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Noble in nuclear business

Looking at the article, it’s posted at 4:41 pm, which is 20 mins before the market close but yet the price is not bullish. Something is just not right. Why is big players shunning this stock? Is the nuclear business not going to improve the earnings? Or is it because there are a lot of barrier and obstacle getting the business going.

Noble Group, which counts China’s sovereign wealth fund as a shareholder, plans to expand into supplies of nuclear fuel to meet rising demand from China and India, its executive chairman said.

The company bought a 5.1% stake in USEC Inc., a U.S. provider of enriched uranium producing 50% of the fuel in the world, Tobias Brown said in an interview in Singapore today. Of all the nuclear plants being built, about half are in China, he said.

“We are looking carefully at the provision of nuclear fuel to Asia,” said Brown, 47. “There’s no doubt that one cornerstone of energy production in Asia will be the use of nuclear power generation.”

China’s demand for uranium may rise to 20,000 metric tons a year by 2020, more than a third of the 50,572 tons mined globally last year, according to the World Nuclear Association. India’s needs will grow 10-fold to 8,000 tons as it quadruples nuclear-power capacity to 20 gigawatts, according to Jagdeep Ghai, finance director at state-owned Nuclear Power Corp.

Noble is keen to secure a share in the provision of processed fuel as opposed to mined raw uranium because the barriers of entry to uranium enrichment is steep, Brown said.

USEC has U.S. regulatory clearance to sell enriched uranium to mainland China, the New York Times said in a report in June.

And to digress a bit, another news hit Golden Agri, one of the commodities counter in SGX. I’m just worried bad news starts coming out slowly with STI getting quite toppish. Maybe this news has dragged down the commodities sector.

Golden Agri-Resources (E5H.SG) last off 0.9% at $0.575, underperforming other Singapore-listed plantation stocks, as potential risk of more customers ending business with unit Sinar Mas (SMAR.JK) weighs, says Dow Jones.

Concerns stoked by recent comments from global industry association Roundtable on Sustainable Palm Oil that Sinar Mas not complying with its code of conduct.

Companies like Burger King, Nestle, Unilever have already stopped doing business with Sinar Mas following Greenpeace’s allegations of destructive planting practices.

“The comments by RSPO will further complicate Golden Agri and Sinar Mas’ efforts to regain customer confidence,” says Deutsche Bank, which has Hold call with $0.59 target. Still, BNP Paribas, which has Buy call with $0.76 target, says any damage to Golden Agri likely minimal; “the market is unwilling to pay a premium for the RSPO-certified CPO.”

Orderbook quotes tip $0.56 support. Indofood Agri (5JS.SG) +0.9% at $2.31, Wilmar (F34.SG) flat at $6.17, First Resources (EB5.SG) +5.3% at $1.19.

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  1. September 28, 2010 at 1:04 pm

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