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31st January 2013
Antwerp Diamond Trade Fair Attracts Many First Timers
Some 500 visitors attended the fourth Antwerp Diamond Trade Fair, a forum created to increase trade for Antwerps diamantaires.
Many of the visitors were retailers and other members down the pipeline that were first time visitors to the diamond trading center. Arriving from Asia, Europe, the Middle East, North America and the Russian Federation, the 83 exhibitors had a chance to establish direct relations with them.
The ADTF 2013 provided a range of events for visitors, including breakfast seminars. Renowned jewelry designer Reena Ahluwalia gave a presentation titled "design for business," in which she discussed what jewelers need to consider when working with a designer and how to develop a mutually successful relationship with them.
Cynthia Unninayar, Editor-in-Chief of Couture International Jewellery (CIJ) spoke about the ten top trends and colors in jewelry design in 2013.
14nth November 2012
76 Ct D/IF Diamond Sold for $282,545 P/C, Doubled its Value in 20 Years
The 76.02 carats, D / IF Cushion cut Archduke Joseph Diamond sold for $21,474,525 on Tuesday night. The $282,545 per carat (p/c) price is a record for a colorless diamond sold at an auction.
The diamond was previously auctioned at Christies Geneva in 1993 for $6.5 million, or $10.4 million in today’s value. This is a 106.2 percent appreciation in 19 years.
Christies Geneva auction of Magnificent Jewels succeeded to sell 19 lots for more than $1 million. Among them a 3.33 carats shield-shaped Fancy Intense blue, SI1 clarity diamond brooch that sold for $2,467,645 ($740,000 p/c) to a European trader.
A 12.62 carats brilliant-cut D / VVS1 diamond ring by Van Cleef & Arpels sold for $1,640,525 ($130,000 p/c) to private Asian buyer.
A 21.85 carats pear-shaped D / VVS2 diamond fetched $79,700 p/c.
The Auction totaled $85.1 million, selling 84 percent by lot and 86 percent by pre-auction estimated value.
"This extraordinary result, combined with the total achieved for the category in May, concludes the most successful year for Christie’s Jewellery department in Switzerland, with annual sales exceeding SFr.183.9 million ($195.2 million)," the auction house said last night.
Some 147 buyers from 28 countries participated in the auction.
7nth December 2012
6.54 Ct Fancy Intense Pink Diamond Fetches $8.6 Million
platinum ring set with a 6.54-carat Fancy Intense pink Internally Flawless oval-cut diamond sold for $8.6 million at Sotheby’s New York City auction. The ring, purchased by Laurence Graff, was the top grossing item. Per carat it sold for $1,313,144.
Graff also purchased the second and third top grossing items. He bought a 52.73-carat emerald-cut VS1, fancy vivid yellow diamond from a private collection for $3.9 million ($73,781 p/c).
The third item was a 22.16-carat, Emerald-cut, D / VVS1 type IIa diamond flanked by two baguette diamonds for $3.44 million ($155,347 p/c).
The Emerald cut diamond is set in a platinum ring that Graff designed.
The jewels offered at the auction were from a number of estates. Those from the collections of Estée Lauder and her daughter Evelyn H. Lauder sold for $22.2 million, above their overall high estimate of $18 million.
Proceeds from the collections will benefit The Breast Cancer Research Foundation, founded by Evelyn Lauder in 1993.
All together, the December 5 auction totaled $64.8 million.
11nth December 2012
Graff Buys 50 Carat Diamond for Third Time at Christie’s New York Sale
The top lot at Christie’s December 10 Magnificent Jewels sale was a 50.01 carats rectangular-cut, D-color, potentially flawless diamond. The item was purchased by Laurence Graff for $8.37 million or $167,400 per carat (p/c). This is the third time Graff has purchased the diamond.
The diamond was previously sold at Christie’s New York to Graff for $4.2 million in 2005. In the seven years that past since that known purchase, the diamond appreciated by 99.3 percent. It is not known for how much Graff sold the diamond.
“This is the third time that I have owned this beautiful diamond and I am as thrilled today as I was the first time,” said the noted trader. “Diamonds of this exceptional caliber have a life and legacy that carries on beyond us all. This is one of the finest D-color diamonds in the world and I am delighted to have it back again.”
The 300-lot sale realized a total of $32.5 million with strong sell-through rates of 84 percent by lot and 86 percent by value.
Other highlights of the auction included a new per-carat record for a Kashmir sapphire at auction, with the sale of an 8.91 carat sapphire for $1.37 million or $154,000 p/c.
The final lot of the season was an exceedingly rare fancy reddish-orange diamond of 3.15 carats. The unique stone is the largest reddish orange diamond ever graded at the Gemological Institute of America (GIA).
Exhibiting two of the rarest hues in the world of diamonds, this rarity soared beyond its low estimate of $700,000 to sell for just under $2.1 million, setting a new world auction record for a reddish-orange diamond and a new per-carat record price of $666,200.
