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* TSX ends up 1.1% at 20,452.87
* Posts its highest closing level since Sept. 18
* Industrials and bond proxies among biggest gainers
* National Bank of Canada rallies after Q4 results
Dec 1 (Reuters) – Canada’s main stock index rose on
Friday to a two-and-a-half-month high as comments by Federal
Reserve Chairman Jerome Powell raised investor hopes that major
central banks will shift to cutting interest rates in 2024.
The Toronto Stock Exchange’s S&P/TSX composite index
ended up 216.58 points, or 1.1%, at 20,452.87, its
highest closing level since Sept. 18.
“Santa (Claus) is coming to town and he is rewarding all
stock holders,” said Barry Schwartz, portfolio manager at Baskin
Financial Services. “Today, Federal Reserve Chairman Powell
spoke and I think the markets are thinking that global
synchronized rate cuts are coming in 2024.”
U.S. stocks also advanced as Powell reaffirmed the U.S.
central bank’s intent to be cautious on raising interest rates
further to tame inflation but also offering fresh optimism on
its progress so far.
The industrials sector rallied 2.1%, while bond proxies,
such as real estate and utilities, which tend to produce
predictable cash flows and could particularly benefit from a
peak in interest rates, were among the other standout
Real estate rose 2.2% and utilities ended 2% higher.
The TSX notched in November its biggest monthly advance in
Financials added 0.7% on Friday as National Bank of Canada
reported higher fourth-quarter profit. Its shares rose
4.8% while shares of Bank of Montreal also climbed,
rising 2%, as the bank forecast more cost savings from its $16
billion acquisition of U.S. lender Bank of the West.
The banks “are tightening up on lending and could face
another challenging year ahead, but we’re not seeing growth
falling off a cliff,” said Angelo Kourkafas, a senior investment
strategist at Edward Jones.
Domestic data showed the economy adding 24,900 jobs in
November, more than analysts expected.
(Reporting by Fergal Smith in Toronto and Shashwat Chauhan in
Bengaluru; Editing by Tasim Zahid and Sandra Maler)
Uranium sector ‘scrambling’ to fill supply gap
November 23, 2023
The price of uranium will hit triple-digits for the first time since 2007 as nations weaning off oil and seeking energy security deplete nuclear fuel supplies, the world’s largest investment fund in the physical metal says.
The spot price for uranium should rise from $80 per lb. this week to $100 or more per lb. within a year to 18 months, John Ciampaglia, CEO of Sprott Asset Management, which runs the Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD). The trust holds 62 million lb. of yellowcake uranium valued at $4.9 billion. Global yellowcake supply might reach 145 million lb. this year or next, Ciampaglia said, citing the World Nuclear Association. But annual demand is already at 180 million lb. and the industry group expects it to nearly double to 300 million lb. by 2040. Some 60 nuclear plants are under construction globally and more are planned. Countries like Germany and Japan that considered phasing them out are reversing course.
“You’ve got an industry that’s scrambling to meet the supply requirement that’s forming and the market today is already out of balance,” Ciampaglia said . “Around 2030, there’s a very large supply deficit that could play out and that’s why the price of uranium is obviously starting to move.”
The price of yellowcake, also known as triuranium octoxide or U3O8, has increased more than 50% this year. The green energy transition is gathering pace as governments from California to Europe ease aversion to nuclear power more than a decade after the Fukushima disaster. They also want reliable and independent backups to wind and solar energy grids after the war in Ukraine showed the pitfall of relying on Russian natural gas.
Sanctions against Russia don’t play a large part in supply bottlenecks, Ciampaglia said. They skirt former Soviet republic Kazakhstan, which produces a world-leading 45% of all uranium, although Russia itself produces about 8% of world output. However, the country accounts for about 40% of global uranium enrichment plants needed to make fuel, which is forcing the West to rapidly invest and develop its own, he said.
Goehring & Rozencwajg, a New York-based fund manager, began investing about a fifth of its $500 million in assets under management in the uranium sector in late 2017. Cameco had stated its closure plans and state-owned Kazatomprom (LSE: KAP) of Kazakhstan said it would curb output.
A coup in July in Niger, which produces 4% of the metal, has prevented its output from reaching the market. The lack of supply is exacerbated by funds like Sprott that buy the physical asset and take it off the market, Goehring & Rozencwajg said in a report.
“Financial accumulation is likely to accelerate once speculators realize the small size of the market and the precarious commercial inventory situation,” the company said. “Fuel buyers feel insecure and under-covered for the first time in nearly 15 years. Although it is an opaque market, all signs point to uranium entering into a sustained and frenetic bull market.”
Sprott says it’s considering a 5% part of its fund that could be bought by, say, a utility or govern- ment, at a discount to the spot market price and actually be used in a power plant. The concept must be approved by regulators, Ciampaglia said. The firm also offers two exchange-traded funds of uranium company equities. About 80% of the trust’s investors are large institutions, hedge funds or family offices, he said.
“Our goal is to have as large a vehicle as possible, as liquid as possible so that more and more investors can participate in the sector, which is obviously going through a renewed level of inter- est,” the CEO said. “Most of the world is pivoting back to nuclear energy after largely ignoring it for 10 years.” ●
By Adriano Marchese
International Battery Metals said it has received a preliminary approval to list on the venture exchange arm of the Toronto Stock Exchange which should help with exposure to more investors.
The Canadian Securities Exchange-listed lithium extraction company said Friday it has received conditional approval to list on the TSX Venture Exchange. International Battery said it intends to satisfy the conditions, after which it will have a date for listing.
The company’s management believes that a listing on the TSXV, one of the world’s largest global public venture markets, will help increase its exposure to a larger audience of institutional investors.
Additionally, the company plans to raise up to $850,000 in a private placement of 1.6 million units to use toward its operations.
Each unit, made up of one common share and one warrant, will be placed for a price of 70 Canadian cents apiece (52 U.S. cents).
Write to Adriano Marchese at firstname.lastname@example.org