Sběratel.com

Rapaport TradeWire - Friday, August 8, 2008
-------------------------------------------

News: Mumbai show attracts many new foreign diamond exhibitors from
East Asia, Antwerp, Israel and Pakistan. First day traffic better than
last year, but buyer sentiment more cautious and conservative
reflecting weaker Rupee, stock market and economy. ComScore reports
2Q08 online U.S. jewelry sales -10% as consumers stick to buying
necessities. Graff creates 26-piece, $50 mil. Lesotho Promise necklace
from 603ct rough stone. Blue Nile 2Q08 sales up +2% to $73.7 mil but
U.S. sales down -5% to $65.6 mil. and profits down -15% to $3.2 mil.
Signet 2Q sales $769 mil. (-2%,) same-store sales -3%. Bulgari 2Q08
sales $427.6 mil (+5%,) profits $48.9 mil (-9%,) and jewelry sales
$184 mil. (+5%) but dropped 21% in Americas. Sotheby’s 2Q08 sales $320
mil (-6%) and profits $95.3 mil (-11%). Gitanjali 1Q sales at $168.3
mil (+9%) and profits $7.9 mil. (+2%). ALROSA Aug. auction sells
10,300cts for $31 mil. South Africa March 2008 rough exports at
$218.62 mil. (+40%) and polished exports at $55 mil. (+5%). Zale
appoints Theo Killion president, reporting to CEO Neal Goldberg.
Rapaport Conference - Sept. 8, New York Waldorf Astoria Hotel, Reserve
Now for best rates, idc@diamonds.net -- http://www.diamonds.net/idc



ANNOUNCEMENTS
=============-


RAPAPORT INTERNATIONAL DIAMOND CONFERENCE
=========================================
Sept. 8, 2008, New York, Waldorf Astoria Hotel, 8:30-4:30
“2010, The Next Decade - The Future of the Diamond Industry”

Major Topics will include:
The impact of the new economy on the jewelry industry,
Commoditization, Branding and Profit Margins.

Reserve Now. Take advantage of Special Rapaport Deal.
-----------------------------------------------------
$599 for one night at the Waldorf includes full conference.
Additional night for only $399. Strict August 15, deadline.
Call Waldorf Astoria Hotel at 1-877-476-8792
and request Rapaport Rate.

Conference registration www.diamonds.net/idc
Email: idc@diamonds.net or call 1-702-893-9400 for information.

Rates: $100 for conference, $200 with lunch. Aug. 15 Deadline.
After Aug 15. $200 for conference alone.

http://www.diamonds.net/Conference/2008/Default.aspx
===========================================


RAPAPORT ROUGH DIAMOND TENDER
=============================-
Antwerp office: August 25-28, 2008
Viewing: by appointment only
Contact Shavit Gaistman
+32-323-23300 or email: tender@diamonds.net
===========================================================


RAPNET LAUNCHES CHINESE DIAMOND TRADING NETWORK
===============================================
www.Rapnet.cn is now open to all RapNet members.
Direct connections between foreign suppliers and Chinese buyers.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=22712

Contacts: Julius Zheng, julius.zheng@Diamonds.Net
+86-135-0177-8251

Or Rapaport Hong Kong, Ofira@Diamonds.Net
+852-9-222-7001
===========================================================



============
RETAIL QUOTE:
------------

"A number of large jewelers have filed bankruptcy protection this year
and many announced significant store closures and are liquidating
inventory at heavy discounts....We have seen clear signs of further
weakness in the economy in the past two months and we believe that the
severe tightening in credit markets has impacted the ability of
consumers to access credit for the purchase of high ticket items such
as jewelry."

---Diane Irvine, Blue Nile CEO


==========
WORLD NEWS:
----------

---Graff Unveils Lesotho Promise Necklace

Graff Diamonds transformed the 603-carat Lesotho Promise diamond into
a 26-piece diamond necklace. The Lesotho Promise, the 15th largest
rough diamond ever recovered, was mined at the Letseng mine in Lesotho
by Gem Diamonds, and sold to Graff and its partner polishing company
Safdico for $12.36 million in October. Graff unveiled the 2,223 carat
Lesotho Promise Necklace this past week as part of the company’s
display of magnificent jewels in Monte-Carlo.


---Report Calls for Curbing Abuses in Diamond Trade

A 2008 International Narcotics Control Strategy Report, prepared by
the U.S. Department of State found that India's status as an emerging
financial center and its informal cross-border money flows have
contributed to the country’s money laundering activities. The report
specifically blamed the diamond trade, illegal drugs and weapons, and
wildlife smuggling as key factors on the criminal side and suggested
reducing informal money transfer channels, focus upon anti-money
laundering policies and procedures, and ensuring sanctions compliance.


---Online Jewelry Sales -10% in 2Q08

Online jewelry sales in the United States fell 10 percent in the
second quarter of 2008, according to comScore. Total online retail
sales (excluding travel) rose 13 percent to $31 billion during the
three months ending June 30, 2008.


---U.S. June Jewelry Price Index +6%

The consumer price index for jewelry during June rose 6.4 percent from
one year ago, according to statistics provided by BLS (the Bureau of
Labor Statistics.) When combining both the watch and jewelry
categories, the year-to-year difference was an increase of 5.5 percent
in the United States. BLS compares its jewelry price index with 100
basis points in December 1986. In June, the jewelry index stood at
153.64 points, which was up 1.2 points from May.


---Rapaport News Broadcast

Blue Nile's results show what consumers are (and are not) buying in
terms of diamond jewelry. True North Gems is getting closer to ruby
production and discusses how these gemstones from Greenland will
present a selling opportunity at the retail counter. Graff Diamonds
discusses its new showpiece diamond necklace created from the 603ct
Lesotho Promise: See how good you are at guessing the price tag.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=22730



=============
DIAMOND STATS:
-------------

---South Africa's Rough Diamond Exports +40% in March

South Africa’s exports of rough diamonds rose 40 percent to $218.62
million (ZAR 1.62 billion) in March 2008, the most recent reporting
month. Rough imports grew 7 percent to $86.23 million during the
month, and net rough exports (exports less imports) increased 76
percent to $132.39 million. Polished diamond exports rose 5 percent to
$55.35 million and polished imports grew 13 percent to $9.53 million.
Net polished exports rose 3 percent to $45.82 million. South Africa’s
March net diamond account (net rough exports plus net polished
imports) jumped 49 percent to $178.21 million.


=======================
RETAIL & WHOLESALE NEWS:
-----------------------

---Signet 2Q Sales -2%, Same-store -3%

Signet Group sales (at constant exchange rates) fell 1.9 percent
during its second quarter, ending August 2, 2008, to $768.6 million.
Same-store sales fell 3 percent. Sales in the United States fell 1.6
percent to $575.4 million, and same-store sales dropped 5.8 percent.
In the U.K. sales fell 3 percent to $193.2 million and same-store
sales dropped 0.6 percent.


---Blue Nile 2Q08 Sales +2%, Net Income -15%

Blue Nile Inc. second quarter earnings ending June 29, 2008, fell 15
percent to $3.2 million. Worldwide sales rose 2.2 percent to $73.7
million. Cost of sales rose 2.5 percent to $58.6 million.
International sales rose 179 percent to $8.1 million. U.S. sales fell
5 percent to $65.6 million.


---Gitanjali 1Q Sales, Profits Rise on Strong Jewelry Segment

Gitanjali Gems first quarter of fiscal 2009 profits rose 2 percent to
INR 3.35 billion ($7.9 million,) and expenses rose 9.4 percent to INR
6.69 billion ($158.35 million.) Group sales rose 8.8 percent to INR
7.12 billion ($168.29 million) in the three months ending June 30,
2008, with jewelry sales up 16 percent to INR 2.29 billion ($54.22
million,) and diamond revenues rising 11 percent to INR 5.11 billion
($120.97 million.)


---Bulgari Profits -9% in 2Q08

Net profits at luxury retailer Bulgari fell 8.8 percent to EUR 31.4
million ($48.9 million) in the second quarter of 2008. Second quarter
revenues grew 4.8 percent to EUR 274.7 million ($427.6 million.)
Jewelry revenues grew 5.2 percent to EUR 118.3 million ($184.14
million,) while revenues from watches fell 11 percent to EUR 65.6
million ($102.11 million.) All Bulgari’s geographic locations except
the America’s saw revenues increase. Revenues in Europe grew 11.7
percent to EUR 108.9 million. Revenues in the America’s fell 21
percent to EUR 38.5 million, while in Asia rose 10 percent to EUR
109.5 million.


---Classic Diamonds Profits -17% in 1Q

Classic Diamonds net profits fell 17 percent to INR 5.56 crore ($1.3
million) in the first fiscal quarter ending June 30, 2008. Net sales
grew 12 percent to INR 167.70 crore ($39.67 million,) but ‘other
income’ dropped 59 percent to INR 1.49 crore ($353,160.) Expenses rose
11 percent to INR 151.91 crore ($35.93 million,) contributing to the
lower profits.


---Sotheby's 2Q08 Revenues -6%, Profits -11%

Sotheby's second quarter revenues fell 5.6 percent to $320.2 million
for the three months ending June 30, 2008. Net income fell 11 percent
to $95.3 million.


---Suashish Diamonds Profits -31% in 1Q

Suashish Diamonds net profits fell 31 percent to INR 182.32 million
($4.34 million) in the first quarter of fiscal 2008-09 despite a surge
in sales. Net sales grew 42 percent to INR 2.59 billion ($61.67
million) in the three months ending June 30, 2008.


---Shrenuj Profits +59% in Fiscal 1Q

Shrenuj & Company Limited profits (after tax and interest) rose 58.5
percent to INR 1.31 billion ($3.1 million) during the first quarter.
Group net sales rose 18.5 percent to INR 3.39 billion ($80.15
million.) Revenue from diamonds grew 20 percent to INR 2.39 billion
($56.5 million) and studded jewelry sales increased 15 percent to INR
999.71 million ($23.65 million.)


---Su-Raj Profits +28% in 1Q

Su-Raj reported net profits grew 28 percent to INR 151.3 million
($3.56 million) in the first quarter of fiscal 2009. Net sales rose 46
percent to INR 5.74 billion ($135.2 million) in the three months
ending June 30, 2008.


---Flawless Diamond Profits +72% in 1Q

Flawless Diamond profits grew 72 percent to INR 77.91 million ($1.84
million) in the three months ending June 30, 2008. Net sales rose 45
percent to INR 1.8 billion ($42.42 million.)


---Tanishq Jewelry Spurs Strong Growth at Titan Industries in 1Q

Profits at Titan Industries soared in first fiscal quarter 2009
boosted by strong growth in its Tanishq jewelry segment. Profits rose
79 percent to INR 32.22 crore ($7.6 million) for the three months
ending June 30, 2008. Net sales rose 23 percent to INR 810.31 crore
($191.68 million.)


---Whitehall Bidder, Landlords File Motions Against Sale

Gordon Brothers Retail Partners filed a motion against Whitehall
Jewelers Holdings after the jeweler accepted a stalking horse bid from
Great American Group some three hours before the stated deadline. In
court papers filed August 6, Gordon Brothers told the judge their bid
was the “highest and best offer in the sale,” but Gordon Brothers
contended that Great American Group submitted a "disguised equity
bid." The group called the move an "outrage" and demanded they be
awarded the bid on August 8.

In another twist, a number of heavy-hitting landlords filed motions
against Whitehall Jewelers claiming the jeweler failed to meet lease
obligations prior to a pending liquidation; had not communicated
intent of bidders; and was intent upon holding "going out business"
sales with tactics these leases forbid.


---Kairos Capital Acquires Ownership Stake in Henricks Jewelers

Henricks Jewelers filed for Chapter 11 bankruptcy protection right
before the Christmas retail season began in 2007 and at that time the
Florida-based company vowed to reorganize and pull itself back into
the black. This week, Kairos Capital Partners made an equity
investment in Henricks’ parent company Luxury Ventures LLC to acquire
an ownership stake in the jeweler and enable it to carry out the
reorganization and emerge from bankruptcy.


---Four 'Hot' Jewelers Make Top 100 NRF Growth List

In a difficult retail environment, four jewelry retailers placed among
the fastest growing retail outlets in the United States during 2007.
The industry however was largely inconspicuous on the list, which was
published by the National Retail Federation (NRF.) No jewelry
companies made the top 10, but Blue Nile's growth placed the online
diamond retailer at No.13. Tiffany came in at No.42, while Finlay
ranked at No.50 and Birks & Mayors, at No.93. Other retailers listed
who have jewelry in their offering included Amazon.com at No.4 with
38.5 percent growth, Saks at No.57 with 11.7 percent growth, Neiman
Marcus (No.75, up 8.9 percent,) and Costco (No.92, up 7.1 percent.)


---Consumer Spending Contracts; Savings, Income Drop

The U.S. Commerce Department found that consumer spending during June,
the most recent reporting month, contracted 0.2 percent when inflation
was factored into the picture. Personal incomes were mainly flat (up
0.1 percent,) but after-tax incomes fell 1.9 percent in June.


---DGSE Opens New Facilities in Woodland Hills

DGSE Companies Inc., which wholesales, retails and auctions diamonds,
fine jewelry, and precious metals, opened new facilities in Woodland
Hills, California. The new facility is at 20011 Ventura Blvd.,
Woodland Hills, about 45 miles west/northwest of Los Angeles. The
space will function as a rare coin, precious metals, and jewelry
gallery and act as the headquarters for auction activities at Superior
Galleries.


===========
WHO IS NEWS:
===========


---Zale Appoints Killion as Pres.

Zale Corporation named Theo Killion president, but he will retain his
current duties as executive vice president of human resources and
legal and corporate strategy in addition to assuming responsibility
for Zale's shared services department. Killion will continue to report
to Neal Goldberg, Zale CEO.


---DMIA Re-elects Friedman as President

The Diamond Manufacturers & Importers Association of America (DMIA)
held its bi-annual elections and Ronald J. Friedman was re-elected as
the Association’s president. Also re-elected were DMIA's vice
president-CFO Ronnie VanderLinden, and vice presidents Fred Knobloch,
Sheldon Kwiat, Jay Greenberg, Rick Cohen, and Matthew Schamroth. Hertz
Hasenfeld was elected DMIA secretary.


============
GENERAL NEWS:
============


---Wells Fargo Launches Credit Card Program for Jewelry Retailers

Wells Fargo Financial National Bank launched a revolving consumer
credit card program for the jewelry industry. The Wells Fargo Jewelry
Advantage (SM) credit card program offers retailers prompt automated
decisions and easy-to-use online processing and reporting.


---Six Armed Robbers Hit Jewelry Store in N. California

Possibly as many as six armed robbers hit a jewelry store in Hayward,
California, on Monday afternoon. Police say the robbers beat a
security guard and escaped from Highline Jewelers with "a high loss
amount" in merchandise.


===================
DIAMOND MINING NEWS:
-------------------

---ALROSA Aug. Auction Nets $31M

ALROSA generated $31 million at its 30th International Diamond Auction
held in Moscow on August 1, 2008. Of the goods offered, 104 lots were
produced by ALROSA and 63 lots by its subsidiary Alrosa-Nyurba. In
total 654 diamonds weighing more than 10,300 carats were auctioned,
with the largest of the diamonds weighing 41.27 carats.


---KimCor Nets $700K at Rough Diamond Sale

KimCor sold 10,023.55 carats of diamonds for $708,181.95, or an
average $70.65 per carat at a recent sale.


---South Africa Grants New Permits to Rockwell

Rockwell Diamonds Inc. was awarded eight new prospecting permits in
South Africa. These new permits reside in the Middle Orange River area
in the Northern Cape Province of South Africa, and include a number of
permits which are adjacent to the company's Wouterspan and Saxendrift
operations.


---Zimbabwe Arrests 9,600+ for Illegal Mining

Police in Zimbabwe have arrested more than 9,600 diamond panners and
dealers in the country since the year began. Authorities have
recovered about 1,912 diamonds and impounded 148 suspected stolen
vehicles used by the dealers to illegally buy the gemstones.
Authorities intensified efforts to curb diamond smuggling and mining
at Chiadzwa in the Marange area of Manicaland.


==========
ECON WATCH:
----------
For week ending August 7, 2008

Aug 7 Jul 31 Chng
$1 = Euro 0.653 0.641 0.012
$1 = Rupee 42.1 42.3 -0.2
$1 = Israel Shekel 3.56 3.51 0.05
$1 = Rand 7.50 7.33 0.16
$1 = Canadian Dollar 1.05 1.02 0.03

Precious Metals
Aug 7 Jul 31 Chng
Gold $873.70 $914.70 -$41.00
Platinum $1,566.00 $1,743.00 -$177.00


Stock Indexes
Aug 7 Jul 31 Chng Chng%
BSE 15,117.25 14,355.75 761.50 5.30%
Dow Jones Avg. 11,431.43 11,378.02 53.41 0.47%
FTSE 5,477.50 5,411.90 65.60 1.21%
Hang Seng 22,104.20 22,731.10 -626.90 -2.76%
S & P 500 1,266.06 1,267.38 -1.32 -0.10%
Yahoo! Jewelry Index 890.16 856.11 34.05 3.98%

USA
Abazias $1.50 $1.01 $0.49 48.51%
Birks & Mayors $2.30 $2.24 $0.06 2.68%
Blue Nile $41.13 $38.52 $2.61 6.78%
Charles & Colvard $0.77 $0.82 -$0.05 -6.10%
Collector's Universe $6.71 $7.42 -$0.71 -9.57%
DGSE Companies, Inc. $3.20 $3.35 -$0.15 -4.48%
Fuqi International $8.26 $8.76 -$0.50 -5.71%
JCPenney $33.53 $30.83 $2.70 8.76%
Kohl's $44.14 $41.91 $2.23 5.32%
Lazare Kaplan $8.45 $8.65 -$0.20 -2.31%
LJ International $1.91 $1.90 $0.01 0.26%
Macy's $18.92 $18.81 $0.11 0.58%
Man Sang $5.63 $5.75 -$0.12 -2.09%
Movado Group $21.29 $21.50 -$0.21 -0.98%
Nordstrom $27.98 $28.74 -$0.76 -2.64%
Saks $10.20 $10.19 $0.01 0.10%
Signet $10.80 $10.23 $0.57 5.57%
Sotheby's $25.30 $27.74 -$2.44 -8.80%
Tiffany $38.65 $37.79 $0.86 2.28%
Wal-Mart $56.96 $58.62 -$1.66 -2.83%
Zale $23.73 $22.12 $1.61 7.28%

EUROPE
Bulgari €6.50 €7.00 -€0.50 -7.14%
Citizen Holdings €4.39 €4.46 -€0.07 -1.57%
Esa €12.89 €12.76 €0.13 1.02%
Golay-Buchel CHF 2,350.00 CHF 2,350.00 €0.00 0.00%
LVMH €71.22 €70.95 €0.27 0.38%
Pinault P-R SA €75.74 €70.17 €5.57 7.94%
Richemont SA CHF 62.00 CHF 63.05 -€1.05 -1.67%
Sakha Diamonds €0.57 €0.60 -€0.03 -4.33%
Swatch Group CHF 249.00 CHF 245.00 €4.00 1.63%
Theo Fennell (pence) 37.00 37.00 €0.00 0.00%

HONG KONG
Hang HKD 2.03 HKD 2.05 -HKD 0.02 -0.98%
King Fook HKD 0.74 HKD 0.77 -HKD 0.03 -3.90%
Noble Jewelry HKD 1.16 HKD 1.20 -HKD 0.04 -3.33%
Tse Sui Luen HKD 0.83 HKD 0.84 -HKD 0.01 -1.19%

INDIA (rupee)
Classic Diamond 43.35 40.65 2.70 6.64%
Gitanjali Gems 271.60 257.20 14.40 5.60%
Rajesh Exports 53.40 50.65 2.75 5.43%
Reliance 2,271.40 2,206.20 65.20 2.96%
Su-Raj Diamonds 65.65 68.00 -2.35 -3.46%
Titan 1,271.50 1,127.05 144.45 12.82%
Zodiac JRD 25.70 25.00 0.70 2.80%
Shantivijay Jewels 124.95 121.55 3.40 2.80%
Shukra Jewellery 3.40 3.20 0.20 6.25%
Suashish Diamonds 370.00 377.55 -7.55 -2.00%

NEW ZEALAND
Michael Hill NZD 0.82 NZD 0.79 NZD 0.03 3.80%

SINGAPORE
Gems TV Holdings SGD 0.145 SGD 0.165 -SGD 0.020 -12.12%
Sarin Technologies SGD 0.350 SGD 0.350 SGD 0.000 0.00%


MINING STOCKS
(pence unless noted)
Aug 7 Jul 31 Chng Chng%
USA
Anglo American $26.57 $28.56 -$1.99 -6.97%

CANADA
Archangel CAD 0.71 CAD 0.75 -CAD 0.04 -5.33%
Harry Winston CAD 20.59 CAD 21.75 -CAD 1.16 -5.33%
Mountain Province CAD 4.40 CAD 4.38 CAD 0.02 0.46%
Peregrine Diamonds CAD 0.19 CAD 0.20 -CAD 0.01 -5.00%
Rockwell Diamonds CAD 0.21 CAD 0.26 -CAD 0.06 -21.15%
Shore Gold CAD 1.75 CAD 1.60 CAD 0.15 9.37%
Stornoway Diamond CAD 0.29 CAD 0.30 -CAD 0.02 -5.00%
True North Gems CAD 0.28 CAD 0.28 CAD 0.00 0.00%

UK (pence)
African Diamonds 55.4 59.1 -3.7 -6.31%
BHP Billiton 1,550.0 1,693.0 -143.0 -8.45%
Firestone Diamonds 85.0 72.0 13.0 18.06%
Gem Diamonds 990.5 1,030.0 -39.5 -3.83%
Mano River 8.0 7.8 0.3 3.74%
Mwana Africa 39.0 39.0 0.0 0.00%
Namakwa Diamonds 128.0 133.0 -5.0 -3.76%
Petra Diamonds 76.3 90.0 -13.8 -15.28%
Rio Tinto plc 4,811.00 5,340.00 -529.0 -9.91%


===================
INDIA MARKET REPORT:
-------------------

---Polished: There was some activity as many foreign buyers arrived
from Israel and Antwerp for the Mumbai show.

-1 point: Very good demand: +$225 whites.
Good demand: $150-$200 whites.
Fair demand: $150-$350 TTLC & $175-$250 white natts.

-2 point: Good demand: +$300 whites.
Fair demand: $250-$300 whites; $125-$150 TTLB & $125-$400
TTLC.

2-7 point: Very Good demand: +$300 whites.
Good demand: $250- $300 whites.
Fair demand: $100-$150 TTLB & $125-$400 TTLC.

8-18 point: Good demand: +$550 whites.
Fair demand: $150-$200 TTLB & $200-$450 TTLC.

20 points: Good demand: +$650 whites.
Fair demand: $200-$400 whites.

25 points: Good demand: +$700 whites.
Fair demand: $200-$450 whites.

33 points: Good Demand: $1400-$1600 whites.
Fair Demand: $150-$500 whites.

50 points: Good demand: +$2000 & $1000-$1,500 whites
Fair demand: $700-$800 & $300-$500 whites.

75 points: Good demand: +$3,000 whites.
Fair demand: $700-$900 whites.

1 carat+: Very good demand: +$5,000 whites.
Good demand: $1,500-$4,500 whites.

Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Good demand: +14 pts $600-$650 whites
Fair demand: $225-$275 & $300-$400 whites.

20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Fair demand: $1,200-$1,400 whites.
1 carat+: Good demand: +$1,500 whites.

Marquise: -6 point: Very good demand: $400-$550 whites.
Good demand: $250-$350 whites.
+7-18 point: Very good demand: $500-$650 & +14-point $850-
$900 whites.
Good demand: $225-$300 & +14-point $300-$350
whites.
20 point: Good demand: $675-$725 & $950-$1000 whites.
Fair demand: $325-$375 whites.
25 point: Good demand: $1,000-$1,100 whites.
Fair demand: $400-$450 whites.
33 point: Good demand: $1,200-$1,400 whites.
50 point: Good demand: $1,600-$1,800 whites.
75 point: Good demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Very Good demand: +$1,200 whites.

Tapers & Baguettes:
Good demand: $550-$800 +5mm whites. $225-$300
2mm-2.5mm whites; $300-$350, 2.5mm-3mm whites;
$350-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.


---Rough: Local rough is slow due to huge price difference.

1-5 point: Very good movement: $80-$150 makeables; $100-$200 crystals.
Good movement: $30-$75 makeables.
Good movement: $50-$100 OW TTLB & TTLC;
Fair movement: $5-$20 OW TTLB & TTLC.

6-20 point: Good demand: $150-225 crystals; $130-$180 makeables.
Fair demand: $40-$140 makeables; $60-$80 clivage;
$50-$100 makeables; Very good movement $80-$180;
Fair demand $60-$120 fancy shapes;
$70-$120 OW TTLC & TTLB rounds.

21-50 point: Good demand: $235-300 makeables; $170-$360 crystals.
Fair demand: $110-$220 rounds; $100-$150 crystals; $70-
$130 clivage; Very good movement $150-$230 and
Fair demand $75-$100 fancy shapes; Good demand $70-$150 &
Fair demand $20-$50 OW TTLC & TTLB.

0.51-1.00 carat: Good demand: $80-$125 & $150-$350 makeables;
$125-$250 & $300-$500 crystals.
Fair demand: $70-$100 clivage; Very good demand $225-
$325 and Fair demand $70-$125 fancy shapes;
Good demand $140-$180 & Fair demand $90-$125 OW TTLC
& TTLB.

1.01-2.00 carat: Fair demand: $225-$650 rounds; $225-$800 crystals;
$125-$170 clivage; $200-$400 all fancy shapes.
Good demand $170-$225 OW TTLC & TTLB.

2.01-3.00 carat: Good demand: $225-$1,500 makeables; $500-$1,000 OW
TTLC & TTLB & $350-$1,700 crystals.
Fair demand: $300-$400 clivage; $125-$400 flats &
$500-$1,000 fancy shapes.

5.00 carat+: Very good demand: $1,200+ makeables, crystals & all fancy
shapes till L color.

RAPAPORT INTERNATIONAL DIAMOND CONFERENCE

=========================================

Sept. 8, 2008, New York, Waldorf Astoria Hotel, 8:30 AM - 4:30 PM

Last Call for Waldorf Astoria $399 Per Night Hotel Rooms
Available for Sept 8 & 9. Strict August 15 Deadline.
Call Waldorf Astoria Hotel at 1-877-476-8792 and request Rapaport
Rate.

Zasielam preventívne pokiaľ náhodou niekomu pozvanému na konferenciu
sa stratila pozvánka.


Conference Attendance Rates: $100, $200 with lunch.
Conference registration www.diamonds.net/idc
Email: idc@diamonds.net or call 1-702-893-9400 for information.
http://www.diamonds.net/Conference/2008/Default.aspx

Major Conference Topics will include:
"2010, The Next Decade - The Future of the Diamond Industry"
The impact of the new economy on the jewelry industry,
Commoditization, Branding and Profit Margins.

Rapaport TradeWire - Friday, August 15, 2008
********************************************

News: India IIJS Show did well with strong showing of foreign
suppliers opening up new sourcing opportunities for local dealers and
retailers. Good demand for larger certs but strong price resistance
limited sales. High end Indian consumer demand steady with improving
sales for less expensive jewelry brands in spite of weak stock market
and double digit inflation. U.S. July jewelry prices surge +9.2% to
highest level since Mar. ’96 (CPI Jewelry Index). U.S. June polished
exports +70% to $1.9 bil. surpass polished imports $1.6 bil. (+21%)
for first time. Whitehall to liquidate $750 mil. of inventory from 450
stores. Israel July polished exports at $822 mil. (+28%) and rough
imports at $468.23 million (-5%). Dubai 1H08 rough exports $1.88 bil
(+44%). China 1H08 imports at $267 mil. (+37%). Macy’s 2Q08 sales
$5.718 bil. (-3%) with same store sales -2%; profits $73 mil. (-1.4%).
Finlay 2Q08 sales $191 mil. (+28.8%) with same-store sales -4.8%.
RAPAPORT CONFERENCE – MONDAY SEP. 8 – NEW YORK WALDORF ASTORIA HOTEL –
RESERVE NOW! idc@diamonds.net -- http://www.diamonds.net/idc


ANNOUNCEMENTS:
=============-

RAPAPORT INTERNATIONAL DIAMOND CONFERENCE
=========================================-
Sept. 8, 2008, New York, Waldorf Astoria Hotel, 8:30-4:30
“2010, The Next Decade - The Future of the Diamond Industry”

Major Topics will include:
The impact of the new economy on the jewelry industry,
Commoditization, Branding and Profit Margins.

Reserve Now. Take advantage of Special Rapaport Deal.
----------------------------------------------------- -
$599 for one night at the Waldorf includes full conference.
Additional night for only $399. Strict August 15, deadline.
Call Waldorf Astoria Hotel at 1-877-476-8792 and request Rapaport
Rate.

Conference registration www.diamonds.net/idc

Email: idc@diamonds.net or call 1-702-893-9400 for information.

Rates: $100 for conference, $200 with lunch. Aug. 15 Deadline.
After Aug 15. $200 for conference alone.

http://www.diamonds.net/Conference/2008/Default.aspx
===========================================-

RAPAPORT ROUGH DIAMOND TENDER
=============================-
Antwerp office: August 25-28, 2008
Viewing: by appointment only
Contact Shavit Gaistman
+32-323-23300 or email: tender@diamonds.net
===========================================================-


************
RETAIL QUOTE:
************

"We’re currently experiencing the most active period of [retail]
liquidation sales in 10 years, due to a combination of consumer cut
backs on peripheral spending, tightening of retail lenders and a
change in bankruptcy code. Whitehall Jewelers, which represents the
latest jewelry retailer effected by this combination, has long been a
landmark for consumers who appreciate high quality fine jewelry. The
liquidation sale will provide a final opportunity to take advantage of
great product at extraordinary value.”

---James L. Schaye, president and CEO of Hudson Capital Partners


**********
WORLD NEWS:
**********

---U.S. Jewelry Price Index +9% in July

The consumer price index for jewelry during July rose 9.2 percent to
156.6 points, according to statistics provided by BLS (the Bureau of
Labor Statistics.) This rate, based upon 100 points from 1986, was the
highest level since March 1996.


---Consumer Inflation Runs 6% in July

U.S. government data reported that consumer prices rose 0.8 percent in
July, a larger increase than expected. At the current pace annual
inflation rose to 5.6 percent in the United States. Core inflation
however only rose 0.3 percent and excludes food and energy increases.
This is the rate the Federal Reserve uses as a base for interest rate
decisions. The annual rate for this index is up about 2.5 percent.


---Dubai Gold Trade +48% to $13B in 1H08

Dubai’s gold trade (imports and exports) rose 48 percent to $13.07
billion in the first half of 2008, boosted mainly by higher prices for
the yellow metal. The Dubai Multi Commodities Centre (DMCC) imported a
total 265 tons of gold during the six months through June 30, 2008,
and exports reached 179 tons.


---Rapaport News Broadcast

June diamond statistics from the United States show that for the first
time more polished goods left the country than we took in. Our team
from India recaps the IIJS 2008 show activity. Gold has now followed
platinum and lost all gains made in 2008.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=22822



*************
DIAMOND STATS:
*************

---USA June Imports/Exports (YTD= year to date)

Jun.08 %Chng YTD 08 %Chng
($Mil) ‘07 ($Mil) ‘07

Polished Imports $1,593 21% $10,329 17%
Polished Exports $1,880 70% $7,799 48%
Net Polished ($287) N/A $2,530 -28%

Rough Imports $94 36% $449 6%
Rough Exports $21 -40% $211 -15%
Net Rough $73 115% $238 37%

Diamond Account ($214) N/A $2,768 -25%



---Israel July Imports/Exports (YTD= year to date)

July 08 %Chng YTD 08 %Chng
($Mil) ‘07 ($Mil) ‘07

Polished Exports $822 28% $4,614 9%
Polished Imports $426 12% $2,772 18%
Net Polished $396 51% $1,842 -2%

Rough Imports $468 -5% $3,240 12%
Rough Exports $313 17% $2,489 24%
Net Rough $155 -31% $752 -16%

Diamond Account $240 N/A $1,090 11%



---Botswana 1H08 Rough Diamond Exports +16%

First half rough exports out of Botswana rose 16 percent to BWP11.5
billion ($1.8 billion.) Bank of Botswana figures show exports of rough
diamonds fell from BWP6.4 billion ($976 million) in first quarter to
pula 5.107 billion ($779 million) in second quarter.


---China 1H08 Diamond Imports, Exports +43% to $652M

Diamond imports and exports on the Shanghai Diamond Exchange (SDE)
reached $1 billion in 2007, but for the first half of 2008 the amount
is already up 43 percent to $652 million. China's diamond imports for
domestic consumption rose 37 percent to $267 million.


---Dubai: Rough Diamond Trade +36% in 1H08

Rough diamond trading in Dubai increased 36 percent during the first
half of 2008 to $3.03 billion. The Dubai Diamond Exchange (DDE) noted
that rough diamond imports to the Emirate grew by 23 percent to $1.15
billion. Exports in the first half rose by 44 percent to $1.88
billion. Some 87 percent of Dubai’s rough diamond exports were to
countries in the European Union and India, while Dubai’s exports to
China increased by 950 percent.



***********************
RETAIL & WHOLESALE NEWS:
***********************

---Whitehall Jewelers Begins Liquidation Sale

National retail liquidation are managing a court-ordered bankruptcy
liquidation sale of all assets of Whitehall Jewelers Holdings Inc.,
which operates 373 specialty jewelry retail stores and 78 Friedman’s
stores they purchased in April. Inventory will be liquidated at below
market prices and the sale was granted to last through December 31.


---Macy's 2Q Rev. -3%, Profits -1%

Macy's Inc. second quarter revenue fell 3 percent to $5.718 billion,
and same-store sales fell 2 percent. Net income fell 1.4 percent to
$73 million. For Macy's fiscal year to date ending August 2, 2008,
revenue fell 2.9 percent to $11.465 billion and net income fell 87.3
percent to $14 million.


---FUQI 2Q Rev. +154%, Net Income +253%

FUQI International Inc. revenue rose 154 percent to $66.9 million in
second quarter ending June 30, 2008. Net income increased 253 percent
to $5.3 million, or 25-cents per diluted share. Net margin increased
to 7.9 percent from 5.7 percent.

FUQI also purchased two jewelry companies this week: Shanghai Tian Mei
Jewelry Co. Ltd. and Beijing Yinzhong Tian Mei Jewelry Co. Ltd.,
collectively known as Temix for $19.7 million.


---Birks & Mayors Narrows Loss in 1Q

Birks & Mayors reported its net loss narrowed by 6.9 percent to $1.9
million due to a rise in sales during the first quarter of fiscal
2009. Net sales increased 6.4 percent to $72.44 million for the three
months ending June 28, 2008. Comparable store sales fell 5 percent,
with comparable store sales in Canada rising 2 percent and in the
United States declining 11 percent.


---Damiani Profits -40% in 1Q

Damiani S.p.A. profits fell 40 percent to EUR 2.1 million ($3.15
million) for the quarter ending June 30, 2008. Revenues fell 22.3
percent to EUR 39.2 million ($58.82 million) impacted by weak
performance in Italy, which accounts for 67 percent of Damiani’s
market. Sales in the America’s fell 2.2 percent to EUR 2.23 million
($3.35 million,) but revenues from Japan grew 18.5 percent to EUR 2.22
million ($3.3 million.)


---Finlay 2Q08 Sales +29%, Same-store -5%

Finlay Enterprises Inc. second quarter sales, ending August 2, 2008,
rose 28.8 percent to $190.6 million. Same-store sales fell 4.8
percent. Specialty jewelry stores Carlyle, Congress, and Bailey Banks
& Biddle contributed sales of $74.8 million for the quarter, or
roughly three-times the amount from one year ago. Company profits will
be announced August 27.


---DGSE Profits +69%, Rev. +111%

DGSE Companies reported a 69 percent increase in second quarter
profits to $489,924 in the three months ending June 30, 2008. Revenues
grew 111 percent to $26.38 million. Similar growth was experienced for
the company's first half as net income rose 110 percent to $967,179
and revenues increased 161 percent to $59.1 million.


---Man Sang Holdings 2Q Rev. -11%, Profits -53%

Man Sang Holdings Inc. reported revenue in second quarter fell 11.2
percent to HKD89.4 million ($11.5 million.) Profits fell 52.8 percent
to HKD4.2 million ($537,800) during the period ending June 30, 2008.
Jewelry sales fell 18.7 percent to HKD81.9 million ($10.5 million.)
The drop was attributed to weak sales in the United States. Net sales
to the United States dropped 46 percent to HKD18.3 million ($2.3
million.) Net sales to Europe however rose 18 percent to HKD36.1
million ($4.6 million.)


---Flawless Diamond Announces $20M Retail Expansion

Flawless Diamond plans to invest up to $20 million in retail expansion
across the Gulf states, Europe, and the United States. The diamond and
jewelry manufacturer told shareholders that it needs between $17.6
million to $19.9 million to carry out its plans. Flawless Diamonds
profits grew 246 percent to INR 251.8 million ($5.87 million) in
fiscal 2008, as sales rose 86 percent to INR 5.6 billion ($130.9
million.)


---Richemont Buys Majority Stake in Geneva Watch Maker

Richemont acquired 60 percent of Geneva-based watch maker Roger Dubuis
SA for an undisclosed amount. Richemont made a private transaction
with Carlos Dias, one of Roger Dubuis’ founding shareholders to carry
out the deal. Under the agreement, Roger Dubuis will continue to
manufacture and distribute watches under the ‘Roger Dubuis’ name and
will operate as an autonomous ‘Maison’ within Richemont.


---Tiffany Appeals eBay Ruling

Tiffany & Co. appealed a federal court ruling in favor of Internet
auctioneer eBay Inc. The U.S. District Court ruled July 14, that eBay
is not responsible for policing trademark infringement on its site.
Tiffany contends in the appeal that eBay "should be compelled" to be
proactive in protecting customers and trademark holders. Tiffany
claims that 73 percent of a random sample of silver jewelry offered on
eBay was counterfeit.


---Charles & Colvard to Close Hong Kong Office

Moissanite creator Charles & Colvard plans to close its Hong Kong
operations by the end of September. The move comes as Charles &
Colvard has seen a further drop in sales this year, down 31 percent in
the first half, following consecutive quarterly declines in 2007.


************
GENERAL NEWS:
************

---Diamond City Declared India's Most Prosperous

Surat replaced Chandigarh as the most prosperous city in India. The
study showed that the average annual household income in the diamond
city, adjusted for cost of living, was INR 457,000 ($19,861) in 2008,
representing growth of 16 percent from 2004. Chandigarh, at No.2, had
an average income of INR 422,503 ($10,042,) followed by Mumbai with
INR 403,059 ($9,580,) Delhi with INR 337,678 ($8,026,) and Ahmedabad
completing the top five with and income of INR 328,267 ($7,802.)


---No. of Internet Users in China Nearly Tops U.S. Total Population

The number of citizens in China with Internet access reached 253
million in June, and now the nation ranks No.1 in the world for the
most netizens (Internet population.) The entire population of the
United States is about 300 million as point of reference. The China
Internet Network Information Center (CNNIC) recorded the number of
broadband users in China at 214 million, which also ranks No.1 in the
world. CNNIC indicated in another report that the amount of online
shopping in the first half of 2008 reaches 16.2 billion yuan ($2.36
billion.)


*******************
DIAMOND MINING NEWS:
*******************

---BRC DiamondCore Tender Nets $993K

BRC DiamondCore Ltd. sold 959.46 carats for $992,555 at the company's
fifth tender. One 40.41 carat white frosted dodecahedron from
Silverstreams sold for $10,118 per carat; and one 33.75 carat faint
brown dodecahedron from Paardeberg East sold for $4,317 per carat.
Some 282.91 carats mined from Silverstreams achieved an average price
of $2,615, and 676.55 carats from Paardeberg achieved $374 per carat.


---Dubai Rough Tender to Include Ellendale Diamonds

The Dubai Diamond Exchange (DDE) will offer diamonds from the
Ellendale mine in Australia for the first time at its August tender.
Some 60,000 carats of Ellendale diamonds will be put on offer in
addition to 35,000 carats of goods from South Africa. The tender will
run from Sunday August 24 through Wednesday August 27.


---Sacre-Coeur Minerals Raises $3M in Private Placement

Vancouver based Sacre-Coeur Minerals said Monday it closed a
non-brokered private placement raising CAD 3.63 million ($3.42
million) to finance its exploration activities in Guyana. The company
is active in the search for gold, metals and diamonds in South
America.


---True North Gems Private Placement Exceeds $1M

True North Gems Inc. completed an initial closing of a private
placement at 30-cents per unit (one common share and one-half of one
common share purchase warrant.) True North Gems issued 3,343,000 units
for gross proceeds of almost $1.003 million. True North Gems intends
to use the majority of the gross proceeds raised from the offering for
exploration expenditures and feasibility study work at the
Fiskenaesset Ruby Project, located on the west coast of Greenland.


---Court Clears Way to Reopen India's Panna Diamond Mines

India’s Supreme Court has granted permission to restart mining at the
country’s Panna diamond mines. The mines were closed two years ago,
pending the court ruling, due to the environmental impact of the
project to the area.


**********
ECON WATCH:
**********

For week ending August 14, 2008

Aug 14 Aug 7 Chng

$1 = Euro 0.675 0.653 0.022
$1 = Rupee 43.1 42.1 1.1
$1 = Israel Shekel 3.57 3.56 0.01
$1 = Rand 7.84 7.50 0.34
$1 = Canadian Dollar 1.06 1.05 0.01

Precious Metals
Aug 14 Aug 7 Chng

Gold $807.70 $873.70 -$66.00
Platinum $1,481.00 $1,566.00 -$85.00


Stock Indexes
Aug 14 Aug 7 Chng Chng%

BSE 14,724.18 15,117.25 -393.07 -2.60%
Dow Jones Avg. 11,615.93 11,431.43 184.50 1.61%
FTSE 5,497.40 5,477.50 19.90 0.36%
Hang Seng 21,392.71 22,104.20 -711.49 -3.22%
S & P 500 1,292.93 1,266.06 26.87 2.12%
Yahoo! Jewelry Index 955.06 890.16 64.90 7.29%


MINING STOCKS
(pence unless noted)
Aug 14 Aug 7 Chng Chng%

USA
Abazias $1.50 $1.50 $0.00 0.00%
Birks & Mayors $2.35 $2.30 $0.05 2.17%
Blue Nile $47.28 $41.13 $6.15 14.95%
Charles & Colvard $0.71 $0.77 -$0.06 -7.53%
Collector's Universe $7.05 $6.71 $0.34 5.07%
DGSE Companies, Inc. $3.25 $3.20 $0.05 1.56%
Fuqi International $10.59 $8.26 $2.33 28.21%
JCPenney $36.83 $33.53 $3.30 9.84%
Kohl's $48.27 $44.14 $4.13 9.36%
Lazare Kaplan $8.15 $8.45 -$0.30 -3.55%
LJ International $1.98 $1.91 $0.08 3.94%
Macy's $21.22 $18.92 $2.30 12.16%
Man Sang $5.20 $5.63 -$0.43 -7.64%
Movado Group $25.20 $21.29 $3.91 18.37%
Nordstrom $30.22 $27.98 $2.24 8.01%
Saks $11.04 $10.20 $0.84 8.24%
Signet $12.26 $10.80 $1.46 13.52%
Sotheby's $26.94 $25.30 $1.64 6.48%
Tiffany $40.79 $38.65 $2.14 5.54%
Wal-Mart $58.10 $56.96 $1.14 2.00%
Zale $23.41 $23.73 -$0.32 -1.35%

EUROPE
Bulgari €6.85 €6.50 €0.35 5.38%
Citizen Holdings €4.17 €4.39 -€0.22 -5.01%
Esa €12.88 €12.89 -€0.01 -0.08%
Golay-Buchel CHF 2,260.00 CHF 2,350.00 -€90.00 -3.83%
LVMH €70.97 €71.22 -€0.25 -0.35%
Pinault P-R SA €78.17 €75.74 €2.43 3.21%
Richemont SA CHF 62.75 CHF 62.00 €0.75 1.21%
Sakha Diamonds €0.30 €0.57 -€0.28 -48.43%
Swatch Group CHF 251.25 CHF 249.00 €2.25 0.90%
Theo Fennell (pence) 38.00 37.00 €1.00 2.70%

HONG KONG
Hang HKD 1.98 HKD 2.03 -HKD 0.05 -2.46%
King Fook HKD 0.69 HKD 0.74 -HKD 0.05 -6.76%
Noble Jewelry HKD 1.05 HKD 1.16 -HKD 0.11 -9.48%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 43.10 43.35 -0.25 -0.58%
Gitanjali Gems 257.10 271.60 -14.50 -5.34%
Rajesh Exports 51.10 53.40 -2.30 -4.31%
Reliance 2,275.30 2,271.40 3.90 0.17%
Su-Raj Diamonds 63.95 65.65 -1.70 -2.59%
Titan 1,225.10 1,271.50 -46.40 -3.65%
Zodiac JRD 25.50 25.70 -0.20 -0.78%
Shantivijay Jewels 140.00 124.95 15.05 12.04%
Shukra Jewellery 3.25 3.40 -0.15 -4.41%
Suashish Diamonds 420.00 370.00 50.00 13.51%

NEW ZEALAND
Michael Hill NZD 0.87 NZD 0.82 NZD 0.05 6.10%

SINGAPORE
Gems TV Holdings SGD 0.135 SGD 0.145 -SGD 0.010 -6.90%
Sarin Technologies SGD 0.360 SGD 0.350 SGD 0.010 2.86%

MINING STOCKS
(pence unless noted)

USA
Anglo American $27.25 $26.57 $0.68 2.56%

CANADA
Archangel CAD 0.71 CAD 0.71 CAD 0.00 0.00%
Harry Winston CAD 20.42 CAD 20.59 -CAD 0.17 -0.83%
Mountain Province CAD 4.25 CAD 4.40 -CAD 0.15 -3.41%
Peregrine Diamonds CAD 0.20 CAD 0.19 CAD 0.01 5.26%
Rockwell Diamonds CAD 0.19 CAD 0.21 -CAD 0.02 -7.32%
Shore Gold CAD 1.45 CAD 1.75 -CAD 0.30 -17.14%
Stornoway Diamond CAD 0.26 CAD 0.29 -CAD 0.03 -8.77%
True North Gems CAD 0.30 CAD 0.28 CAD 0.03 9.09%

UK (pence)
African Diamonds 52.0 55.4 -3.4 -6.09%
BHP Billiton 1,582.0 1,550.0 32.0 2.06%
Firestone Diamonds 75.0 85.0 -10.0 -11.76%
Gem Diamonds 968.0 990.5 -22.5 -2.27%
Mano River 7.7 8.0 -0.3 -4.23%
Mwana Africa 35.3 39.0 -3.8 -9.62%
Namakwa Diamonds 136.0 128.0 8.0 6.25%
Petra Diamonds 78.5 76.3 2.3 2.95%
Rio Tinto plc 4,800.00 4,811.00 -11.0 -0.23%



*******************
INDIA MARKET REPORT:
*******************

---Polished: Activity improved locally for sizes under 0.18 cts.
Traders growing more optimistic of a better season ahead after the
success of IIJS show.

-1 point: Very good demand: +$300 whites.
Good demand: $150-$300 whites.
Fair demand: $150-$350 TTLC & $175-$250 white natts.

-2 point: Very Good demand: +$300 whites.
Good demand: $250-$300 whites.
Fair demand: $125-$150 TTLB & $125-$400 TTLC.

2-7 point: Very Good demand: +$300 whites.
Good demand: $250- $300 whites.
Fair demand: $100-$150 TTLB & $125-$400 TTLC.

8-18 point: Good demand: +$600 whites.
Fair demand: $150-$200 TTLB & $200-$450 TTLC.

20 points: Good demand: +$650 whites.
Fair demand: $200-$400 whites.

25 points: Good demand: +$700 whites.
Fair demand: $200-$450 whites.

33 points: Good Demand: $1400-$1600 whites.
Fair Demand: $150-$500 whites.

50 points: Good demand: +$2000 & $1000-$1,500 whites
Fair demand: $700-$800 & $300-$500 whites.

75 points: Good demand: +$3,000 whites.
Fair demand: $700-$900 whites.

1 carat+: Good demand: +$5,000 whites.
Fair demand: $1,500-$4,500 whites.

Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Good demand: +14 pts $600-$650 whites
Fair demand: $225-$275 & $300-$400 whites.

20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Good demand: $1,200-$1,400 whites.
1 carat+: Good demand: +$1,500 whites.

Marquise: -6 point: Very good demand: $400-$550 whites.
Good demand: $250-$350 whites.
+7-18 point: Very good demand: $500-$650 & +14-point $850-
$900 whites.
Good demand: $225-$300 & +14-point $300-$350
whites.
20 point: Good demand: $675-$725 & $950-$1000 whites.
Fair demand: $325-$375 whites.
25 point: Good demand: $1,000-$1,100 whites.
Fair demand: $400-$450 whites.
33 point: Good demand: $1,200-$1,400 whites.
50 point: Good demand: $1,600-$1,800 whites.
75 point: Good demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Very Good demand: +$1,200 whites.

Tapers & Baguettes:
Good demand: $550-$800 +5mm whites. $225-$300
2mm-2.5mm whites; $300-$350, 2.5mm-3mm whites;
$350-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.


---Rough: Some activity reported in mixed lot $2-$50. Shortages in
fancies (marquise and pears, +VS1, +I) creating a stir in the market.

1-5 point: Very good movement: $80-$150 makeables; $100-$200 crystals.
Good movement: $30-$75 makeables.
Good movement: $50-$100 OW TTLB & TTLC;
Fair movement: $5-$20 OW TTLB & TTLC.

6-20 point: Good demand: $150-225 crystals; $130-$180 makeables.
Fair demand: $40-$140 makeables; $60-$80 clivage;
$50-$100 makeables; Very good movement $80-$180;
Fair demand $60-$120 fancy shapes;
$70-$120 OW TTLC & TTLB rounds.

21-50 point: Good demand: $235-300 makeables; $170-$360 crystals.
Fair demand: $110-$220 rounds; $100-$150 crystals; $70-
$130 clivage; Very good movement $150-$230 and
Fair demand $75-$100 fancy shapes; Good demand $70-$150 &
Fair demand $20-$50 OW TTLC & TTLB.

0.51-1.00 carat: Good demand: $80-$125 & $150-$350 makeables;
$125-$250 & $300-$500 crystals.
Fair demand: $70-$100 clivage; Very good demand $225-
$325 and Fair demand $70-$125 fancy shapes;
Good demand $140-$180 & Fair demand $90-$125 OW TTLC &
TTLB.

1.01-2.00 carat: Fair demand: $225-$650 rounds; $225-$800 crystals;
$125-$170 clivage; $200-$400 all fancy shapes.
Good demand $170-$225 OW TTLC & TTLB.

2.01-3.00 carat: Good demand: $225-$1,500 makeables; $500-$1,000 OW
TTLC & TTLB & $350-$1,700 crystals.
Fair demand: $300-$400 clivage; $125-$400 flats &
$500-$1,000 fancy shapes.

5.00 carat+: Very good demand: $1,200+ makeables, crystals & all fancy
shapes till L color.

Mixed Lot: Good demand: $2-$50.



*******

Rapaport TradeWire - Friday, August 22, 2008
--------------------------------------------

News: De Beers says they raised rough diamond prices an average 16% so
far this year with higher increases for 1ct+, SI+ rough. DTC Aug.
sight estimated at $725 mil. Global trading markets seasonally quiet
with high expectations for next month’s Hong Kong show. Indian market
demand for stars and melees improving. Gold price recovers from 10
month low with buying from Far East jewelers and investors. Charles &
Colvard faces Nasdaq delisting as stock price plummets 83% to $0.74.
BHP 2008 diamond earnings at $189 mil. (-4.1%). Saks 2Q08 sales at
$669 mil. (-3.6%) with same store sales -4% and net loss $31.7 mil.
Nordstrom 2Q08 sales at $2.29 bil (-4.3%) and profits at $143 mil
(-21%). Swatch 1H08 sales at $2.58 bil (+8.6%) and profits $381 mil.
(-9%). Michael Hill 2008 sales $268 mil. (+8%) and profits $17.9 mil.
(+20%). Macau 2Q08 retail sales $575 mil. (+40%) with strongest growth
seen in jewelry sales +19%. RAPAPORT CONFERENCE – MONDAY SEP. 8 – NEW
YORK WALDORF ASTORIA HOTEL – RESERVE NOW! idc@diamonds.net --
http://www.diamonds.net/idc


ANNOUNCEMENTS:

INTERNATIONAL JEWELLERY LONDON
=============================-

"State of the Diamond Industry" by Martin Rapaport

Sept. 1, 2008, Earls Court Conference Centre - Room 2
11:00-12:30 p.m.

Add to your Outlook Calendar:
http://www.jewellerylondon.com/page.cfm/action=Seminars/SeminarID=9


RAPAPORT INTERNATIONAL DIAMOND CONFERENCE
========================================-
Sept. 8, 2008, New York, Waldorf Astoria Hotel, 8:30-4:30
“2010, The Next Decade - The Future of the Diamond Industry”

Major Topics will include:
The impact of the new economy on the jewelry industry,
Commoditization, Branding and Profit Margins.

Reserve Now -- conference registration www.diamonds.net/idc

Email: idc@diamonds.net or call 1-702-893-9400 for information.

Rates: $150 for conference, $250 with lunch.

http://www.diamonds.net/Conference/2008/Default.aspx
===========================================-


RAPAPORT ROUGH DIAMOND TENDER
============================-
Antwerp office: August 25-28, 2008
Viewing: by appointment only
Contact Shavit Gaistman
+32-323-23300 or email: tender@diamonds.net
========================================-




RETAIL QUOTE:

“[De Beers price increases are] a matter of interpretation really and
my feeling is that DTC is behind the market in their increases and
will also be if they implement any decreases. They’re just not reading
the market correctly and still seem to have increases on their minds.
They still haven’t come to the conclusion that most boxes are trading
at cost.”

---Name withheld, DTC sightholder




WORLD NEWS:

---DTC Aug. Sight Estimate at $725M

Diamond Trading Company (DTC) sight number seven was estimated at $725
million as sightholders noted diminishing premiums on the goods they
receive from the De Beers sales unit. Sightholders reported slight
changes in the assortment of goods but no change in prices. DTC raised
prices by an average 5 percent in July and up to 15 percent on larger
goods. The company also said it increased prices by a cumulative 16
percent on average for the year including the August sight.

Some sightholders responded that use of the word “average” was
misleading and that larger, better quality goods were up 25 percent to
30 percent for the year.

To date, DTC sight estimates have grown 3.5 percent to $4.55 billion
compared with the first seven sights of 2007, according to Rapaport
records.


---Armenia’s Polished Diamond Production -21% in 1H

Armenia’s polished diamond production fell 20.6 percent to 52,316
carats in the first half of 2008. Armenia’s diamond polishing industry
has been on a steady decline in recent years as Russia rough supplies
dwindled. Reportedly, Russian diamond manufacturer Kristall of
Smolensk has agreed to send up to 7,000 carats of rough for polishing
in Armenia by year end. Armenia’s jewelry production declined 42.6
percent to 509.4 kilograms.


---Rapaport News Broadcast

Good demand for melee and stars in India...financials out of the U.S.
continue to record profit declines (Saks, Nordstrom,
Swatch)...Realeyez 3D out of Israel demonstrates their latest motion
technology to help retailers bring jewelry products to life online.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=22922




RETAIL & WHOLESALE NEWS:

---Saks 2Q Net Loss +29%, Sales -4%

Saks Incorporated moved further into the red in its second fiscal
quarter 2008 as most product categories softened during the period.
Net loss increased 29 percent to $31.7 million for the three months
ending August 2, 2008. Net sales fell 3.6 percent to $669.23 million
and comparable store sales were 4 percent lower.


---Kohl's 2Q Profits -12%, Sales +4%

Kohl's Corporation reported that profits fell 12.3 percent in second
quarter to $236 million and sales rose 3.8 percent to $3.726 billion.
Same-store sales fell 4.6 percent, for the quarter ending August 2,
2008.


---Nordstrom 2Q Profits -21%, Sales -4%

Nordstrom Inc. reported a 21 percent drop in second quarter profits to
$143 million. Sales fell 4.3 percent to $2.29 billion in the quarter
ending August 2, 2008. Same-store sales fell 6 percent, but the
retailer noted strong sales at its discount concept Nordstrom Rack
where same-store sales rose 6.3 percent.


---Michael Hill Profits +20% FY08

New Zealand-based jeweler Michael Hill reported that profits grew 20
percent to NZD 25.23 million ($17.9 million) for the fiscal year
ending June 30, 2008. Trading revenue grew 8 percent to NZD 376.66
million ($268.2 million,) boosted by the company’s operations in
Australia.


---Swatch Profits -9% in 1H08

The Swatch Group reported that net income fell 9 percent to CHF 418
million ($381 million) in the first half of 2008, due to a downturn in
its investment in China’s largest watch retailer, Xin Yu Hengdeli,
which lost 30 percent of its share value during the period. Swatch’s
net sales grew 8.6 percent to CHF 2.82 billion ($2.58 billion) boosted
by its watches, jewelry, and production segments, which grew 17.7
percent and 11.6 percent respectively in the six months ending June
30, 2008.


---Japan's July Department Store Sales -2%

Japan's department store sales in July fell 2.5 percent from a year
earlier on a same-store basis, a decline for the fifth consecutive
month. Total sales at 280 outlets run by 93 companies, which were
covered by the survey, came to JPY706.20 billion ($6.51 billion.)
Sales of artwork, jewelry and precious metals slumped 8.2 percent to
JPY32.63 billion ($301 million.)


---Macau 2Q Jewelry Sales +19%

Retail sales in Macau during second quarter rose 40 percent to $575
million. The total was pushed ahead by a 19 percent increase in sales
of jewelry (watches and clocks.) For the first half of 2008, retail
sales have risen 43 percent to $1.14 billion, according to government
figures.


---Signet Shareholders Approve Primary Listing Move

Signet Group will make the New York Stock Exchange its primary listing
after gaining majority support by shareholders. The company’s primary
listing is currently on the London Stock Exchange and the move to New
York is expected to take effect on September 11, 2008. Shareholders
also approved a move of the company's home-base to Bermuda.


---Nasdaq Grants 180 Days for Charles & Colvard

The Nasdaq informed Charles & Colvard Ltd., (NASDAQ: CTHR) that the
company's common stock is subject to potential delisting. For the past
30 days the moissanite creator's common stock has closed below the
minimum $1 per share requirement. Charles & Colvard was granted 180
calendar days, or until February 17, 2009, to regain compliance.
Shares have lost 83 percent of their value in the past 12 months.


---Pallinghurst Debuts on JSE

Investment fund Pallinghurst Resources Guernsey Ltd, which owns the
Faberge luxury brand, debuted on the Johannesburg Securities Exchange
(JSE) Thursday (August 20, 2008.) The fund is trading under the PGL.JO
ticker. Meanwhile its Gemfields Resources subsidiary opened a cutting
and polishing facility in Jaipur, India.


---Friedman's Seeks 60 Day Extension with Court

Friedman's Inc. and Crescent Jewelers requested a 60 day extension to
file a reorganization plan with the bankruptcy court. A hearing on the
matter is scheduled for September 5, with an objection deadline of
September 4.

Lawyers for the jewelers cited numerous complications in the Chapter
11 case, chief among them -- debtors have not had enough time to
resolve creditor issues and draft a reorganization plan. If the court
approves the request, Friedman's could hold off filing a plan until
November 24.



GENERAL NEWS:

---JCK Vegas '09 Cuts to 4 Days

JCK Las Vegas Show 2009 will be one day shorter and begin Saturday,
May 30, 2008, and run through Tuesday, June 2. Swiss Watch by JCK will
begin Friday, May 29 and run through June 2. This new day pattern was
designed in support of those who observe the Shavuot Holiday (May 29,
2009,) and to help attendees reduce travel expenses.


---GIA Career Search Engine Goes Global

Gemological Institute of America (GIA) has enhanced its Career Search
Engine so it now includes international career opportunities posted by
companies from various countries.


---Visitor Finds 4ct+ Diamond at Crater of Diamonds State Park

One visitor to Arkansas' Crater of Diamonds State Park found a
rectangular shaped 4.42 carat rough diamond, but it was even more
remarkable that he dug-up the gemstone only 30 minutes after his
search began. According to park officials though, the lucky guy,
Dennis Tyrrell of nearby Murfreesboro, searches for diamonds on a
regular basis at the park. This new find was Tyrrell's largest diamond
to date.



DIAMOND MINING NEWS:

---BHP Diamond Earnings -4% in FY08

BHP Billiton’s diamond earnings fell in fiscal 2008 on higher
exploration costs, while strong demand in China for its other
commodities drove total group profits to record levels. Diamond EBIT
(earnings before interest and taxation) fell 4.1 percent to $189
million. Diamond revenues, however, rose 8.5 percent to $969 million
as a result of higher diamond prices.


---BRC DiamondCore 1H Sales Top $4M

BRC DiamondCore Ltd. revenue from diamond sales during the first half
of 2008 came in at $4.369 million. BRC DiamondCore reported a net loss
of $4.631 million for the first half ending June 30, 2008. The most
significant item affecting the net was an unrealized foreign exchange
loss of $2.794 million.


---Mountain Province Diamonds Net Loss +37% in 1Q

Mountain Province Diamonds Inc.'s first fiscal quarter 2009 ended in a
net loss of $420,398, which was up from a net loss of $307,320 one
year ago. The increased loss was associated with ongoing costs
attributable to additional management and oversight of its investment
in the Gahcho Kué Project in Canada.


---Shear Minerals Raises $1M to Fund Churchill Project

Shear Minerals raised $1.14 million in a private placement of shares
to cover expenses at its Churchill Diamond Project in Nunavut, Canada.


---Lonrho Agrees to Sell Schmidtsdrift Diamond Mine for $13M

Lonrho Mining, formerly Nare Diamonds, has agreed to sell its 80
percent stake in the Schmidtsdrift mine to New African Mining (NAM)
for $13.35 million. The Schmidtsdrift mine comprises six contiguous
farms along the western bank of the Vaal River in South Africa, and
produced 16,805 carats of diamonds between April 2006 and May 31,
2008. These included 338 stones larger than 5 carats in size, amongst
which was a rare 235 carat stone.


---Bonaparte Diamond Tender Nets $871K for Savanna Diamonds

Bonaparte Diamond Mines NL sold its first parcel of diamonds from the
Savanna mine in South Africa for $870,599. The average per carat sale
price was $3,661. A total of 237 carats were sold during a sealed
tender auction held in Kimberley, South Africa, including two
exceptional high quality gem diamonds weighing 31 carats and 23
carats. The two large stones realized $425,000 ($13,449/ct) and
$331,111 ($14,091/ct) respectively.


---Vaaldiam to List Assets in Canada Under New Subsidiary

Vaaldiam Resources Ltd. plans to transfer its interests in Canada to a
newly formed, initially wholly-owned, subsidiary which will be called
Craton Minerals Ltd. Forty-nine percent of Craton's shares will be
initially transferred to Vaaldiam's shareholders with the remaining 51
percent to be transferred at a future date.


ECON WATCH:

For week ending August 21, 2008

Aug 14 Aug 7 Chng

$1 = Euro 0.671 0.675 -0.004
$1 = Rupee 43.4 43.1 0.3
$1 = Israel Shekel 3.49 3.57 -0.08
$1 = Rand 7.66 7.84 -0.18
$1 = Canadian Dollar 1.04 1.06 -0.02


Precious Metals
Aug 14 Aug 7 Chng

Gold $837.60 $807.70 $29.90
Platinum $1,456.00 $1,481.00 -$25.00


Stock Indexes
Aug 14 Aug 7 Chng Chng%

BSE 14,243.73 14,724.18 -480.45 -3.26%
Dow Jones Avg. 11,430.21 11,615.93 -185.72 -1.60%
FTSE 5,370.20 5,497.40 -127.20 -2.31%
Hang Seng 20,392.06 21,392.71 -1,000.65 -4.68%
S & P 500 1,277.72 1,292.93 -15.21 -1.18%
Yahoo! Jewelry Index 899.01 955.06 -56.05 -5.87%

USA
Abazias $1.50 $1.50 $0.00 0.00%
Birks & Mayors $2.35 $2.35 $0.00 0.00%
Blue Nile $43.53 $47.28 -$3.75 -7.93%
Charles & Colvard $0.73 $0.71 $0.02 2.53%
Collector's Universe $8.25 $7.05 $1.20 17.02%
DGSE Companies, Inc. $2.90 $3.25 -$0.35 -10.77%
Fuqi International $10.21 $10.59 -$0.38 -3.59%
JCPenney $36.77 $36.83 -$0.06 -0.16%
Kohl's $47.96 $48.27 -$0.31 -0.64%
Lazare Kaplan $8.25 $8.15 $0.10 1.23%
LJ International $1.70 $1.98 -$0.28 -14.14%
Macy's $19.44 $21.22 -$1.78 -8.39%
Man Sang $5.00 $5.20 -$0.20 -3.85%
Movado Group $24.08 $25.20 -$1.12 -4.44%
Nordstrom $29.06 $30.22 -$1.16 -3.84%
Saks $10.44 $11.04 -$0.60 -5.43%
Signet $11.34 $12.26 -$0.92 -7.50%
Sotheby's $25.93 $26.94 -$1.01 -3.75%
Tiffany $38.58 $40.79 -$2.21 -5.42%
Wal-Mart $58.50 $58.10 $0.40 0.69%
Zale $22.72 $23.41 -$0.69 -2.95%

EUROPE
Bulgari €6.60 €6.85 -€0.25 -3.65%
Citizen Holdings €4.22 €4.17 €0.05 1.20%
Esa €12.67 €12.88 -€0.21 -1.63%
Golay-Buchel CHF 2,250.00 CHF 2,260.00 -€10.00 -0.44%
LVMH €69.05 €70.97 -€1.92 -2.71%
Pinault P-R SA €74.00 €78.17 -€4.17 -5.33%
Richemont SA CHF 60.90 CHF 62.75 -€1.85 -2.95%
Sakha Diamonds €0.29 €0.30 -€0.01 -3.04%
Swatch Group CHF 248.60 CHF 251.25 -€2.65 -1.05%
Theo Fennell (pence) 46.50 38.00 €8.50 22.37%

HONG KONG
Hang HKD 2.00 HKD 1.98 HKD 0.02 1.01%
King Fook HKD 0.68 HKD 0.69 -HKD 0.01 -1.45%
Noble Jewelry HKD 1.00 HKD 1.05 -HKD 0.05 -4.76%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 41.10 43.10 -2.00 -4.64%
Gitanjali Gems 244.40 257.10 -12.70 -4.94%
Rajesh Exports 49.20 51.10 -1.90 -3.72%
Reliance 2,212.35 2,275.30 -62.95 -2.77%
Su-Raj Diamonds 61.90 63.95 -2.05 -3.21%
Titan 1,181.55 1,225.10 -43.55 -3.55%
Zodiac JRD 25.20 25.50 -0.30 -1.18%
Shantivijay Jewels 146.00 140.00 6.00 4.29%
Shukra Jewellery 3.10 3.25 -0.15 -4.62%
Suashish Diamonds 443.35 420.00 23.35 5.56%

NEW ZEALAND
Michael Hill NZD 0.91 NZD 0.87 NZD 0.04 4.60%

SINGAPORE
Gems TV Holdings SGD 0.125 SGD 0.135 -SGD 0.010 -7.41%
Sarin Technologies SGD 0.355 SGD 0.360 -SGD 0.005 -1.39%


MINING STOCKS
(pence unless noted)
Aug 14 Aug 7 Chng Chng%
USA
Anglo American $27.29 $27.25 $0.04 0.15%

CANADA
Archangel CAD 0.60 CAD 0.71 -CAD 0.11 -15.49%
Harry Winston CAD 19.18 CAD 20.42 -CAD 1.24 -6.07%
Mountain Province CAD 4.28 CAD 4.25 CAD 0.03 0.71%
Peregrine Diamonds CAD 0.21 CAD 0.20 CAD 0.01 5.00%
Rockwell Diamonds CAD 0.18 CAD 0.19 -CAD 0.01 -5.26%
Shore Gold CAD 1.35 CAD 1.45 -CAD 0.10 -6.90%
Stornoway Diamond CAD 0.30 CAD 0.26 CAD 0.04 15.38%
True North Gems CAD 0.30 CAD 0.30 CAD 0.00 0.00%

UK (pence)
African Diamonds 51.0 52.0 -1.0 -1.92%
BHP Billiton 1,670.0 1,582.0 88.0 5.56%
Firestone Diamonds 73.0 75.0 -2.0 -2.67%
Gem Diamonds 956.5 968.0 -11.5 -1.19%
Mano River 7.0 7.7 -0.7 -9.09%
Mwana Africa 27.5 35.3 -7.8 -21.99%
Namakwa Diamonds 149.0 136.0 13.0 9.56%
Petra Diamonds 73.8 78.5 -4.8 -6.05%
Rio Tinto plc 5,142.00 4,800.00 342.0 7.13%


INDIA MARKET REPORT:

---Polished: Improved demand for goods below 0.18 pts.(SI+), but
trading for larger stones remains slow.

-1 point: Very good demand: +$300 whites.
Good demand: $150-$300 whites.
Fair demand: $150-$350 TTLC & $175-$250 white natts.

-2 point: Very Good demand: +$300 whites.
Good demand: $250-$300 whites.
Fair demand: $125-$150 TTLB & $125-$400 TTLC.

2-7 point: Very Good demand: +$300 whites.
Good demand: $250- $300 whites.
Fair demand: $100-$150 TTLB & $125-$400 TTLC.

8-18 point: Good demand: +$600 whites.
Fair demand: $150-$200 TTLB & $200-$450 TTLC.

20 points: Good demand: +$650 whites.
Fair demand: $200-$400 whites.

25 points: Good demand: +$700 whites.
Fair demand: $200-$450 whites.

33 points: Good Demand: $1400-$1600 whites.
Fair Demand: $150-$500 whites.

50 points: Good demand: +$2000 & $1000-$1,500 whites
Fair demand: $700-$800 & $300-$500 whites.

75 points: Good demand: +$3,000 whites.
Fair demand: $700-$900 whites.

1 carat+: Good demand: +$5,000 whites.
Fair demand: $1,500-$4,500 whites.

Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Good demand: +14 pts $600-$650 whites
Fair demand: $225-$275 & $300-$400 whites.

20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Good demand: $1,200-$1,400 whites.
1 carat+: Good demand: +$1,500 whites.

Marquise: -6 point: Very good demand: $400-$550 whites.
Good demand: $250-$350 whites.
+7-18 point: Very good demand: $500-$650 & +14-point $850-
$900 whites.
Good demand: $225-$300 & +14-point $300-$350
whites.
20 point: Good demand: $675-$725 & $950-$1000 whites.
Fair demand: $325-$375 whites.
25 point: Good demand: $1,000-$1,100 whites.
Fair demand: $400-$450 whites.
33 point: Good demand: $1,200-$1,400 whites.
50 point: Good demand: $1,600-$1,800 whites.
75 point: Good demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Very Good demand: +$1,200 whites.

Tapers & Baguettes:
Good demand: $550-$800 +5mm whites. $225-$300
2mm-2.5mm whites; $300-$350, 2.5mm-3mm whites;
$350-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.

---ROUGH: Local rough markets are slow with only minor movement in
(-0.01) that yields Stars and Melees.

1-5 point: Very good movement: $80-$150 makeables; $100-$200 crystals.
Good movement: $30-$75 makeables.
Good movement: $50-$100 OW TTLB & TTLC;
Fair movement: $5-$20 OW TTLB & TTLC.

6-20 point: Good demand: $150-225 crystals; $130-$180 makeables.
Fair demand: $40-$140 makeables; $60-$80 clivage;
$50-$100 makeables; Very good movement $80-$180;
Fair demand $60-$120 fancy shapes;
$70-$120 OW TTLC & TTLB rounds.

21-50 point: Good demand: $235-300 makeables; $170-$360 crystals.
Fair demand: $110-$220 rounds; $100-$150 crystals; $70-
$130 clivage; Very good movement $150-$230 and
Fair demand $75-$100 fancy shapes; Good demand $70-$150 &
Fair demand $20-$50 OW TTLC & TTLB.

0.51-1.00 carat: Good demand: $80-$125 & $150-$350 makeables;
$125-$250 & $300-$500 crystals.
Fair demand: $70-$100 clivage; Very good demand $225-
$325 and Fair demand $70-$125 fancy shapes;
Good demand $140-$180 & Fair demand $90-$125 OW TTLC &
TTLB.

1.01-2.00 carat: Fair demand: $225-$650 rounds; $225-$800 crystals;
$125-$170 clivage; $200-$400 all fancy shapes.
Good demand $170-$225 OW TTLC & TTLB.

2.01-3.00 carat: Good demand: $225-$1,500 makeables; $500-$1,000 OW
TTLC & TTLB & $350-$1,700 crystals.
Fair demand: $300-$400 clivage; $125-$400 flats &
$500-$1,000 fancy shapes.

5.00 carat+: Very good demand: $1,200+ makeables, crystals & all fancy
shapes till L color.

Mixed Lot: Good demand: $2-$50.

Rapaport TradeWire - Friday, August 22, 2008
********************************************

News: Trading activity slow due to weak U.S. consumer demand and
summer vacations. Zale FY08 sales $2.14 bil. (-0.7%) profits $11 mil.
(-82%) and same-store sales -0.7%. Tiffany 2Q sales $732 mil. (+10%)
profits $81 mil. (+99%) but U.S. same-store sales -4%. Finlay 2Q sales
$191 mil. (+29%) and net loss $12.3 mil.. Rio Tinto 1H rough sales
$571 mil. (+28%) profits $108 mil. (+20%). India July polished exports
$1.32 bil. (+11%) and rough imports $1.14 bil. (+6%). Belgium July
polished exports $1.47 bil. (+33%) rough imports $1.14 bil. (+29%).
U.S. traders must e-mail rough diamond import/exports and inventories
for 2007 to USKimberleyProcess@state.gov by Sept. 1. RAPAPORT
CONFERENCE – MONDAY SEP. 8 – NEW YORK WALDORF ASTORIA HOTEL – RESERVE
NOW! idc@diamonds.net -- http://www.diamonds.net/idc


ANNOUNCEMENTS
============-

Martin Rapaport to Lecture At
INTERNATIONAL JEWELLERY LONDON
=============================-

"State of the Diamond Industry"
Sept. 1, 2008, 11:00-12:30 p.m.
Earls Court Conference Centre - Room 2
=----------------------------------------------=


RAPAPORT INTERNATIONAL DIAMOND CONFERENCE
========================================-
Sept. 8, 2008, New York, Waldorf Astoria Hotel, 8:30-4:30
“2010, The Next Decade - The Future of the Diamond Industry”

Reserve Now. conference registration - www.diamonds.net/idc
Email: idc@diamonds.net or call 1-702-893-9400 for information.
http://www.diamonds.net/Conference/2008/Default.aspx
Rates: $150 for conference, $250 with lunch.

CONFERENCE WEBCAST:
==========================================-
Rapaport International Diamond Conference 2008
To Be Broadcast Live on the Internet.
$100 pay-per-view with 30 day Internet Access.

Webcast Registration:
https://www.diamonds.net/Conference/2008/Register.aspx

Email: idc@diamonds.Net



RETAIL QUOTE:

"With a decline in customers walking into the store...this has been
accelerated by a depressed economy. Business is off a little, but it's
not too bad. Fortunately, people are still celebrating birthdays,
anniversaries and engagements but things are a little quieter. People
in the real-estate market are really feeling it, and many of our
customers are in the real-estate market."


---Jeff Hurwitz of Colonial Jewelry, Frederick, Maryland



WORLD NEWS:

---U.S. Deadline to Report Rough Imports, Exports, Inventory

Anyone dealing with rough must file their first rough diamond import
and export report with the federal government. The deadline for filing
is September 1, 2008, to report for the calendar year 2007. The next
deadline is April 1, 2009, to file for calendar year 2008 - and from
each April 1st from that point on.

E-mail (no specific format is required) the identities of the importer
and/or exporter (name, address, telephone number, fax, and e-mail
address) and the total amount of import/export activity for each of
the three harmonized tariff codes (7102.10, 7102.21 and 7102.31.)

E-mail the report to USKimberleyProcess@state.gov


---RBC Sees 'Deep Value' in Diamond Shares

RBC Capital Markets foresees strong investment opportunities in the
diamond sector as share prices have fallen by as much as 70 percent
among mining and exploration companies so far in 2008. RBC named Petra
Diamonds and Gem Diamonds as “best picks” given their “growing
production, sound management, strong balance sheets, and no need to
access capital markets in the near future.”

RBC cautioned that production growth in the next three to five years
was limited. As a result, rough diamond supply was likely to fall
short of demand.


---De Beers to Provide 4Q Funds to Select Sightholders

De Beers made a special allocation of funds to a select group of
Diamond Trading Company (DTC) sightholders for fourth quarter
marketing activities. The funds were made available to those who
fulfilled a set of objective marketing goals and were in good standing
with BPP (best practice principles.)


---Thailand: July Gems, Jewelry Exports +197%

Thailand's Ministry of Commerce reported the nation's exports of gems
and jewelry rose 197 percent, and shipments of pre-formed gold rose
1,000 percent. Exact dollar figures were not available. The surge in
the jewelry and metals sector was driven in part by much higher prices
than one year ago.


---Myanmar Plans October Gem Auction

Myanmar is planning an auction of precious gems in October, with sales
based upon a competitive bidding system. Jade, pearls and precious
gems will be among the lots on sale. The auction would be the first in
Myanmar since President George W. Bush signed legislation in July to
ban the import of rubies and jade from there into the United States.


---U.S. 2Q08 GDP +3%, Consumer Spending +2%

A surge in exports during second quarter (April-June) helped to boost
the United States' GDP 3.3 percent, which was higher than estimates of
1.9 percent. The weaker dollar during the quarter spurred buying
activity from other nations, but also made imports more expensive.
Overall exports grew 13.2 percent, imports fell at a 7.6 percent
during the quarter. Even with polished diamonds, for example, the
United States exported 18 percent more by value than it imported,
which was a first. Consumer spending during the quarter rose 1.7
percent and the government contended this increase was the result of
its stimulus checks.


---Rapaport News Broadcast

Retail results from Finlay find consumers continue to hold-back
spending on jewelry; Rio Tinto ends its quarter on a high due to
emerging market demand for diamonds; De Beers will help some
sightholders with fourth quarter marketing funds.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23018



DIAMOND STATS:

---Belgium July Imports/Exports (YTD= year to date)

July 08 %Chng YTD 08 %Chng
($Mil) ‘07 ($Mil) ‘07

Polished Exports $1,468 33% $7,994 25%
Polished Imports $940 19% $7,359 27%
Net Polished $528 66% $634 4%

Rough Imports $1,136 29% $7,002 19%
Rough Exports $1,206 4% $7,521 10%
Net Rough ($70) 75% ($519) 44%

Diamond Account $598 0% $1,153 -25%



---India July Imports/Exports (YTD= year to date)

July 08 %Chng YTD 08 %Chng
($Mil) ‘07 ($Mil) ‘07

Polished Exports $1,322 11% $9,190 29%
Polished Imports $795 65% $4,367 132%
Net Polished $527 -25% $4,824 -8%

Rough Imports $1,138 6% $6,845 16%
Rough Exports $65 40% $491 40%
Net Rough $1,073 5% $6,354 15%

Diamond Account ($546) -71% ($1,530) N/A



RETAIL & WHOLESALE NEWS:

---Zale 4Q Loss at $5M, FY Profits -82% to $10M

Zale Corporation revenues rose 7.8 percent to $456.222 million for its
fourth fiscal quarter ending July 31, 2008. The jeweler reported a net
loss of $4.884 million, compared with $1.537 million profit one year
ago. Same-store sales in fiscal fourth quarter rose 6 percent. Sales
for fiscal year 2008 fell 0.7 percent to $2.138 billion, and Zale
reported profits of $10.801 million -- a drop of 82 percent. Gross
margin for the year was 49 percent, down from 52.2 percent. Same-store
sales fell 0.7 percent. Zale has reduced merchandise inventories 24
percent to $779.565 million. The jeweler stated that clearance sales
during the year drove inventory reduction of $127 million.


---Tiffany 2Q Profits Double, U.S. same-store sales -4%

Tiffany & Co reported net earnings doubled to $80.77 million during
its second fiscal quater. Net sales grew 10 percent to $732.4 million
and comparable store sales rose 3 percent. For the fiscal half year
Tiffany’s net earnings grew 53 percent to $145.16 million, with net
sales up 11 percent to $1.4 billion and comparable store sales growth
of 5 percent. First half sales in the Asia Pacific region rose 19
percent to $436.3 million, and European sales grew 36 percent to
$131.1 million. Sales in the Americas region increased 4 percent to
$796.0 million with U.S. comparable store sales declining 4 percent.


---Finlay 2Q Net Loss +6% to $12M

Finlay Enterprises reported that its second fiscal quarter net loss
grew 6.4 percent to $12.3 million. Sales rose 29 percent to $190.6
million for the quarter. Specialty jewelry stores consisting of
Carlyle, Congress, and Bailey Banks & Biddle, contributed sales of
$74.9 million for the second quarter -- up from $27 million from one
year ago (without Bailey Banks & Biddle.) Comparable store sales fell
4.8 percent.


---ShopNBC 2Q Sales -26%, Net Loss +191%

Weak consumer spending hit ShopNBC hard during second quarter as sales
fell 26 percent to $142 million. The company’s net loss for the second
quarter rose 191 percent to $15.7 million. The number of units shipped
fell 23 percent to 870,000, and the average price point fell 4 percent
to $224. As a percentage of total sales, jewelry came in at 39 percent
(down from 40 percent.) The only two segments showing improvement
during the second quarter were health and beauty, and the watches,
coins, and collectibles categories.


---Sotheby's Schedules NY Important Jewels Sale for Sept. 25

Sotheby’s New York will hold its Important Jewels sale on September
25. The sale will include approximately 450 lots with a pre-sales
estimate of between $11 million and $15 million.


---Michael Hill Int'l Marks Entry into U.S. Market

Michael Hill International signed an agreement to acquire 17 stores
from Whitehall Jewelers. The deal is said to be worth about $5 million
(NZD7 million.) These stores are mostly in the greater Chicago area,
with two located in Missouri. The deal marks the first foray into the
United States for Michael Hill.



GENERAL NEWS:

---$20 Million in Gems, Jewelry to Help Pay Creditors

The U.S. Attorney's Office in Pittsburgh agreed to turn over an
estimated $20 million worth of precious gems and jewelry to a trustee
who will sell the items to pay creditors of bankrupt LeNature's Inc.
Included in the batch of diamonds, rubies, pearls, diamond-encrusted
watches, necklaces, bracelets, pendants and rings is a "fancy, vivid
green diamond" estimated to be worth $1.3 million to $3 million. Van
Cleef & Arpels is willing to take possession of the diamond or return
a $90,000 deposit it was paid to make part of a setting, but it won't
agree to both.


---Israel, Antwerp Preps for Strong Showing in Hong Kong

More than 50 diamond manufacturers and exporters from Israel will be
taking part in the Hong Kong Jewellery & Watch Fair from September
17–21, 2008. The Antwerp World Diamond Centre (AWDC) said 73
Antwerp-based diamond companies would participate in its pavilion.


---Industry Groups Submit Platinum Amendment Feedback to FTC

Jewelers Vigilance Committee (JVC,) Manufacturing Jewelers and
Suppliers of America (MJSA,) Jewelers of America (JA,) and American
Gem Society (AGS) filed a submission to the Federal Trade Commission
(FTC) that their position on terminology maintains the word “platinum”
should not be used to describe an alloy combining platinum with
non-platinum group metals.


---Pakistan Confirms Late October Houston Gem Show

The Pakistan Gems and Jewellery Development Company (PGJDC,) with
cooperation from the Pakistan Chamber of Commerce USA (PCC-USA,) will
hold a gem and jewelry exhibition in Houston during the final week of
October 2008. While no venue had been officially named to host the
event, more than 50 jewelers and gem merchants from Pakistan were
expected to attend, making it the largest exhibition by the nation's
jewelers in a single country.



DIAMOND MINING NEWS:

---Rio Tinto 1H08 Diamond Earnings +20%, Group Profits Hit Record

Rio Tinto diamond earnings for the first fiscal half of 2008 rose 20
percent to $108 million. Gross sales increased 28 percent to $571
million. The rise in profits came despite a 31 percent decline in
production from its three mines, to 7.853 million carats during the
period.


---Grizzly Diamonds Private Placement Nets $811K

Grizzly Diamonds Ltd. raised $810,600 in a private placement of an
aggregate of 271,000 flow-through units at a price of $1 per unit, and
599,556 non-flow-through units at a price of 90-cents per unit.
Proceeds raised will be used to fund the company's drilling programs
in Alberta and British Columbia.


---North Australian Diamonds Plans to Raise $6M

North Australian Diamonds Ltd is planning to raise $6 million to help
advance its Merlin diamond project in Australia’s Northern Territory.
The funds will be carried out in three stages: Including a 150 million
share placement at $0.005 a share; a placement of 300 million shares
at $0.0075 a share; and the placement of 300 million shares at $0.01 a
share.


---Canada to Map Arctic's Vast Resources

Canada's Prime Minister Stephen Harper announced Tuesday an ambitious
plan to discover and tap minerals beneath the Arctic. The government's
plan is to use "state of the art geological science and technology to
map the energy and mineral potential of the North."


---Rio Tinto Launches Annual Argyle Pink Diamond Tender

Rio Tinto launched its 24th annual Argyle Pink Diamond Tender in
Perth, Australia. It was the first of six locations to host the 65
pink diamonds before bidders are accepted in October. The remaining
five showings include in New York from September 2-5, London
(September 9- 11,) Hong Kong (September 15 -20,) Tokyo (September
24-26,) and finally in Sydney (October 1-2.)


---Namakwa Diamonds Launches Production at London Mine

Namakwa Diamonds Limited started production at its London 112HO
alluvial mine in the North West Province, South Africa. Namakwa bought
the London mine in July 2008 for $1.35 million saying the property had
an indicated and inferred resource of 114,390 carats of diamonds at an
average recovered grade of 0.7 carats per hundred tonnes (cpht.)


---DiamonEx Postpones First Lerala Sale to Sept.

DiamonEx has postponed the first sale of diamonds from its Lerala mine
in Botswana, after delays in commissioning the mine meant it did not
have a sufficiently large parcel to justify the pre-scheduled sale in
August.


---Mothae Tailings Project Yields 621cts of Diamonds

Motapa Diamonds recovered 620.92 carats of diamonds in phase-1 bulk
sampling at its Mothae tailings joint project in Lesotho, which it
operates with partner Lucara Diamond Corp. The sample consisted of
1,851 stones with 58 stones weighing more than 2 carats, and 13 stones
greater than 5 carats. The largest three diamonds were 10.24, 8.65 and
8.51 carats. Total diamond recovery from the phase-1 program to date
is 1,204.45 carats (3,160 diamonds.)



ECON WATCH:


For week ending August 28, 2008

Aug 21 Aug 14 Chng

$1 = Euro 0.680 0.671 0.009
$1 = Rupee 43.7 43.4 0.3
$1 = Israel Shekel 3.60 3.49 0.11
$1 = Rand 7.73 7.66 0.07
$1 = Canadian Dollar 1.05 1.04 0.01


Precious Metals

Aug 21 Aug 14 Chng

Gold $835.10 $837.60 -$2.50
Platinum $1,462.00 $1,456.00 $6.00



Stock Indexes

Aug 21 Aug 14 Chng Chng%

BSE 14,048.34 14,243.73 -195.39 -1.37%
Dow Jones Avg. 11,715.18 11,430.21 284.97 2.49%
FTSE 5,601.20 5,370.20 231.00 4.30%
Hang Seng 20,972.29 20,392.06 580.23 2.85%
S & P 500 1,300.68 1,277.72 22.96 1.80%
Yahoo! Jewelry Index 992.31 899.01 93.30 10.38%


MINING STOCKS

(pence unless noted)

Aug 21 Aug 14 Chng Chng%
USA
Abazias $1.50 $1.50 $0.00 0.00%
Birks & Mayors $2.35 $2.35 $0.00 0.00%
Blue Nile $42.74 $43.53 -$0.79 -1.81%
Charles & Colvard $0.63 $0.73 -$0.10 -13.70%
Collector's Universe $8.09 $8.25 -$0.16 -1.94%
DGSE Companies, Inc. $3.08 $2.90 $0.18 6.20%
Fuqi International $10.56 $10.21 $0.35 3.43%
JCPenney $39.04 $36.77 $2.27 6.17%
Kohl's $49.93 $47.96 $1.97 4.11%
Lazare Kaplan $8.25 $8.25 $0.00 0.00%
LJ International $1.65 $1.70 -$0.05 -2.94%
Macy's $20.65 $19.44 $1.21 6.22%
Man Sang $4.97 $5.00 -$0.03 -0.60%
Movado Group $23.60 $24.08 -$0.48 -1.99%
Nordstrom $30.67 $29.06 $1.61 5.54%
Saks $11.63 $10.44 $1.19 11.40%
Signet $11.47 $11.34 $0.13 1.15%
Sotheby's $27.46 $25.93 $1.53 5.90%
Tiffany $43.85 $38.58 $5.27 13.66%
Wal-Mart $59.88 $58.50 $1.38 2.36%
Zale $27.92 $22.72 $5.20 22.89%

EUROPE
Bulgari €6.55 €6.60 -€0.05 -0.76%
Citizen Holdings €4.51 €4.22 €0.29 6.87%
Esa €12.70 €12.67 €0.03 0.24%
Golay-Buchel CHF 2,340.00 CHF 2,250.00 CHF 90.00 4.00%
LVMH €72.96 €69.05 €3.91 5.66%
Pinault P-R SA €76.43 €74.00 €2.43 3.28%
Richemont SA CHF 63.70 CHF 60.90 CHF 2.80 4.60%
Sakha Diamonds €0.26 €0.29 -€0.03 -10.80%
Swatch Group CHF 259.50 CHF 248.60 CHF 10.90 4.38%
Theo Fennell (pence) 46.75 46.50 €0.25 0.54%

HONG KONG
Hang HKD 1.95 HKD 2.00 -HKD 0.05 -2.50%
King Fook HKD 0.66 HKD 0.68 -HKD 0.02 -2.94%
Noble Jewelry HKD 1.00 HKD 1.00 HKD 0.00 0.00%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 39.95 41.10 -1.15 -2.80%
Gitanjali Gems 234.30 244.40 -10.10 -4.13%
Rajesh Exports 46.20 49.20 -3.00 -6.10%
Reliance 2,073.70 2,212.35 -138.65 -6.27%
Su-Raj Diamonds 60.65 61.90 -1.25 -2.02%
Titan 1,239.20 1,181.55 57.65 4.88%
Zodiac JRD 24.00 25.20 -1.20 -4.76%
Shantivijay Jewels 160.00 146.00 14.00 9.59%
Shukra Jewellery 2.95 3.10 -0.15 -4.84%
Suashish Diamonds 440.60 443.35 -2.75 -0.62%

NEW ZEALAND
Michael Hill NZD 0.88 NZD 0.91 -NZD 0.03 -3.30%

SINGAPORE
Gems TV Holdings SGD 0.120 SGD 0.125 -SGD 0.005 -4.00%
Sarin Technologies SGD 0.310 SGD 0.355 -SGD 0.045 -12.68%



INDIA MARKET REPORT:

---Polished: After good activity for the past couple of weeks, trading
in the polished market has slowed considerably.

-1 point: Very good demand: +$300 whites.
Good demand: $150-$300 whites.
Fair demand: $150-$350 TTLC & $175-$250 white natts.

-2 point: Good demand: +$300 whites.
Fair demand: $125-$150 TTLB & $125-$400 TTLC.

2-7 point: Very Good demand: +$300 whites.
Good demand: $250- $300 whites.
Fair demand: $100-$150 TTLB & $125-$400 TTLC.

8-18 point: Good demand: +$600 whites.
Fair demand: $150-$200 TTLB & $200-$450 TTLC.

20 points: Good demand: +$650 whites.
Fair demand: $200-$400 whites.

25 points: Good demand: +$700 whites.
Fair demand: $200-$450 whites.

33 points: Good Demand: $1400-$1600 whites.
Fair Demand: $150-$500 whites.

50 points: Good demand: +$2000 & $1000-$1,500 whites
Fair demand: $700-$800 & $300-$500 whites.

75 points: Good demand: +$3,000 whites.
Fair demand: $700-$900 whites.

1 carat+: Good demand: +$5,000 whites.
Fair demand: $1,500-$4,500 whites.

Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Good demand: +14 pts $600-$650 whites
Fair demand: $225-$275 & $300-$400 whites.

20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Good demand: $1,200-$1,400 whites.
1 carat+: Good demand: +$1,500 whites.

Marquise: -6 point: Very good demand: $400-$550 whites.
Good demand: $250-$350 whites.
+7-18 point: Very good demand: $500-$650 & +14-point $850-
$900 whites.
Good demand: $225-$300 & +14-point $300-$350
whites.
20 point: Good demand: $675-$725 & $950-$1000 whites.
Fair demand: $325-$375 whites.
25 point: Good demand: $1,000-$1,100 whites.
Fair demand: $400-$450 whites.
33 point: Good demand: $1,200-$1,400 whites.
50 point: Good demand: $1,600-$1,800 whites.
75 point: Good demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Very Good demand: +$1,200 whites.

Tapers & Baguettes:
Good demand: $550-$800 +5mm whites. $225-$300
2mm-2.5mm whites; $300-$350, 2.5mm-3mm whites;
$350-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.


---ROUGH: Premium from the DTC sight boxes has been removed, still the
activities in the local rough market is slow. There is some movement
in Mixed lot and -0.01, star and melee which yields rough.

1-5 point: Very good movement: $80-$150 makeables; $100-$200 crystals.
Good movement: $30-$75 makeables.
Good movement: $50-$100 OW TTLB & TTLC;
Fair movement: $5-$20 OW TTLB & TTLC.

6-20 point: Good demand: $150-225 crystals; $130-$180 makeables.
Fair demand: $40-$140 makeables; $60-$80 clivage;
$50-$100 makeables; Very good movement $80-$180;
Fair demand $60-$120 fancy shapes;
$70-$120 OW TTLC & TTLB rounds.

21-50 point: Good demand: $235-300 makeables; $170-$360 crystals.
Fair demand: $110-$220 rounds; $100-$150 crystals; $70-
$130 clivage; Very good movement $150-$230 and
Fair demand $75-$100 fancy shapes; Good demand $70-$150 &
Fair demand $20-$50 OW TTLC & TTLB.

0.51-1.00 carat: Good demand: $80-$125 & $150-$350 makeables;
$125-$250 & $300-$500 crystals.
Fair demand: $70-$100 clivage; Very good demand $225-
$325 and Fair demand $70-$125 fancy shapes;
Good demand $140-$180 & Fair demand $90-$125 OW TTLC &
TTLB.

1.01-2.00 carat: Fair demand: $225-$650 rounds; $225-$800 crystals;
$125-$170 clivage; $200-$400 all fancy shapes.
Good demand $170-$225 OW TTLC & TTLB.

2.01-3.00 carat: Good demand: $225-$1,500 makeables; $500-$1,000 OW
TTLC & TTLB & $350-$1,700 crystals.
Fair demand: $300-$400 clivage; $125-$400 flats &
$500-$1,000 fancy shapes.

5.00 carat+: Very good demand: $1,200+ makeables, crystals & all fancy
shapes till L color.

Mixed Lot: Good demand: $2-$50.

Rapaport TradeWire - Friday, September 5, 2008
**********************************
News: Diamond industry focusing on Far East as Hong Kong and Shenzhen
show preparations improve trading activity. U.S. retail demand very
weak with consumers seeking deep discounts. Large expensive rough
strong and in short supply but edge has come off commercial rough with
buyers more picky and prices settling down. Israel Aug. rough imports
$373 mil. (-6%) and polished exports $207 mil. (-55%). Japan Aug.
polished diamond imports $73.96 (+1%). Hong Kong July retail sales
$24.2 bil. (+14%), but jewelry sales flat. Dubai’s Damas 1H08 sales
$653.4 mil. (+34%) and profits $44.9 mil. (+137%) on strong Arab Gulf
region sales. Whitehall liquidators accept Michael Hill Int'l $5 mil.
bid for 17 stores. RAP WEBCAST: Sept. 8, Rapaport International
Diamond Conference & Web Broadcast. Live/30days, $100 Register:
idc@diamonds.net.



ANNOUNCEMENTS:

RAPAPORT INTERNATIONAL DIAMOND CONFERENCE
========================================-
Sept. 8, 2008, New York, Waldorf Astoria Hotel, 8:30-4:30
"2010, The Next Decade - The Future of the Diamond Industry"

Major Topics will include:
The impact of the new economy on the jewelry industry,
Commoditization, Branding and Profit Margins.

Webcast is available for $100, playback for 30 days.
Email: idc@diamonds.net or call 1-702-893-9400 for information.

http://www.diamonds.net/Conference/2008/Default.aspx


===========================================-


RETAIL QUOTE:

"There's a fine line between aggressive retail promotions and panic,
and we are seeing a little bit of both right now."

---Dan Hess, founder and CEO of research firm Merchant Forecast


WORLD NEWS:

---Aug. Jewelry Sales Mixed at U.S. Retailers

Retail sales in the United States remained sluggish during August, as
the jewelry segment continued to show mixed performance. J.C. Penney
Inc. called fine jewelry the softest category. August sales fell 3.2
percent to $1.51 billion, as same store sales dropped 4.9 percent.
Kohl’s Corporation reported an increase in sales of 2.6 percent to
$1.26 billion although same-store sales fell 5.8 percent. Neiman
Marcus revenues rose 0.7 percent in August to $285 million, while
comparable revenues fell 0.5 percent, as jewelry and women’s fine
apparel performed the strongest. Saks Incorporated sales fell 6.1
percent to $200.5 million and comparable store sales decreased 5.9
percent. Fashion jewelry at Saks performed well. BJ's Wholesale Club
Inc. called jewelry one of its weakest performers, but overall sales
increased 17 percent to $774.4 million while comparable store sales
rose 15.4 percent. Macy’s no longer publishes monthly sales figures.


---Hong Kong July Retail Sales +14%, Jewelry Flat

Hong Kong's retail sales in July increased 13.8 percent from one year
ago, but jewelry sales remained flat. Total retail sales grew to
approximately $24.2 billion. When accounting for the effect of
inflation, the figure shows a humbler 6.6 percent growth for the month
in terms of volume of sales. Jewelry was among the weaker performers
by volume, as were watches and clocks. For the first seven months of
the year, Hong Kong's total retail sales increased by 15.6 percent in
value and 8.9 percent in volume compared with one year ago.


---Namibia: Rough Supplies Dwindle After 100yrs of Mining

Namibia's once rich diamond deposits are dwindling after a century of
exploitation, forcing miners to look for stones offshore while the
country's fledgling cutting and polishing sector could shrink as fewer
and smaller stones are found. Namibia's diamond industry is the sixth
largest in the world and is the country's economic backbone, dominated
by international diamond giant De Beers. The company mined 2.17
million carats in 2007 in the country -- mainly average stones size of
0.44 carats. It achieved a turnover of NAD585 million.


---U.S. Aug. Manufacturing Report Reflects Weakness in Jewelry
Category

Economic activity across the manufacturing sector, including jewelry,
remained stagnant in August, according to the Institute for Supply
Management (ISM.) In the most recent Manufacturing ISM Report On
Business, the PMI indicated a slight decline in manufacturing during
August, which continued the year-long trend toward negligible growth
or a contraction each month. Manufacturing contracted in August as the
PMI registered 49.9 percent, 0.1 percentage point lower than the 50
percent reported in July. A reading above 50 percent indicates that
the manufacturing economy is generally expanding; below 50 percent
indicates that it is generally contracting.


---China Likely to Retain Position as No. 1 Gold Producer

China is set to retain its newfound position as the world’s largest
gold producer, as much of its reserves remain unexplored, according to
the China Gold Report 2008ö published by ResearchAndMarkets. China
overtook South Africa to become the largest producer of the yellow
metal in 2007. It is expected to increase output a further 7 percent
to 300 metric tons this year, which would see it keep its number one
position in 2008 as well according to the report. Demand from mainland
China for gold jewelry reached 302 tons in 2007, helping China surpass
the United States as the second largest market for gold behind India.


---Rapaport News Broadcast

Highlights from the International Jewellery Show London find a
mixed-bag of activity, and Bhushan Vora, president of the Diamond
Manufacturers Association of Canada, discusses the plans for diamond
bourse by 2009.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23139



DIAMOND STATS:

---Japan's Polished Diamond Imports +1% in July

Japan’s polished diamond imports rose 0.9 percent to $73.96 million in
July. Diamond imports from India fell 14.7 percent to $25.56 million.
Imports from Belgium rose 8.8 percent to $22.9 million, and from
Israel imports grew 41 percent to $11.9 million. For the first seven
months of the year, Japan’s polished imports decreased 8.1 percent to
$490.28 million.


---Israel Aug Imports/Exports (YTD= year to date)

Aug 08 %Chng YTD 08 %Chng
($Mil) 07 ($Mil) 07

Polished Exports $207 -55% $4,822 3%
Polished Imports $312 0% $3,084 16%
Net Polished $(165) N/A $1,738 -14%

Rough Imports $373 -6% $3,613 10%
Rough Exports $277 10% $2,766 22%
Net Rough $96 -34% $847 -19%

Diamond Account $(261) N/A $891 -10%



RETAIL & WHOLESALE NEWS:

---Weak U.S. Retail Impacts Signet 1H Sales, Profits

Signet Group plc reported that same-store sales fell 5.2 percent in
the United States, but rose 2.3 percent in the United Kingdom for its
first fiscal half ending August 2, 2008. Group sales fell 0.6 percent
to $1.591 billion. Net income fell 39 percent to $45.4 million. The
jewelry retailer stated that results from price increases remained
encouraging as the group expected to maintain gross merchandise margin
rate at 7.9 percent (10.4 percent one year ago.) Bridal, which
accounts for 45 percent of sales, performed better than average.


---Damas Profits +137% on Strong Sales in the Gulf

Dubai-based jewelry and watch retailer Damas International Limited
reported a surge in profits during its first half of fiscal 2008 as
strong market conditions in the Gulf spurred growth. Net profits grew
137 percent to AED164.8 million ($44.9 million) for the six months
ending June 30, 2008. Group revenues rose 33.7 percent to AED 2.4
billion ($653.4 million.) Damas opened 42 new stores, including 11 in
the UAE, 14 elsewhere in the Gulf and 17 outside the Gulf. The company
said it plans to open more than 80 shops by the end of 2008 to bring
the total to 569 Damas stores around the world.


---Gitanjali to Operate Jewelry Showrooms With MMTC

Gitanjali Gems has agreed to form a joint venture with trading company
MMTC Ltd to operate jewelry showrooms in India. The two companies
signed a memorandum of understanding with a view to form a joint
venture through equal investments. MMTC is the largest single exporter
of minerals from India, and is one of the country’s premier bullion
traders, handling more than 100 metric tons of gold and 500 metric
tons of silver annually.


---Kwiat Opens Retail Store on Madison Ave.

Kwiat celebrated the grand opening of its diamond boutique at 725
Madison Avenue, New York City. The opening was planned to coincide
with celebrating the family-run business' centennial year. The
1,000sq.ft. store showcases a full range of offerings in a comfortable
setting and includes a private viewing room upstairs. Check Rapaport's
broadcast on September 10, 2008, for more coverage of the event.


---Sotheby's Oct. Hong Kong Jewels & Jadeite Sale Value at $64M

Sotheby’s Hong Kong will conduct its Magnificent Jewels and Jadeite
2008 Autumn Sale at the Hong Kong Convention and Exhibition Centre on
October 7, 2008. Some 320 lots will be offered with an estimated total
value of HKD500 million ($64 million.) The highlight of the sale is a
fancy vivid yellow diamond necklace with an estimated value of $7.4
million to $9.5 million, featuring a 102.56-carat fancy vivid yellow
diamond (pictured.) It has a flower pendant that can be detached from
the necklace and worn as a brooch.


---Gemfields Completes Exclusive License Agreement with Fabergé

Gemfields Resources plc has gained the exclusive license to use the
Fabergé brand name in respect to colored gemstones, excluding
diamonds. The gemstone producer said Monday it completed the
arrangements with Fabergé parent Pallinghurst Resources, and that it
plans to use the Fabergé name for high-end, conflict-free and
ethically mined gemstones of guaranteed provenance Fabergé gemstones
will be individually numbered and certificated to ensure traceability.


---Nagel Sues Graff for Unpaid Commission

W. Nagel International Diamond Brokers is suing Laurence Graff for
non-payment of commission owed. The High Court order claimed that in
1999 Graff agreed that Nagel would always be paid 1 percent commission
on its purchases from De Beers outside South Africa. It claims that by
2004 the agreement had been breached. François Graff, managing
director of Graff Diamonds International, told Rapaport News the suit
was completely unfounded and would be "aggressively defended."


---Movado Chairman Gedalio Grinberg to Retire

Movado Group chairman Gedalio Grinberg will retire at the end of
January 2009. Company president and chief executive Efraim Grinberg
will take over as chairman of the board in the new fiscal year.
Gedalio Grinberg, 76, will continue to serve on the board with the
title of founder and chairman emeritus.


GENERAL NEWS:

---Loose Stones, Diamond Jewelry to be Auctioned in N.J. Sept. 17

VSE Corporation and Rick Levin & Associates Inc. will conduct an
auction of seized and forfeited diamonds and diamond jewelry in New
Jersey on behalf of the U.S. Department of the Treasury. The auction
will take place at 9 a.m. on Wednesday, September 17, 2008, at the VSE
Warehouse, in Dayton, New Jersey. Registration begins at 8 a.m. day of
sale.

View the list of items:
http://www.treas.gov/auctions/treasury/gp/dayton_jewelry.shtml


---Gubelin Lab Off-premise Testing at Hong Kong Show Runs Sept.13-20

The Gubelin Gem Lab will carryout off-premise testing services at the
Hong Kong Show. The services begin September 13, 2008, and close
before the show ends on September 20. Gubelin Gem Lab will service
clients out of the Grand Hyatt near the Hong Kong Convention and
Exhibition Centre. The lab asks clients to contact them in advance
(Tel. +4141 429 1717) and be prepared to estimate the number of stones
that require testing.


---HRD Antwerp Launches Lab Link Service in Dubai

HRD Antwerp NV launched its Lab Link service in Dubai as part of its
global expansion. The move follows the introduction of Lab Link into
the Israeli, Hong Kong, and Mumbai markets during the past year. Lab
Link will allow members of the Dubai diamond sector direct access to
the HRD Antwerp - Diamond Lab.


---Kimberley Process Plenary Meeting Scheduled for Nov.

The Kimberley Process Certification Scheme (KP) has scheduled its
annual plenary meeting for November 3-6, 2008. The meeting will take
place in New Delhi, India, which holds the calendar year 2008 KP
chairmanship.



DIAMOND MINING NEWS:

---BRC DiamondCore Tender Exceeds $1M

BRC DiamondCore Ltd. generated $1.36 million in sales at the sixth
tender of diamonds from its projects in South Africa’s Northern Cape
Province. The company sold 1,351.13 carats from its Silverstreams
alluvial, De Kalk alluvial and Paardeberg East kimberlite trial mining
projects, for an average $1,010.81 per carat at the tender. The
tender, while not the company's largest of the year, exceeded the
previous two held by BRC. During the six tenders held so far this
year, BRC has generated approximately $8.96 million in sales, from
about 12,004 carats, with an average value of $746 a carat.


---Ellendale Mine Boosts 1H Diamonds Production

Gem Diamonds reported that diamond recovery across its operating mines
rose more than five-fold in the first half of 2008 as its Australia
operation at Ellendale came on stream. The company mined 283,840
carats of diamonds from January through June 2008, compared with
46,305 carats recovered one year ago. Gem Diamonds mined 233,082
carats from Ellendale, representing a 5 percent increase in
production. Gem Diamonds sold 287,693 carats of Ellendale diamonds for
$59.55 million, or $207 per carat.


---Vaaldiam Expects Duas Barras Revenues to Exceed $6M in 2008

Vaaldiam Resources expects revenues from its Duas Barras mine in
Brazil to exceed $6.5 million in 2008 as it ramps up diamond and gold
production at the site. The company launched production at Duas Barras
in September 2007 and produced 33,385 carats of diamonds valued at an
average $165 per carat in the first 11 months of operation. It expects
Duas Barras' production to reach 35,000 carats of diamonds and 850
ounces troy ounces of gold in 2008.


---True North Gems Private Placement Raises $1M

True North Gems Inc. completed an initial closing of a private
placement with gross proceeds of $1.003 million. True North Gems
intends to use the majority of proceeds for exploration expenditures
and a feasibility study at the Fiskenaesset Ruby Project, located on
the west coast of Greenland.


---Sacre-Coeur Raises More than $1M in Private Placement

Sacre-Coeur Minerals Ltd. raised CAD1.55 million through a
non-brokered private placement. The company issued 1 million units at
CAD1.55 per unit to a single institutional investor.


---Namakwa Diamonds Forms Partnership for Offshore Concessions

Namakwa Diamonds has partnered with marine mining contractor Nutam to
further the development of the company’s Namibian offshore mining
concessions. Namakwa’s subsidiary Tidal Diamonds signed a memorandum
of understanding (MOU) with Nutam for an initial service agreement to
evaluate Tidal’s offshore mining and prospecting areas, and to perform
operational work including resource verification.


---Saad Investments Increases Stake in Petra Diamonds to 36%

Saad Investments Co. Ltd., now holds about 65.3 million shares
representing almost 36 percent of Petra Diamonds' ordinary issued
share capital. Petra Diamonds Limited is a Bermuda registered company
and as such is not subject to the Takeover Code and accordingly there
is no obligation for a mandatory offer under the Rules of the Takeover
Code by any shareholder increasing their holding above 30 percent.
Saad Investments is registered in the Cayman Islands and operates out
of Saudi Arabia.


---Trans Hex in Talks to Buy De Beers' Namaqualand Mine

Trans Hex is in exclusive talks with De Beers Consolidated Mines
(DBCM) for buying the Namaqualand Diamond Mine. Trans Hex shares rose
2.3 percent to ZAR 9 in late morning trade on the Johannesburg Stock
Exchange on Thursday following the announcement. De Beers said it
expects production at Namaqualand, South Africa’s largest alluvial
diamond mine, to reach 300,000 carats in 2008.


---Rockwell Diamonds Resumes Operations as Wage Dispute Ends

Rockwell Diamonds Inc. resumed operations at all its South Africa
mines on Wednesday after reaching a wage agreement with the National
Union of Mineworkers. The company’s Wouterspan Mine was suspended on
July 25 after employees declared industrial action over the wage
dispute. Work stoppages followed at Rockwell's three other mines:
Holpan, Klipdam and Saxendrift - in mid-August when negotiations hit a
deadlock there.



ECON WATCH:

For week ending September 4, 2008

Sept 4 Aug 21 Chng

$1 = Euro 0.698 0.680 0.018
$1 = Rupee 44.7 43.7 0.9
$1 = Israel Shekel 3.57 3.60 -0.03
$1 = Rand 8.01 7.73 0.27
$1 = Canadian Dollar 1.07 1.05 0.02


Precious Metals
Sept 4 Aug 21 Chng

Gold $796.30 $835.10 -$38.80
Platinum $1,387.00 $1,462.00 -$75.00

Stock Indexes
Sept 4 Aug 21 Chng Chng%

BSE 14,899.10 14,048.34 850.76 6.06%
Dow Jones Avg. 11,188.23 11,715.18 -526.95 -4.50%
FTSE 5,362.10 5,601.20 -239.10 -4.27%
Hang Seng 20,389.48 20,972.29 -582.81 -2.78%
S & P 500 1,237.09 1,300.68 -63.59 -4.89%
Yahoo! Jewelry Index 966.95 992.31 -25.36 -2.56%

USA
Abazias $1.50 $1.50 $0.00 0.00%
Birks & Mayors $2.35 $2.35 $0.00 0.00%
Blue Nile $39.79 $42.74 -$2.95 -6.90%
Charles & Colvard $0.64 $0.63 $0.01 1.59%
Collector's Universe $7.72 $8.09 -$0.37 -4.57%
DGSE Companies, Inc. $3.10 $3.08 $0.02 0.65%
Fuqi International $11.15 $10.56 $0.59 5.59%
JCPenney $39.57 $39.04 $0.53 1.36%
Kohl's $50.74 $49.93 $0.81 1.62%
Lazare Kaplan $8.00 $8.25 -$0.25 -3.03%
LJ International $1.62 $1.65 -$0.03 -1.82%
Macy's $20.69 $20.65 $0.04 0.19%
Man Sang $4.32 $4.97 -$0.65 -13.08%
Movado Group $22.41 $23.60 -$1.19 -5.04%
Nordstrom $31.99 $30.67 $1.32 4.30%
Saks $11.27 $11.63 -$0.36 -3.10%
Signet $11.21 $11.47 -$0.26 -2.27%
Sotheby's $25.77 $27.46 -$1.69 -6.15%
Tiffany $43.50 $43.85 -$0.35 -0.80%
Wal-Mart $59.78 $59.88 -$0.10 -0.17%
Zale $27.94 $27.92 $0.02 0.07%

EUROPE
Bulgari €7.10 €6.55 €0.55 8.40%
Citizen Holdings €5.09 €4.51 €0.58 12.86%
Esa €11.50 €12.70 -€1.20 -9.45%
Golay-Buchel CHF 2,338.00 CHF 2,340.00 -CHF 2.00 -0.09%
LVMH €71.30 €72.96 -€1.66 -2.28%
Pinault P-R SA €76.49 €76.43 €0.06 0.08%
Richemont SA CHF 64.85 CHF 63.70 CHF 1.15 1.81%
Sakha Diamonds €0.17 €0.26 -€0.08 -32.42%
Swatch Group CHF 264.50 CHF 259.50 CHF 5.00 1.93%
Theo Fennell (pence) 48.00 46.75 €1.25 2.67%

HONG KONG
Hang HKD 1.95 HKD 1.95 HKD 0.00 0.00%
King Fook HKD 0.65 HKD 0.66 -HKD 0.01 -1.52%
Noble Jewelry HKD 1.02 HKD 1.00 HKD 0.02 2.00%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

Rapaport TradeWire - Friday, Sept. 12, 2008
*******************************************
NEWS: Diamond industry heads to Hong Kong with high hopes that strong
Far East demand will sustain high price levels. U.S. holiday season
looking weak but well marketed jewelry brands may do much better than
expected. Europe and Asia buying better quality under the carat certs.
Shanghai Diamond Exchange introduces 0.3% ($3 per thousand)
transaction fee on polished diamond imports. U.S. July polished
imports at record $2 bil. (+21%) and polished exports $1.3 bil.
(+56%). Canada 2007 diamond production at 17 mil. cts (+28%) with
value at $1.44 bil (-10%). Australia 2Q08 diamond production at 3.142
million carats (-31%) but higher prices push value to $127.52 million
(+26%). Movado Group 2Q08 sales $129.7 mil. (-7%) and profits $8.14
mil. (-34%). Lazare Kaplan FY08 sales $369.7 mil. (-15%) and profits
at $7 mil. recovering from $3 mil. loss in 2Q07. Harry Winston 2Q
retail sales $81.1 mil. (+19%,) rough sales flat at $105 mil. company
profits double to $49.95 mil.



ANNOUNCEMENTS:


RAPAPORT BELGIUM ROUGH DIAMOND TENDER

Viewing By Appointment Only Sept. 15-19, 2008
Tender Close: Friday, Sept. 19 at 3:00 PM

Contact Shavit Gaistman, tender@diamonds.net, +32-3232-3300
---------------------------------------------

RAPAPORT WILL EXHIBIT AT:
Shenzhen and Hong Kong shows
View details:
http://www.diamonds.net/Events/default.aspx

===========================================-


RETAIL QUOTE:

"Our businesses in Asia, Europe and the Middle East have been
sufficient to offset the general market softness in the U.S. and
Japan; this contributed to our strong retail finish for second
quarter. Together with solid results from the first quarter, the first
half of the year has put us on firm footing..."

---Thomas J. O'Neill, president of Harry Winston




WORLD NEWS:

---Rio Tinto Survey Finds Rough Shortage #1 Concern for Industry

Diamond professionals consider the shortage of rough supply as the
most important challenge facing the diamond industry during the next
five years, according to a survey conducted by Rio Tinto Diamonds.
'The 2008 Survey of Rio Tinto’s Diamond Business Stakeholders'
revealed that of the 159 people who participated - representing a 23
percent response rate - 31 listed the supply shortage as their chief
concern for the coming years.

The second biggest challenge was pricing and lower profit margins, as
expressed by 20 stakeholders, while synthetic / artificial diamonds
was most prevalent for 19 participants. Other major issues included
‘reputation, image, and marketing issues;’ supply chain transparency;
and Kimberley Process compliance. Just eight respondents said economic
conditions were the most important challenges facing the industry.


---Shanghai Introduces Transaction Fee on Polished Diamond Imports

The Shanghai Diamond Exchange (SDE) adds a transaction fee on polished
diamonds imported to China beginning October 1, 2008. Importers will
pay a 0.3 percent transaction fee on the import value of their goods.
The minimum charge on any shipment will be CNY 300 (approximately
$44.) The fee is in addition to the 4 percent value added tax (VAT) on
imports.


---South Africa's 2Q Gold Production -10%

South Africa’s gold production nationwide fell 10.4 percent to 56,933
kilograms in the second quarter of 2008 as the country’s electricity
crisis continued to impact the sector. The Chamber of Mines of South
Africa reported that production from its members also fell 12.9
percent to 47,329.8 kilograms in April through June from one year ago.
For the first half of 2008, South Africa’s production declined 13.6
percent to 109,160.8 kg.


---Rapaport News Broadcast

Weak retail in the U.S. continues to dampen market spirit and trade,
but Kwiat bucks those worries and opens a beautiful new store on
Madison Ave., New York. The Harry Oppenheimer Israel Diamond Museum
opened 'Apples of Gold in Pictures of Silver' an exhibition of rare
and ancient jewelry excavated at various archeological sites in
Israel.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23267




DIAMOND STATS:

---USA July Imports/Exports (YTD= year to date)

July 08 %Chng YTD 08 %Chng
($Mil) 07 ($Mil) 07

Polished Imports $2,021 21% $12,350 18%
Polished Exports $1,279 56% $9,078 49%
Net Polished $ 742 -12% $3,272 -25%

Rough Imports $ 97 41% $546 11%
Rough Exports $ 41 24% $252 -11%
Net Rough $ 56 56% $294 40%

Diamond Account $ 798 -9% $3,566 -22%



---Australia's 2Q Diamond Production -31% But Export Values Rise

Australia's diamond production fell 30.5 percent to 3.142 million
carats during the three months ending June 30, 2008. Australia
exported all 3.142 million carats of diamonds during the quarter and
exports by value rose 26.4 percent to AUD 158 million ($127.52
million,) from one year ago. The average price on diamond exports rose
82 percent to AUD 50.28 ($40.5 per carat.


---Russia's 1H08 Rough Exports at $955M

Russia exported 14.361 million carats in rough diamonds worth $955
million in the first half of 2008. The country exported the bulk of
rough, or 10.447 million carats in diamonds ($711 million,) to the
European Union, and imported 73,289 carats ($18 million) from Europe.
Russia exported 52,437 carats to the United States during the same
period with a value of $9.475 million, according to U.S. government
data.


---Canada’s Diamond Production +28% to 17M Carats in 2007

Canada’s diamond production rose 28 percent to 17 million carats in
2007. Production by value fell 9.6 percent to $1.44 billion during the
year.



RETAIL & WHOLESALE NEWS:

---Harry Winston 2Q Sales +7%, Profits Increase for Both Segments

Harry Winston Diamond Corporation's consolidated sales for its fiscal
second quarter of 2009 rose 7 percent, generating a 23 percent
increase in gross margin and a 30 percent increase in consolidated
earnings from operations. Quarterly sales were $186.1 million and net
earnings more than doubled to $49.947 million, which included a net
$5.3 million foreign exchange gain. Rough diamond sales were flat at
$105 million, but higher prices offset lower carat production. The
retail segment recorded a 19 percent increase in sales to $81.1
million. Gross margin as a percentage of retail sales rose to 49.3
percent from 47.8 percent in second quarter fiscal 2008. Earnings from
retail operations rose 82 percent to $5.91 million.


---Lazare Kaplan FY08 Sales Drop But Profits Soar to $7M

Lazare Kaplan International Inc.'s fourth fiscal quarter sales fell
2.6 percent to $94.4 million for the period ending May 31, 2008. Gross
margin rose from 5.6 percent to 10.4 percent. Net income for the
fourth quarter rose to $3.178 million from $154,000 one year ago.
Lazare Kaplan's full fiscal year sales fell 14.9 percent to $369.7
million. Gross margin rose from 5.3 percent to 8.9 percent. Net income
for the fiscal year came in at $7.2 million -- up from a loss of $2.97
million in fiscal 2007.


---Movado Group 2Q Sales -7%, Net Income -34%

Movado Group sales for three months ending July 31, 2008, fell 7
percent to $129.7 million. Cost of sales fell 18 percent to $45.8
million, but selling and general administration expenses rose 9
percent to $73 million, during this second quarter for Movado's fiscal
year 2009. Gross profit (65 percent of sales) was flat at $83.9
million, but net income fell 33.6 percent to $8.136 million.


---Jubilee Diamond Sets IPO Date for Dec. '08

Jubilee Enterprise, a diamond and jewelry vendor, will hold its
initial public offering (IPO) and list on Thailand's Market for
Alternative Investment in December. The marketer of the Jubilee
Diamond brand will float 55 million new shares at one baht (3-cents.)


---Kristall to Increase Rough Buying Abroad by Factor of Eight

Kristall of Smolensk, Russia’s biggest diamond cutting enterprise
plans to spend "at least $25 million" on rough diamonds abroad this
year. Kristall is De Beers' sole Russian sightholder, but currently
buys 65 percent of its rough from Russian diamond miner ALROSA.
Kristall’s general director, Maxim Shkadov, has said the company was
buying more rough diamonds abroad partly because ALROSA had increased
prices.


---Five Pound Pearl is a Record Says EGL USA

EGL USA authenticated one of the largest pearls ever to be discovered
and documented. The brain-shaped specimen — a giant non-nacreous
natural blister pearl — weighs an incredible five pounds (2.267 kilos)
and measures some six inches in length. It was found in the waters off
the Philippines in a giant clam.



GENERAL NEWS:

---GIA GemFest Hong Kong 2008 on Sept. 19

The Gemological Institute of America (GIA) Alumni Association will
hold its GemFest Hong Kong 2008 during the Hong Kong Jewellery & Watch
Fair on Friday, September 19 at the Hong Kong Convention and
Exhibition Centre in Room 601.


---Seminar: 'Legal Compliance is NOT Optional' Comes to 47th Street in
Oct.

Jewelers Vigilance Committee (JVC) will present “Legal Compliance is
NOT Optional” to members of the New York City’s 47th Street Business
Improvement District on Wednesday, October 29, 2008, from 9:30 a.m. to
11:00 a.m. This seminar is exclusive for Diamond District businesses.
To register, visit JVC’s Web site: www.jvclegal.org. For questions,
contact the BID, 212-302-5739 or JVC, 212-997-2002.


---IGI Launches Diamond Typing Service

The International Gemological Institute (IGI) added a new
identification offering to its existing gemological services. IGI
Diamond Typing, available via the New York laboratory, divides
diamonds into four major types, Ia, Ib, IIa and IIb, based upon the
concentration levels of nitrogen and/or boron in a given stone, as
well as the state of aggregation of present nitrogen within its
crystal lattice. If a diamond is determined fit for color treatment,
knowing the type aids in establishing the proper treatment conditions
(temperature, pressure, irradiation, etc.) and assists in forecasting
the color of the diamond after treatment.



WHO IS NEWS:

---ALROSA's Sergey Oulin Receives Belarus Order of Honor

ALROSA vice president Sergey Oulin was awarded an Order of Honor by
special decree of the President of Belarus Alexander Lukashenko. Oulin
was presented the award on September 2, 2008, for "his considerable
personal contribution to developing international trade and economic
relations in the diamond industry." Oulin was appointed vice president
of ALROSA in December 2007.


---IDI Appoints Alissa Goren Chief Marketing Officer

The Israel Diamond Institute Group of Companies (IDI) appointed Alissa
Goren as its deputy managing director and chief marketing officer to
be responsible for implementing IDI’s marketing strategy. Goren joined
IDI in 2000 and has served as the organization’s director of
marketing, public relations and trade shows since 2004. IDI explained
that her promotion was in keeping with the group's reorganization
which has taken place over the past year.



DIAMOND MINING NEWS:

---RBC Lowers Price Target on Gem Diamonds, Firestone, Kopane, Pangea

RBC Capital Markets lowered its 12-month price target for Gem Diamonds
due to expected higher costs at the miner’s Ellendale operation in
Australia and lost production at its Cempaka mine in Indonesia. RBC
set a 12 month share target price for Gem Diamonds at GBP 12.06, down
from GBP 14.20. Firestone Diamonds was lowered to GBP 1.40 from GBP
2.30; Kopane Diamond Developments was lowered to GBP 0.13 from GBP
0.20; and Pangea Diamondfields was lowered to GBP 0.40 from GBP 0.70.


---Investment Firm Bids $86M for Rockwell Diamonds

Pala Investments Holdings Ltd offered $85.7 million to buy up Rockwell
Diamonds' shares. The (British) Channel Islands-based strategy
investment company owns approximately 20 percent of the junior diamond
miner. Rockwell called the offer opportunistic and urged shareholders
not to tender their shares until the board of directors has reviewed
the proposed transaction.


---Tawana Resources Uses Tender to Assess Diamond Value

Tawana Resources placed a parcel of 222.71 carats of diamonds from its
Kareevlei project on tender to better assess the value of the stones.
The diamonds were valued at an average $169 per carat with one 3.741
carat stone valued at $2,800 per carat. The parcel was withdrawn from
the sale after the close of the tender. The value derived from the
tender process was 40 percent higher than the average value of
diamonds from a kimberlite parcel from Kareevlei assessed by
independent valuators in 2005.


---ALROSA Green Lights Namibia Diamond Prospecting

ALROSA’s board gave the green light to commence prospecting work to
identify the diamond potential at the Vryheid-Ritfontein kimberlite
field in Namibia. The company acknowledged the viability of diamond
prospecting in the field given the available geological data and
experience acquired by ALROSA geologists in 2007 from similar
prospecting carried out at the nearby Warmbad area.