For 2012, Christie’s New York jewels sales total more than $163 million. This includes 29 jewels over the $1 million mark, of which four items exceeded $7 million.
19 December 2012
Victoria’s Secret 2012 Fantasy Bra Valued at $2.25 Million
It was the time many had been waiting for as the 2012 Victorias Secret Christmas Dreams & Fantasies catalogue dropped into mailboxes across the U.S. Top of the fantasies in this years catalog is the $2.5 million bra and belt set modeled by Victorias Secret Angel Alessandra Ambrosio.
The “Floral Fantasy Bra Gift Set,” crated by London Jewelers, is hand-set with more than 5,200 stones, including amethysts, sapphires, tsavorite, rubies and white, pink and yellow diamonds, all set in 18 karat rose and yellow gold.
The bra has two removable diamond flower pins and the drop centerpiece features a 12.5carat and a 20-carat white diamond.
For a buyer on a budget, Victoria’s Secret is also offering the $500,000 "Bombshell Fantasy Fragrance" this holiday season. This is the companys Bombshell eau de parfum in a unique bottle, decorated with white, pink and yellow diamonds, sapphires, tsavorite, rubies plus a 10-carat white diamond and an exquisite one of a kind, hand-carved tourmaline butterfly.
Both the perfume bottle and the bra were inspired by the idea of a dreamy fantasy garden filled with vibrant colored flowers and heavenly angels.
Fantasy aside, perhaps the real stunner is that, unlike previous creations, this year’s bra actually looks wearable!
19 December 2012
The Diamond as Big as The Ritz
Bigger, brighter, better – from record-breaking auctions, to large diamond finds, 2012 was a year that saw some diamond items worthy of a book of their own!
There’s been lots of good news coming out of the Karowe diamond mine in Botswana over the past year. Perhaps the best news was the discovery of a rare 9.46-carat rare Type II blue diamond. Where there’s one, more are sure to follow…
The 1.32 Carat Argyle Siren
Image: Rio Tinto Diamonds
Never one to reveal pricing information, Rio Tinto Diamonds said this year’s Argyle pink diamond tender delivered “exceptional” results. The top item of this years sale was a 1.32-carat radiant cut Fancy Vivid Purplish Pink VS2 diamond named Argyle Siren, which was bought by John Glajz.
A 131.5 carat white diamond was discovered at the Lonrho Mining Lulo Concession in north-eastern Angola. The diamond was the largest stone recovered by the Perth-based company since it began treating alluvial gravels through its Dense Media Separation plant at the Lulo project in 2010.
It was a good year for diamonds at auction. The Clark Pink, a 9-carat cushion-cut fancy vivid purplish-pink diamond ring by Dreicer & Co. sold for a U.S. auction record of $15,762,500 or $1.75 million per carat.
Another pink making the news was a 12.04 carat fancy intense pink diamond sold for $17.5 million at Christie’s spring sale of Hong Kong Magnificent Jewels, giving it a price of $1,452,267 per carat (p/c). The Martian Pink was sold after a 10-minute bidding war. The diamond, which was sold by Harry Winston in 1976, had a pre-sale estimate of $8.4-$12 million.
At the same sale, a record $551,000 per carat was paid for a 6.04 carat Burmese ruby while a private Asian buyer bought a pair of brilliant-cut D / Flawless diamonds of 10.88 carats each for $ 4.9 million, or $223,000 p/c. D / Flawless diamonds weighing more than 10 carats are a hot purchase among investors in diamonds. A matching pair of such a diamond carries an extra premium.
The Jewels For Hope: The Collection of Mrs. Lily Safra sale, which took place at Christies Geneva, could be said to be the auction of the year. The sale, which was 100 percent sold by lot and by value almost doubled pre-sale expectations to realize a total of $37,924,551. But what made the result of the sale so outstanding is that The Lily Safra Foundation donated the full proceeds of the sale to charitable organizations.
The 10.48 Fancy Deep Blue
Diamond Purchase by Laurence
Graff for $10.86 Million
Prior to the sale, the Foundation announced 20 charities that would benefit from the sale. Given the outstanding result, the Foundation announced an additional 12 organizations that it will now be able to support. The top lot of the night was a 32.08 carat cushion-shaped Burmese ruby and diamond ring, by Chaumet. The ring, which had an estimate of $3-$5 million, sold for $6.74 million, making it the most expensive ruby sold at auction. To reflect the sale, it has been renamed “The Hope Ruby.”
In April, a 3.54 carat fancy blue SI1 diamond set in a platinum ring by Tiffany was the leading item at Sotheby’s Magnificent Jewels sale, selling for $2,434,500. The result was nearly five times the $0.5 million top estimate the auction house estimated. According to Sotheby’s, the result was a record price for a fancy blue diamond.
