saw the launch of an IPO for investment fund Uranium Trading Corp, but so far the company has not made its debut appearance on the Nasdaq. Back in July the world's first listed uranium investment company, Yellow Cake, made its debut on the London Stock Exchange.

For many, notes industry consultant TradeTech, initial results of these IPOs serve as a measure of confidence in the potential upside of the uranium market.

Onward, Ever Upward

Last week saw 700,000lbs U3O8 equivalent change hands in five transactions on the uranium spot market, TradeTech reports. The consultant's spot price indicator ticked up another US5c to US$29.15/lb.

No transactions were reported in term markets, and TradeTech's term market indicators remain at US$30.00/lb (mid) and US$31.00/lb (long).

While utility interest is quietly rebuilding, TradeTech notes a marked preference for sellers with a demonstrated ability to deliver from primary production and strong financial backing. Perhaps this is a nod to ongoing purchases of uranium in the spot market in order to satisfy contract obligations by produces who have shut down their own production.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms