Henry To reports that in two separate articles last month (Modi Budget Boosts Bullish Outlook for Indian Stocks and Investing In The Potential of New Asian Infrastructure Investment Bank), he discussed the importance and imminent rise of infrastructure spending in Asia, supported by the China creation of the $100 billion Asian Infrastructure Investment Bank (AIIB) and the desperate need for infrastructure in the region, particularly in India. This week, China announced that 57 countries are joining the AIIB as founding members, including U.S. allies such as Australia and South Korea, as well as major economies including France, Germany, and the U.K.
This bank, along with the China simultaneous creation of the $40 billion Silk Road infrastructure fund, is part of Chinese President Xi Jinping New Silk Road Economic Belt strategy to integrate the Eurasian continent via improved infrastructure. He estimates that this initiative will provide an incremental $50 billion a year in infrastructure financing in developing Asian countries going forward and could rise further as more global investors look to invest in higher yield projects in a world of low or even negative interest rates.
Consider that overall infrastructure spending by the World Bank and the Asian Development Bank (ADB) totaled only $44 billion in the last fiscal year, a dismal number given the ADB 2010 estimate of $8 trillion of infrastructure needs in the region, the creation of the AIIB is no doubt a game-changer for Asian infrastructure investments.
Currently, most uranium investors are focused on the timing of Japan nuclear power policy, after the country shut down all of its nuclear reactors in the wake of the Fukushima nuclear damage from the tsunamis in March 2011. A local court removed a temporary injunction blocking the restart of two nuclear reactors in the Fukui prefecture, and hence the Japanese Prime Minister Shinzo Abe is intent on restarting the Japanese nuclear industry soon.
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