Perhaps the biggest sale of the year was a diamond that was, if not as big as the Ritz, then pretty sizeable. The 76.02 carat, D / IF cushion cut Archduke Joseph Diamond sold for a whopping $21,474,525. The $282,545 per carat price is a record for a colorless diamond sold at an auction. The diamond was previously auctioned at Christie’s Geneva in 1993 for $6.5 million, or $10.4 million at today’s value. This is a 106.2 percent appreciation in 19 years.
Just days later, it was the turn of rival auction house Sotheby’s to host its Magnificent Jewels sale. The star lot of the night was the sale of an exceptionally rare Fancy Deep blue, Flawless 10.48 carat diamond. The stunning item was bought by Laurence Graff for $10.86 million. At $1,036,273 p/c, this was not only a world record per carat price for a Flawless Fancy Deep blue diamond, but it was also a world record price for a Briolette cut diamond at auction.
3 June 2012
35.60 Ct Pink Part of Queen Elizabeths Diamond Jubilee
The Diamond Jubilee celebrations are ongoing in the Untied Kingdom and around the world this week, and what is a diamond jubilee without a few exceptional diamonds.
Celebrating Queen Elizabeth II’s 60th anniversary at the throne, a fancy pink-brown color, 35.60-carat cushion cut Forevermark diamond went on display Friday in the Tower of London to mark the special occasion.
The Steinmetz Forevermark Jubilee Pink Diamond features a unique inscription number on the table, 19522012. It marks the year the Queen came to the throne, 1952, and the 60th year of her reign, 2012.
Invisible to the naked eye, the inscription is only 1/5000th of a human hair deep, and can only be seen using a special viewer. Special photography has been used in the display to reveal the inscription for visitors.
The diamond will form the centerpiece of a new display, charting its journey from the mine, through to cutting and polishing, and finally to the Martin Tower in the Tower of London.
Specialist tools and rough and polished diamonds, will be used to illustrate the master craftsmanship necessary to unleash the beauty of this remarkable gem.
It took Steinmetz six months to polish the diamond from the 179.96-carat rough diamond it started with.
4 June 2012
Fancy Cut Sales Strong as JCK Las Vegas Wraps Up
While rounds and princess-cut diamonds remain the most popular diamond shapes, sales of fancy shapes have been strong at JCK Las Vegas, which closes today. Pears, radiants and ovals have done well with cushions proving especially desirable.
The reason for the rise of the fancy cuts is clear: rounds are considered expensive and with their relatively lower prices, fancies offer buyers bigger pieces for less money. As one trader explained, “the market is full or rounds, which are moving slowly and expensively. Cushions are really in fashion more people want them and even though they are less common in the market, they are cheaper.”
Those buyers fishing for really cheap goods – which they could not find on the JCK show floor – headed over to the antiques fair that was taking place at the same time. One person, who reported seeing many diamantaires at that show, commented that he hoped the fair wouldn’t be completely taken over by traders looking for cheap, second-hand diamonds.
Back at JCK, most diamond buyers were from the U.S. Most Far Eastern buyers appear to be waiting for the Hong Kong show, which takes place in a couple of weeks. Perhaps this is where the Indian buyers, of whom traders said there were fewer than usual, will be doing their buying.
Many traders were sanguine about the buyers and browsers they had seen. Even if they sold less than they wanted, they know that the diamond business is all about relationships and for many, their presence at the show is as much about PR and continuing those relationships as it is about buying.
Enav Schwartz of A. Schwartz & Sons said the show had been fairly good, although he did come with relatively low expectations. “People came here in a bad mood,” he said. “I hope the show has changed that mood.”
Schwartz said he had sold a broad range of goods, especially "bread and butter" rounds in VS-SI clarities with GIA and EGL certificates.
Israel-based fancy color specialist Leibish & Co. said the show had been better than expected, especially on Friday and Sunday (the company, along with many others was closed on Saturday).
However, said CEO Yossi Polnauer, they had not met as many new clients as they expected. “Most people set appointments in advance. They came with a target and were looking for specific goods.”
In terms of color goods, 1-5 carat yellows were selling the most, followed by pinks below 1 carat. The company has also started selling diamonds set in jewelry, which had been a decent seller, and is also making an increasing number of custom engagement rings set with colored diamonds.
Polnauer said some of the increased demand for colored stones is a result of people increasingly looking towards colored diamonds as an investment vehicle. The colored market, he said, is getting stronger and stronger.
Nilesh Shah of Nice Diamonds also said it had been primarily an appointment-driven show, although the company had seen more drop ins than in the past few years.
In terms of good sellers, Shah said he has sold a number of black and brown diamonds. People had been making enquires about pinks and blues, he said, but when they find out the price of these natural colored stones, they tend to end up buying treated stones.
The fancy colors were especially popular in fancy cuts, notably radiants and cushions in 0.5-1 carats. White goods, he said, were moving in larger sizes, in GHI colors and SI2 clarity.
25 June 2012
Christie’s Paris Jewels Sale Tops $3.8 Million
A fancy yellow circular-cut diamond ring topped the bidding stakes at Christie’s Paris Jewels sale, which took place in the French capital yesterday. All told, the sale realized €3,100,088 ($3,870,460), selling 80 percent by lots and 84 percent by value.
