News to Sarah Palin: The Middle East Goes Nuclear

Brian Hicks

Updated November 21, 2010

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.

This may come as news to Sarah Palin, but the nuclear genie has been out of the bottle for a long, long time.

The “mad mullahs” of her nightmares are just the tip of the iceberg.

All across the oil-rich Middle East, Muslim nations besides Iran are about to go nuclear as well.

You see, the power of the atom works the same everywhere it’s tried — even if it keeps her up through a long Alaskan night.

That’s true, no matter how many planes you send to bomb it.

A nuclear Middle East

Like it or not, a Middle East with a nuclear-powered future is one that cannot be stopped. Not even in Iran.

Because while these countries may be flush with oil, the same is not true for natural gas. The primary source for electricity generation, natural gas production in the Middle East has begun to lag — opening up the door for nuclear power.

So while Iran works to start up its long-dreaded plant in Bushehr, 12 other countries in the region are taking steps toward joining them: Saudi Arabia, Syria, Kuwait, Qatar, Morocco, Algeria, Tunisia, Egypt, Lebanon, and United Arab Emirates are among them.

And according to the World Nuclear Association, at least 15 new reactors are expected to be built in the volatile region by 2025.  

Even the often violent African nation of Sudan is on the list. A noted ally of Iran, the troubled nation announced in August it intends to build a nuclear reactor for peaceful purposes by 2020.

The driver for it all is increased electricity demand as places other than the West continue to modernize. That increase takes more power — even in places with an abundance of oil.

But this trend is hardly confined to the Middle East…

Around the world, nuclear energy is experiencing a global power surge. Worldwide, 52 reactors are already under construction — with 344 more reactors planned.

That’s almost four times the number of reactors already producing 20% of the power in the U.S. With 104 sites, the U.S. operates the largest fleet of nuclear power plants in the world.

That also includes plants being built in Korea, where our own Nick Hodge has set his sights on another big nuclear power winner.

Three power plays

And you can expect this trend to continue. According to the International Energy Association (IEA), world electricity demand is likely to grow 2.7 percent a year from now until 2015, and then at 2.4 percent annually until 2030 — giving this nuclear bull market an even bigger boost.

For investors, that means following a growth trend that is already firmly in place in the rest of the developing world.

And here are three easy ways to ride this wave with investments in nuclear-weighted exchange traded funds (ETFs):

  • PowerShares Global Nuclear (NYSE: PKN) — This broad-based ETF includes nuclear holdings in reactors, utilities, construction, technology, equipment, service providers, and fuels. It normally invests at least 80% of total assets in the nuclear energy industry.
  • Market Vectors Nuclear Energy (NYSE: NLR) This fund is down off of its uranium-based highs in 2007; but with uranium prices now projected to go higher, this materials-weighted EFT is rising.
  • Global X Uranium (NYSE: URA) A newcomer, this ETF’s exposure is primarily in uranium. URA invests in global uranium miners, refiners, and equipment makers.

As for some other places to power up your portfolio, here are a few of the best investment ideas from the pages of this week’s top-read Wealth Daily and Energy & Capital articles.

By the way, we launched another free service earlier this week called the Wealth Wire. It’s an easy-to-read look all of the must-see financial news compiled everyday by our editors. To learn more about the Wealth Wire, click here.

Have a great weekend.

Your bargain-hunting analyst,

 steve sig

Steve Christ
Editor, Wealth Daily

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