The fancy yellow diamond ring sold for €499,000 ($623,002) or $23,869 per carat.
“Natural pearls, diamonds and signed jewels remain the three most popular themes and fetched strong prices in today’s Paris auction,” said Marie-Laurence Tixier, head of the Paris jewelry department.
Another strong item was an antique natural pearl and diamond brooch, which sold for €121,000 ($151,069), six times its pre-sale high estimate.
Proving the current trend for all things Art Deco, a rock crystal and diamond necklace by Cartier went for €331,000 ($413.254) while a rock crystal and diamond bangle by Suzanne Belperron, which was created in 1938, sold for €121,000 ($151.069).
25 June 2012
Harry Winston Rough Sales Double, Profit Triples
Harry Winston Diamond Corporation posted a 34 percent sales increase in the first quarter, boosted mainly by selling more rough diamonds and better retail sales.
Net profit for the first quarter ending April 30, 2012 was $11.6 million compared to $3.6 million in the first quarter of the prior year.
The company more than doubled its rough diamond sales to approximately 1 million carats, but sold it for much less, about $88 per carat on average compared with $132 p/c last year. The lower price was primarily the result of the sale of lower priced goods held in inventory since October 2011.
According to the company, a decision to hold back some higher priced goods in the first quarter of fiscal 2013 due to an observed imbalance in the rough and polished diamond prices for these goods was another reason for the lower averaged achieved price.
Rough diamond production at Diavik for the calendar quarter ended March 31, 2012 was 1.6 million carats compared to 1.4 million carats in the first quarter of the prior year.
Luxury sales increased 26 percent to $103.5 million in the quarter compared to $81.9 million in the first quarter of the prior year. The increase was primarily driven by positive mix with increased sales of higher-margin access and core products, the company said.
"Jewelry and timepiece sales demonstrate our success in broadening the reach of the brand beyond reliance on a small, ultra high end market," said Robert Gannicott, Chairman and CEO.
25 June 2012
Diamond Divers Hit Reality Show
31 January 2012
Fifteen Percent to Say it with Jewelry this Valentine’s Day
Romance is in the air as Valentine’s Day approaches and with consumer spending set to rise; it seems as if retailers are going to be getting a little more affection than last year. Love-struck consumers are expected to spend 8 percent more than in 2011, with four million people expected to announce their engagement on February 14, according to the latest American Express Spending & Saving Tracker.
Consumers are expected to spend $196 on gifts this year, and more of them are planning to do it – 54 percent in 2012 compared to 41 percent in 2011.
While flowers and gifts cards are the most popular options – 29 percent and 19 percent respectively – jewelry purchases are expected to total 15 percent of gifts, edging out the somewhat less romantic electronics option, which is predicted to be the choice of some 13 percent of consumers.
“Whether people are planning to get engaged, or just celebrate the holiday with flowers and a night out, consumers are telling us they can open their wallets a little wider for Valentine’s Day,” says Sonali Chakravorti, vice president at American Express. “We’ve seen a consistent trend of consumers saying they will spend more, from holiday shopping to 2012 travel plans, and spending plans for February 14 are no exception.”
While Valentine’s Day will be a prime proposal occasion, American Express estimates that 14 million expect a proposal at some point in 2012, which is good news for jewelers.
Keeping all those future marriages in mind, the survey also looked at the price of engagement rings. Forty-eight percent of single consumers feel that anywhere between $1,000 and $5,000 is an appropriate amount for couples to spend on an engagement ring this year.
Others, however, feel the price range should be even lower, with 22 percent citing $1,000 to $1,999 as appropriate, and 21 percent citing less than $500. A high-spending 5 percent feel that shelling out $10,000 or more for the ring is most suitable.
The American Express Spending & Saving Tracker research was completed online among a random sample of 2,000 adults, including the general U.S. population, as well as two sub-groups – the Affluents and Couples. Affluents are defined as having a minimum annual household income of $100,000. Couples are defined as single living with a partner or single with a significant other.
31 January 2012
Middle East Buyers Strong at Third Antwerp Diamond Trade Fair
2 January 2012
Palace to host diamond exhibition for Diamond Jubilee
Buckingham Palace is to display an exhibition of diamonds to mark the Queens Diamond Jubilee.
The Royal Collection exhibition, which will take place in August and September, will chart the precious gemstones association with British monarchs over the last 200 years.
It will include some of the Sovereigns personal jewels.
Among items on show will be the Girls of Great Britain Tiara, which the Queen wore at a state banquet in November.
It was a wedding present to Princess Victoria Mary of Teck, later Queen Mary - the Queens grandmother - on behalf of the Girls of Great Britain and Ireland in 1893.
Originally crafted with upright pearls around the top and a bandeau base, it was altered in 1920 by Queen Mary who replaced the pearls with diamonds and removed the base.
The monarchs Williamson Brooch features a rare pink diamond.
The tiara is one of the Queens favourites and is known as "Grannys tiara", being a wedding present from her grandmother in 1947.
Visitors to the exhibition, which the Royal Collection website says will cost £18 for an adult, will also see the necklace and earrings worn by the Queen at her coronation ceremony in Westminster Abbey in 1953.
The collet necklace is formed of 25 large graduated cushion-shaped brilliant-cut diamonds and a central drop-shaped pendant of 22.48 carats.
It was created in 1858 for Queen Victoria - the only other British monarch to celebrate a Diamond Jubilee - from a Garter badge and ceremonial sword.
Historic pieces such as Queen Victorias miniature personal crown, which contains nearly 1,200 diamonds, will also be on view.
The monarchs Williamson Brooch which features a rare pink diamond - said to be the finest in existence - will be also be on display.
The diamond exhibition is one of a number of exhibitions taking place to mark the Queens 60 years on the throne.
Sixty photographs of The Queen, including the work of leading press photographers of the past six decades, will go on display at Windsor Castle from 4 February to January 2013.
An exhibition of some of the finest treasures from the Royal Collection will go on display at The Queens Gallery, Palace of Holyroodhouse, between 16 March and 16 September.
Highlights of the selection of 100 outstanding works - which has been made from eight royal residences and includes paintings, drawings, manuscripts, furniture and jewellery - include paintings by Rembrandt and Monet and drawings by Michelangelo.
There will also be a touring exhibition of 10 of Leonardo da Vincis finest drawings in the Royal Collection. The exhibition will visit Birmingham, Bristol, Ulster, Dundee and Hull.
In addition, the largest ever exhibition of Leonardo da Vincis studies of the human body will be shown at The Queens Gallery, Buckingham Palace, between 4 May and 7 October.
Jonathan Marsden, director of the Royal Collection, said it was "delighted to be sharing, on behalf of The Queen, some great treasures with museums and galleries across the UK".
"This is a fitting tribute to Her Majestys commitment over the past 60 years to the care and conservation of the Collection and to increasing public access," he said.
22 December 2011
Petra Diamonds sells 4.8-carat blue diamond from Cullinan for $1.45 million
Diamond miner Petra Diamonds has announced the sale of a 4.8-carat blue diamond from its Cullinan mine for $1.45 million, equivalent to more than $300,000 per carat.
The diamond was sold at the firms most recent tender earlier this month.
The firm said that it is the highest amount it has achieved for any rough diamond it has sold on a per carat basis.
Petra is also confident that it is one of the highest values per carat ever achieved on the sale of a rough diamond by any rough diamond producer. Cullinan is renowned as the world’s only reliable source of blue diamonds and this sale demonstrates how rare and desirable they are to the international market.
26 December 2011
U.S. singer Britney Spears shows off $92,000 diamond engagement ring
American singer Britney Spears had a Christmas surprise after receiving a diamond engagement ring from fiancé Jason Trawick who paid $92,000 for the diamond band.
Trawick helped design the four-carat round-cut-diamond-and-platinum ring that also has diamonds set around the band which was made by jewellery designer to the stars Neil Lane, according to media reports.
Trawick is Spears agent and after presenting her with the ring, they published the news on Twitter.
Spears later showed off the ring at Trawicks 40th birthday party in Las Vegas over the weekend.
20 December 2011
Christie’s says Elizabeth Taylor Collection auctions raised almost $157 million
The auctions of The Collection of Elizabeth Taylor at Christie’s New York from December 3-17 realized a combined total of $156,756,576 with every single item sold, the auctioneer reported.
The sale drew interest from bidders throughout the world, who gathered in Christie’s flagship Rockefeller Center saleroom to compete in person, on the phone, on-line and by absentee bid to win one of the Collection’s 1,778 lots of jewellery, fashion, decorative arts and film memorabilia.
The total far exceeded Christie’s pre-sale expectations for the sale as a whole and for individual items, which were frequently sold for five, 10, or even 50 times their estimate in some cases.
The collection generated intense interest from bidders throughout the world, with 36 different countries represented during the four days of live auctions. The historic sale set a world record for the most valuable sale of jewellery in auction history, and set a new bar for the most valuable collection of fashion ever offered at auction.
It also marked the company’s first-ever online-only sale, which ran in parallel to the live auctions at Christie’s New York and generated over 57,000 bids and $9.5 million in additional sales. In total, 26 items sold for over the $1 million mark, and numerous new world auction records were achieved.
All sales proceeds will be directed to the Elizabeth Taylor Trust. A portion of the profits generated by sales of exhibition tickets, event sponsorships and the ongoing sales of select publications will be donated to The Elizabeth Taylor AIDS Foundation (ETAF). An estimated 58,000 visitors viewed highlights from the Collection since September, when Christie’s launched an eight-city global exhibition and tour that reached Moscow, London, Los Angeles, Dubai, Paris, Geneva and Hong Kong.
3 November 2011
With a projected shortfall in diamond supply in the coming years all but ensuring that prices will rise, investors are seeing an opportunity to grow their money with a new breed of diamond investment funds.
(IDEX Online News) – The Letseng Star, a 550 carat, Type IIa, D color rough diamond was sold for $16.5 million, Gem Diamonds announced. The diamond has been sold into a profit sharing arrangement, under the companys new sales and marketing strategy the miner added.
Gem Diamonds recovered the diamond on August 19 at its Letseng mine in the Kingdom of Lesotho. The Letseng Star is currently ranked as the 14th largest white diamond on record and is the fourth diamond of such historical significance to be recovered at Letseng since 2006.
Under, the Letseng Star has been sold into a profit sharing arrangement for a rough price of $16.5 million, payable immediately.
Letseng Diamonds will then further benefit from a significant share of the downstream polished margin uplift resulting from the sale of the polished diamonds cut from the Letseng Star, the diamond miner stated.
"Gem Diamonds strategy of maximizing revenue generation from our rough diamonds by seeking value-added initiatives further up the diamond value chain is gaining importance for the Group, and we are becoming increasingly successful in selling rough and polished diamonds with good margins being realized," said CEO, Clifford Elphick.
3 November 2011
As prices rise and supply falls, investors see diamonds’ potential
With a projected shortfall in diamond supply in the coming years all but ensuring that prices will rise, investors are seeing an opportunity to grow their money with a new breed of diamond investment funds.
November 02, 2011
Take a product that is difficult and extremely costly to locate, mine and bring to the market, while sources of that product are drying up and new mines take years to bring on stream and, generally, are on a relatively small scale. At the same time, demand from major emerging markets is continuously pushing the price of the product higher.
Surely from the point of view of an investor, seeing volatile global stock markets, governments in crisis, and the threat of a double-dip recession and disinflation, this would appear to be a classic investment opportunity? Indeed, investing in diamonds is increasingly being considered as following in the footsteps of gold, providing a worthy investment opportunity and a safe investment haven.
As a result, groups are being established to provide investors, nervous about the state of global stock and bond markets, with both an alternative investment option, as well as benefitting from rising demand and prices for diamonds. Indeed, despite the recent decline in prices for both rough and polished goods following the sharp rises seen in the first half of 2011, analysts still believe that investor interest in diamonds will continue to grow, largely as a result of the supply shortfall that is expected to be felt in the coming years.
RBC Capital Markets analyst Des Kilalea said that in general terms the long-term trend for diamond prices was to go higher which would be positive for diamond funds. "Currently, there is something of a downturn in prices and volatility which could be expected to be a little negative for such funds, but long-term the outlook is good."
Meanwhile, another analyst said that the dip in prices could be a good opportunity for investors to get into funds invested in the market. "In the same way that some more aggressive investors see falls in stock prices as a good time to invest, the same case could possibly be made now for getting into diamond funds,” he stated. “Diamond prices have dropped very sharply in recent months. Is this a good time to invest in diamonds? It depends on your investment appetite."
Although the idea of investing in diamonds has popped up several times over the past decade or so, it generally was not taken further due to the perceived difficulties of investing in gems. Since diamonds are so heterogeneous, unlike gold or platinum for which single prices can be quoted, it traditionally was regarded as difficult to persuade investors to put their money into the gemstone.
In the diamond sector itself, there was a residual reluctance to promote diamonds as an investment tool, mainly because of an ill-fated period in the early 1980s when the price of high-end one-caraters soared, only to collapse spectacularly, leaving a good number of the industrys most well-known companies floundering in its wake.
But the investment experiment in the 1980s was haphazard, and confined largely to the diamond industry, with diamantaires often paying massive premiums on De Beers sight boxes, which frequently were sold unopened time and time again. Furthermore, when prices plummeted, both the industry and the banks rewrote the rule books to prevent such a debacle from reoccurring.
Institutional investors have been considerably more conservative when approaching the diamond industry. A diamond investment trust, established by investment firm Thomson McKinnon in the 1980s, was closed down after a drop in the market. More recently, Diamond Circle Capital Plc, the first publicly listed fund to invest in diamonds, has been standing still for the past two years since it lost more than half of its value in the 2008 crisis as investor interest in its expensive diamonds slumped.
However, several factors have helped change investors positions and persuaded some that such funds can be not only viable, but highly profitable. Firstly, there is the financial volatility which has continued for the past three years since the near financial meltdown of September-October 2008. Then, there are the sharply rising diamond prices seen in the past year or more, and certainly since the start of this year.
In addition, there were widespread reports that the easy portability and inherent value of diamonds further boosted their prices as they were sought after by the wealthy in Middle Eastern states as a result of the so-called Arab Spring earlier this year. Concern among the wealthy political and business elites in the countries of North Africa and the Gulf that popular revolutions could see their wealth confiscated is reported to have persuaded many people to place their cash, and faith, in diamonds.
The renewed interest in diamonds as an investment tool was certainly reflected in a memorandum of understanding and framework agreement concluded between the Antwerp World Diamond Centre (AWDC) and ICBC, China’s biggest state-owned bank, and one of the largest financial institutions in the world. The agreement provides the possibility of additional sources of financing for the diamond trade though the provision of alternative investment opportunities for the banks more than 240 million private and corporate clients.
Among the companies that have set up funds is diamond miner and jewellery retailer Harry Winston Diamond Corp. It launched a first fund in May, and is reportedly mulling a follow-up with its partner Diamond Asset Advisors (DAA), whose chairman, Peter Laib, said the concern was encouraged by the fact that the supply of diamonds was not projected to grow in the years to come since no new mines have been discovered. And even if a new mine is found, the nature of the diamond business means it would take many years for diamonds to come on stream.
The fund will purchase diamonds, and provide direct exposure to the wholesale market price of polished diamonds. It is expected that $100 million will be raised this year, with the outstanding $150 million due during 2012, subject to market conditions. Conscious of the issue of the difficulty in being able to provide clear indications of diamond prices, DAA said the structure of the fund offers a solution. That is because it is highly liquid, since whenever Harry Winston sells a diamond, the fund has a trade.
The independently managed $250 million fund will see Harry Winston source polished diamonds for the fund to purchase. In the portfolio, 75 percent are diamonds of 0.50 to 5.99 carats, and 25 percent in fancy colors or larger stones, the company said. The diamonds will be consigned to Harry Winston which will act as custodian and use the diamonds in its products. When Harry Winston sells jewellery it will pay the fund the current wholesale replacement price. Ongoing replacement of the diamonds used creates a mark-to-market for the fund by providing a yardstick to determine the market value of the diamond fund.
The move also makes a new source of diamond inventory available to an expanding salon network without making additional demands on working capital, as well as supporting an expanding bridal business where clients prefer to review a wide range of diamonds at each salon. In addition, it reduces inventory financing costs and improves returns on capital.
Harry Winston would be interested in a second fund with DAA, said its Chief Operating Officer Ray Simpson. If there is strong demand from investors for the first fund, the second could be launched immediately after the first sometime next year. Meanwhile, DAA said interest in the fund was very large.
Michael Shaw, managing director at Bristow Shaw & Company, which is aiming to raise $25 million-$30 million for the Australian part of the investment, said the fund will be offered in a private placement to qualified investors, and aims for a return of 12 percent annually net to investors.
De Beers, over the past three years, has also reported strong interest from various investment firms in diamonds, although there have not been any public announcements of a fund formation. However, Diamond Trading Company CEO Varda Shine recently said the firm was seeing more demand "from a greater variety of sources" and "new types of demand, or a different consumption rationale evolving".
She said that interest in diamonds and gold as tangible assets, and a means of diversifying investments, had grown among investors who had seen traditional investment vehicles break down.
Martin Rapaport, whose Rap diamond price list is widely used in the industry, is working on a fund. The Rapaport Diamond Fund will be a proprietary diamond investment fund that enables the financial community to invest in diamonds. The fund will offer "extraordinary levels of transparency and efficiency enabling access to investment grade diamonds fair market values" according to the company.
Rapaport said in August that it would start with more than $10 million, before increasing in size to more than $100 million. He told Bloomberg News that the fund would begin operating in the first half of 2012, and initially would be open only to institutional investors. Called the Rapaport Diamond Fund, it will be secured by polished diamonds that his company will buy and hold.
“The financial markets are weird and people are looking for alternatives to holding the dollar,” Rapaport told Bloomberg. “In that kind of environment, diamond prices are going to do very well.” Rapaport said that global demand could outstrip supply by at least 75 million carats by 2025, as producers struggle to find commercial deposits of rough, while demand continues to increase in Asia.“Diamonds are going to track exponential growth of wealth in developing markets. Chinese demand for diamonds is simply fantastic, so is Indian.”
Another diamond investment fund has been created by businessman Clive Cowdery with Diamond Capital Ltd, with a reported capital raising of $20 million. The founder of a firm called Resolution Ltd. who made about $240 million buying and selling insurers, said his aim was to diversify risk.
However, investors are not simply showing their interest in buying into diamond investment funds. “Diamond companies look underpriced versus gold, and silver stocks on a price-to-net-present-value basis,” wrote Edward Sterck, diamond-producer equity analyst for BMO Nesbitt Burns in London, in a recent research report.
Gold and diamond prices have traditionally moved together, with diamonds generally attracting a higher price, however gold prices have been higher than those for diamonds since the 2008 financial crisis. That was because jewellery sales dropped in the wake of the recession, while gold was seen as a safe-haven investment. However, the theory that gold could only drive higher took a bash in September when the price of bullion plummeted quickly on profit taking. While gold supplies remain ample, the increasing scarcity of diamonds will push prices higher, Sterck believes.
“Rough diamond production peaked in 2006,” Sterck said. “Despite some returning production and a handful of new mines forecast to enter production … rough diamond supply is highly unlikely to ever return to its 2006 high water mark." He added that in the long term, the outlook was extremely positive.
20 June 2011
Record Polished Prices, Soar Ahead of HK Show
(June 20, 11, 10:22 Edahn Golan)
(IDEX Online News) – The IDEX Online Polished Diamond Price Index set a record Monday, crossing 142.25, the highest level the Index reached since its introduction in July 2004.
Diamond prices have been rising sharply in the first half of the fiscal year, especially so in the second quarter, as the graph below shows.
Polished diamond prices are rising as rough diamond prices continue to increase and consumer demand is unabaiting. The strong rally started in early March, ahead of the Hong Kong March show, which was later described by many participants as "fantastic."
Prices continued to rise until the Basel show, pausing on the first two days when traders felt that the show is not matching their expectations. That quickly changed when a day later rough diamond prices at the DTC Sight were hiked, sending polished prices up again.
Since March, prices continued their upwards movement, as traders are reassured again by good business at the recent Las Vegas trade fair.
Last week De Beers once again hiked prices of their rough, leading some traders to buy polished on a speculative basis, anticipating further growth of polished prices.
Next week the June Hong Kong trade fair will open and the conventional wisdom is that business will be good there too, as the Chinese and Indian markets are on a steady and continues growth path.
The industry views these trends as positive signs for a successful November-December holiday season, and therefore expects prices to keep rising for another few months.
2 June 2011
Polished Diamond Prices Rise Again in May
(June 2, 11, 15:00 Ken Gassman)
(IDEX Online News) - The IDEX Online Polished Diamond Index averaged 132.1 in May, setting a new record, as polished diamond prices continue to rise. The record surpassed the prior record level both last month and in the pre-recession period of the late summer of 2008.
The full analysis of the polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members here.
On a month-over-month basis polished diamond prices rose by 1.1% in may, based on average asking prices during both months. This was one of the larger price increases in the past two years. This gain is in line with the average of prior monthly gains in the past year or so.
Moreover, between May 1 and May 31, polished diamond prices rose by about 2.4%, one of the largest increases since the price recovery cycle began in March 2010.
Inflation typically begins to heat up in post-recession periods as demand strengthens and suppliers attempt to recoup losses incurred in the recession. In the diamond industry, inflation trends seem to be more pronounced than in many other industries. Polished diamond prices continued to set new records almost daily in May, though there was some indication in May that prices of certain diamonds – specifically three-carat and five-carat gemstones – may not be sustainable.
May’s polished diamond prices rose 13.4%, when compared to the same month a year ago. This price increase is well above earlier months’ year-over-year gains, and it is close to some of the year-over-year gains in mid-2008, at the height of the diamond price bubble.
Polished diamond price statistics for May are as follows:
Period % Change Polished Diamond Prices
May vs April 2011 +1.1%
May 2011 vs May 2010 +13.4%
Year-To-Date Through May 2011* +12.5%
*January 1, 2011 price compared to May 31, 2011 price.
Three key factors are pushing polished diamond prices higher:
• Rough diamond prices keep increasing – much faster than polished prices. These higher prices are being passed along the diamond pipeline to all participants.
• Consumer demand for jewelry, including diamond jewelry, has strengthened significantly over the past few months, especially from emerging markets such as India and China. As demand has intensified, price inflation has also increased.
• Demand for smaller stones – largely one carat and smaller – from both China and India are pushing up prices. On a month-to-month basis, prices for smaller diamond gemstones rose at a much greater rate than prices for larger diamonds. In contrast, average prices for three-carat and five-carat gemstones fell in May versus April levels.
The graph below summarizes polished diamond prices based on the IDEX Online Polished Diamond Price Index for the past twenty-four months.
Polished Diamond Price Outlook: Headed Higher
As long as rough diamond prices and consumer demand remains strong, IDEX Online Research believes that polished diamond prices will continue to increase, though perhaps at a more moderate pace than in the first five months of 2011.
Polished diamond prices historically rise rapidly early in a recovery cycle – which began near the end of the first quarter of 2010 – and then increase at a slower pace, in line with the long term annual increase of 3-4%.
The full analysis of the polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members here. Click here for more information on how to subscribe or become a member.
4 May 2011
Polished Prices Rise 1.9% in April, Index Breaks Record
6 February 2011
Polished Diamond Prices Rise 1.4% in a Single Month
5 January 2011
Polished Diamond Prices Post Solid Gain in December
7 February 2011
Alrosa reports sales of $313 million of rough and polished in January
Russian miner Alrosa sold more than $313 million of rough and polished diamonds in January and forecasts first quarter sales of $880 million, the company said in a statement.
The diamond mining monopoly said that there has been strong demand for rough diamonds since the start of this year.
The company’s debt level stands at $3.22 billion, but by the end of this year it expects that figure to be reduced to $2.78 billion.
The figures were discussed at a meeting of the company’s senior management held on February 7 chaired by President Fyodor Andreev.
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