---Gemfields Acquires Madagascar Color Gemstone Miner

Gemfields Resources plc acquired Madagascar-based color gemstone
producer Oriental Mining. Oriental has the rights to 15 exploration
licenses covering emeralds, rubies, sapphires, tourmalines and garnets
in the Antananarivo, Fianarantsoa and Toliara provinces of Madagascar.
It also has the right to five exploration licenses that are pending
approval from the Madagascan Ministry of Energy and Mines, Gemfields
explained. Gemfields recently gained the exclusive license to use the
Fabergé brand name in respect to colored gemstones, excluding
diamonds.



ECON WATCH:

For week ending September 11, 2008

Sept 11 Sept 4 Chng

$1 = Euro 0.716 0.698 0.017
$1 = Rupee 45.9 44.7 1.2
$1 = Israel Shekel 3.63 3.57 0.06
$1 = Rand 8.15 8.01 0.15
$1 = Canadian Dollar 1.08 1.07 0.01


Precious Metals

Sept 11 Sept 4 Chng

Gold $748.90 $796.30 -$47.40
Platinum $1,138.00 $1,387.00 -$249.00



Stock Indexes

Sept 11 Sept 4 Chng Chng%

BSE 14,324.29 14,899.10 -574.81 -3.86%
Dow Jones Avg. 11,433.71 11,188.23 245.48 2.19%
FTSE 5,318.40 5,362.10 -43.70 -0.81%
Hang Seng 19,388.72 20,389.48 -1,000.76 -4.91%
S & P 500 1,249.05 1,237.09 11.96 0.97%
Yahoo! Jewelry Index 1,171.56 966.95 204.61 21.16%

USA
Abazias $1.50 $1.50 $0.00 0.00%
Birks & Mayors $2.25 $2.35 -$0.10 -4.26%
Blue Nile $39.21 $39.79 -$0.58 -1.46%
Charles & Colvard $0.57 $0.64 -$0.07 -10.94%
Collector's Universe $7.34 $7.72 -$0.38 -4.92%
DGSE Companies, Inc. $2.67 $3.10 -$0.44 -14.03%
Fuqi International $10.59 $11.15 -$0.56 -5.02%
JCPenney $43.22 $39.57 $3.65 9.22%
Kohl's $52.53 $50.74 $1.79 3.53%
Lazare Kaplan $7.63 $8.00 -$0.37 -4.63%
LJ International $1.31 $1.62 -$0.31 -19.14%
Macy's $21.85 $20.69 $1.16 5.61%
Man Sang $3.64 $4.32 -$0.68 -15.74%
Movado Group $24.48 $22.41 $2.07 9.24%
Nordstrom $35.53 $31.99 $3.54 11.07%
Saks $11.64 $11.27 $0.37 3.28%
Signet $23.12 $11.21 $11.91 106.24%
Sotheby's $23.03 $25.77 -$2.74 -10.63%
Tiffany $42.72 $43.50 -$0.78 -1.79%
Wal-Mart $63.17 $59.78 $3.39 5.67%
Zale $26.99 $27.94 -$0.95 -3.40%

EUROPE
Bulgari €6.77 €7.10 -€0.33 -4.65%
Citizen Holdings €5.32 €5.09 €0.23 4.52%
Esa €10.05 €11.50 -€1.45 -12.61%
Golay-Buchel CHF 2,338.00 CHF 2,338.00 CHF 0.00 0.00%
LVMH €67.34 €71.30 -€3.97 -5.56%
Pinault P-R SA €72.70 €76.49 -€3.79 -4.95%
Richemont SA CHF 59.10 CHF 64.85 -CHF 5.75 -8.87%
Sakha Diamonds €0.34 €0.17 €0.16 94.22%
Swatch Group CHF 234.20 CHF 264.50 -CHF 30.30 -11.46%
Theo Fennell (pence) 46.00 48.00 -€2.00 -4.17%

HONG KONG
Hang HKD 1.69 HKD 1.95 -HKD 0.26 -13.33%
King Fook HKD 0.65 HKD 0.65 HKD 0.00 0.00%
Noble Jewelry HKD 0.95 HKD 1.02 -HKD 0.07 -6.86%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 40.05 40.75 -0.70 -1.72%
Gitanjali Gems 218.35 238.70 -20.35 -8.53%
Rajesh Exports 46.80 49.05 -2.25 -4.59%
Reliance 1,997.60 2,152.65 -155.05 -7.20%
Su-Raj Diamonds 61.20 61.40 -0.20 -0.33%
Titan 1,178.35 1,244.25 -65.90 -5.30%
Zodiac JRD 24.05 25.00 -0.95 -3.80%
Shantivijay Jewels 160.85 155.50 5.35 3.44%
Shukra Jewellery 2.55 2.82 -0.27 -9.57%
Suashish Diamonds 445.30 435.30 10.00 2.30%

NEW ZEALAND
Michael Hill NZD 0.88 NZD 0.90 -NZD 0.02 -2.22%

SINGAPORE
Gems TV Holdings SGD 0.110 SGD 0.115 -SGD 0.005 -4.35%
Sarin Technologies SGD 0.300 SGD 0.305 -SGD 0.005 -1.64%



MINING STOCKS

(pence unless noted)

Sept 11 Sept 4 Chng Chng%

USA
Anglo American $20.50 $21.26 -$0.76 -3.57%

CANADA
Archangel CAD 0.50 CAD 0.56 -CAD 0.07 -11.61%
Harry Winston CAD 18.91 CAD 19.61 -CAD 0.70 -3.57%
Mountain Province CAD 3.35 CAD 4.20 -CAD 0.85 -20.24%
Peregrine Diamonds CAD 0.40 CAD 0.39 CAD 0.01 2.56%
Rockwell Diamonds CAD 0.32 CAD 0.21 CAD 0.11 50.00%
Shore Gold CAD 1.05 CAD 1.28 -CAD 0.23 -17.97%
Stornoway Diamond CAD 0.26 CAD 0.28 -CAD 0.02 -5.45%
True North Gems CAD 0.23 CAD 0.28 -CAD 0.05 -17.86%

UK (pence)
African Diamonds 46.6 46.6 0.0 0.00%
BHP Billiton 1,405.0 1,486.0 -81.0 -5.45%
Firestone Diamonds 56.0 65.0 -9.0 -13.84%
Gem Diamonds 729.5 825.0 -95.5 -11.58%
Mano River 7.0 7.1 -0.1 -1.75%
Mwana Africa 25.5 27.8 -2.3 -8.11%
Namakwa Diamonds 128.0 141.0 -13.0 -9.22%
Petra Diamonds 105.8 109.0 -3.3 -2.98%
Rio Tinto plc 4,158.00 4,471.00 -313.0 -7.00%




INDIA MARKET REPORT:

---Polished: The markets resumed some activity following Jain and
traders are preparing for the upcoming Hong Kong show. Business in the
local market is greatly affected by weakening rupee against the
dollar.

-1 point: Good demand: +$300 whites.
Fair demand: $150-$300 whites;
$150-$350 TTLC & $175-$250 white natts.

-2 point: Good demand: +$300 whites.
Fair demand: $125-$150 TTLB & $125-$400 TTLC.

2-7 point: Good demand: +$250 whites.
Fair demand: $100-$150 TTLB & $125-$400 TTLC.

8-18 point: Good demand: +$600 whites.
Fair demand: $150-$200 TTLB & $200-$450 TTLC.

20 points: Good demand: +$650 whites.
Fair demand: $200-$400 whites.

25 points: Good demand: +$700 whites.
Fair demand: $200-$450 whites.

33 points: Good Demand: $1400-$1600 whites.
Fair Demand: $150-$500 whites.

50 points: Good demand: +$2000 & $1000-$1,500 whites
Fair demand: $700-$800 & $300-$500 whites.

75 points: Good demand: +$3,000 whites.
Fair demand: $700-$900 whites.

1 carat+: Good demand: +$5,000 whites.
Fair demand: $1,500-$4,500 whites.

Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Good demand: +14 pts $600-$650 whites
Fair demand: $225-$275 & $300-$400 whites.

20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Good demand: $1,200-$1,400 whites.
1 carat+: Good demand: +$1,500 whites.

Marquise: -6 point: Good demand: $250-$350 & $400-$500 whites.
+7-18 point: Very good demand: $500-$650 & +14-point $850-
$900 whites.
Good demand: $225-$300 & +14-point $300-$350
whites.
20 point: Good demand: $675-$725 & $950-$1000 whites.
Fair demand: $325-$375 whites.
25 point: Good demand: $1,000-$1,100 whites.
Fair demand: $400-$450 whites.
33 point: Good demand: $1,200-$1,400 whites.
50 point: Good demand: $1,600-$1,800 whites.
75 point: Good demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Very Good demand: +$1,200 whites.

Tapers & Baguettes:
Good demand: $550-$800 +5mm whites. $225-$300
2mm-2.5mm whites; $300-$350, 2.5mm-3mm whites;
$350-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.


---ROUGH: Market resumed trade after Jain. Some financial hardships
seen in Surat market (state of Gujarat).

1-5 point: Very good movement: $80-$150 makeables; $100-$200 crystals.
Good movement: $30-$75 makeables.
Good movement: $50-$100 OW TTLB & TTLC;
Fair movement: $5-$20 OW TTLB & TTLC.

6-20 point: Good demand: $150-225 crystals; $130-$180 makeables.
Fair demand: $40-$140 makeables; $60-$80 clivage;
$50-$100 makeables; Very good movement $80-$180;
Fair demand $60-$120 fancy shapes;
$70-$120 OW TTLC & TTLB rounds.

21-50 point: Good demand: $235-300 makeables; $170-$360 crystals.
Fair demand: $110-$220 rounds; $100-$150 crystals; $70-
$130 clivage; Very good movement $150-$230 and
Fair demand $75-$100 fancy shapes; Good demand $70-$150 &
Fair demand $20-$50 OW TTLC & TTLB.

0.51-1.00 carat: Good demand: $80-$125 & $150-$350 makeables;
$125-$250 & $300-$500 crystals.
Fair demand: $70-$100 clivage; Very good demand $225-
$325 and Fair demand $70-$125 fancy shapes;
Good demand $140-$180 & Fair demand $90-$125 OW TTLC
& TTLB.

1.01-2.00 carat: Fair demand: $225-$650 rounds; $225-$800 crystals;
$125-$170 clivage; $200-$400 all fancy shapes.
Good demand $170-$225 OW TTLC & TTLB.

2.01-3.00 carat: Good demand: $225-$1,500 makeables; $500-$1,000 OW
TTLC & TTLB & $350-$1,700 crystals.
Fair demand: $300-$400 clivage; $125-$400 flats &
$500-$1,000 fancy shapes.

5.00 carat+: Very good demand: $1,200+ makeables, crystals & all fancy
shapes till L color.

Rapaport TradeWire - Friday, September 19, 2008
***********************************************

News: Global financial meltdown destroys confidence in banks and
traditional financial institutions as it sharply reduces consumer
wealth and luxury demand. Gold surges $140 to $918oz. Very strong
traffic at Hong Kong show with some Far East buying of commercial
goods but great confusion and concern for large stones as dealers try
to project impact of plummeting stock market and surging gold prices.
Luxury demand is in deep trouble but investment demand may save big
stones. South Africa blocks some diamond imports and exports delaying
DTC South African sight. ALROSA rough auction nets $15 mil. (80% sold
by lot). NY court dismisses Fortunoff’s Chapter 11 bankruptcy after
deal reached with creditors. Whitehall to sell off 355 remaining
leases. Belgium Aug. rough imports at $665 mil. (-18%) and polished
exports at $405 mil. (-16%). India Aug. rough imports at $665 mil.
(-3%) and polished exports $1.42 bil. (+7%).



ANNOUNCEMENTS:

Did you miss the Rapaport International Diamond Conference?
Pay-per-view webcast of the entire event is now available:

https://www.diamonds.net/Conference/2008/Register.aspx

===================================================


RETAIL QUOTE:

TNS Retail Forward estimates U.S. Christmas retail sales to increase
1.5 percent to $527 billion (not accounting for inflation / price
increases.)

"I think the current environment is putting a chill on shoppers'
spending in ways we haven't seen for a long time. One of the hallmarks
of consumer spending is that shoppers were quite resilient. But the
price shocks that households have seen, the shocks to the financial
system have left them shaken."

---Frank Badillo
Senior economist for TNS Retail Forward



WORLD NEWS:

---Worst U.S. Crisis Since 1930s - No End in Sight

Hopeful expectations for a quick resolution are fading fast as the
financial crisis that began 13 months ago entered a new, far more
serious phase. The consequences for companies and chief executives who
hope for better times in which to raise capital, sell assets or
acknowledge losses -- are now clear and brutal, as falling share
prices and fearful lenders send troubled companies into ever-deeper
holes. Many failures have now resulted in government intervention that
is more extensive and expensive, and carries greater risk of
unintended consequences.


---S. Africa Export Issues Arise Before De Beers Sight

De Beers rough for its September sight didn't leave South Africa for
sorting in London. But the Diamond Trading Company vowed to supply
South Africa clients with unsorted rough (although on a much smaller
than normal scale) one week late. Sights in London, Botswana, and
Namibia will proceed as planned September 22-26.

The issue centers around required exemption filings, and delays in
implementing the Diamond Export Levy Act. Some dealers in South Africa
have experienced trouble shipping goods out this week, but others
(especially for smaller stones) have reported no issue with exporting.


---ALROSA Sept. Diamond Auction Nets $15M

ALROSA sold $15 million worth of rough diamonds at its 31st
International Diamond Auction in Moscow. The sales value represented a
premium of approximately 16 percent. A total of 482 diamonds, about
7,700 carats, in 148 lots were offered. Eight-percent was sold by lot.


---Thailand to Easily Beat '08 Target Jewelry Exports

Gem and jewelry exports from Thailand came in at $4.53 billion for the
first seven months of 2008. According to the Thai Gem & Jewelry
Traders Association the projected annual increase by the end of the
year was targeted at 20 percent or $5.92 billion, which now looks easy
to beat by nearly $2 billion.


---Russia Arms Exporter to Accept Diamonds, Commodities for Payment

Rosoboronexport [Russia's state-controlled arms exporter] will offer
potential clients in Africa its military equipment and supplies in
exchange for export commodities such as diamonds, timber, cotton, palm
oil, and coffee.


---Rapaport News Broadcast

Gold jumps the most in single day as the U.S. financial crisis
worsens; DTC postpones its South Africa sight one week, but also gives
access to its marketing services to four former sightholders;
Fortunoff bankruptcy ends and Whitehall assigns a realty firm to sell
355 leases.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23367



DIAMOND STATS:

---Belgium Aug. Imports/Exports (YTD= year to date)

Aug08 %Chng YTD 08 %Chng
($Mil) 07 ($Mil) 07

Polished Exports $405 -16% $8,399 22%
Polished Imports $929 31% $8,289 28%
Net Polished ($525) N/A $110 -71%

Rough Imports $665 -18% $8,186 7%
Rough Exports $937 9% $7,940 17%
Net Rough ($273) N/A $246 -72%

Diamond Account ($252) -45% ($136) 73%


---India Aug. Imports/Exports (YTD= year to date)

Aug08 %Chng YTD 08 %Chng
($Mil) 07 ($Mil) 07

Polished Export $1,423 7% $10,613 25%
Polished Imports $592 23% $4,958 110%
Net Polished $831 -3% $5,655 -7%

Rough Imports $664 -3% $7,509 14%
Rough Exports $68 43% $559 40%
Net Rough $596 -6% $6,950 12%

Diamond Account $235 7% ($1,296) N/A



RETAIL & WHOLESALE NEWS:

---Damiani Buys Rocca for $10M

Damiani purchased Rocca for EUR 7 million ($10.08 million.) Damiani
will pay EUR 2.05 million in shares and EUR 4.5 million in cash. Rocca
has 22 stores under direct management selling high-end watches and
jewelry. Rocca had revenues in 2007 of approximately EUR 39.2 million
($56.4 million,) and a net loss of approximately EUR 2 million ($2.87
million.)


---Court Dismisses Fortunoff Bankruptcy Case

New York bankruptcy court dismissed retailer Fortunoff’s Chapter 11
case. Fortunoff filed for bankruptcy in February and was subsequently
bought by NRDC Equity Partners, which owns the Lord & Taylor
department store chain. Fortunoff requested the court dismiss its case
upon reaching an agreement with its creditors.


---Whitehall Appoints DJM Realty to Dispose of 355 Retail Leases

Whitehall Jewelers Holdings Inc. selected DJM Realty, a Gordon
Brothers Group Company, to manage the national disposition of all
remaining (355) retail store leases across 38 states. The engagement
is subject to bankruptcy court approval and could conduct an auction
sometime in late October.


---DTC Names Four Former Sightholders to Program

The Diamond Trading Company launched its ‘DTC accredited business
program’ and named four non-sightholders to the scheme. Livingstones;
Premier Diamond Cutting Ltd; Richold SA; and Shree Ramkrishna Export,
each of which lost their sightholder status this year, qualify now for
DTC marketing services. DTC chose the four for having complied with
the De Beers’ Diamond Best Practice Principles.


---Signet Added to the Russell Indexes

Signet Jewelers Limited is now a member of the broad-market Russell
3000 Index, Russell 3000 Value Index, Large Cap Russell 1000 Index,
Russell 1000 Value Index, Russell 2500 Index, Russell 2500 Value
Index, Russell Midcap Index, Russell Midcap Value Index, Russell Small
Cap Completeness Index and the Russell Small Cap Completeness Value
Index.


---Collectors Universe Delays Filing Annual Report

Collectors Universe Inc. notified the Securities and Exchange
Commission of a delay in the filing of the company's annual report for
fiscal year ending June 30, 2008. Collectors Universe, which is the
parent of GCAL and AGL, expects to complete and file its report before
permitted extension period ends. Preliminary financial information for
the fiscal year and fourth quarter indicated that the firm expects to
report (before giving effect to the impairment charge) increases in
its operating loss ($6.5 million) and pre-tax loss ($5.4 million) for
fiscal 2008, which is up from $2.9 million and $800,000 one year ago.


---Ponahalo Diamonds Highlight Christie's NY Oct. Sale

Christie’s "Jewels the New York Sale" will offer diamonds, colored
diamonds and gemstones, and will include 273 lots with an expected
sale of more than $35 million. Leading the auction are two magnificent
diamonds weighing approximately 102.11 carats and 70.87 carats, cut
from a rough diamond of 316.15 carats called The Ponahalo, which was
discovered at De Beers' Venetia mine.


---Shenzhen Companies Hold 70% of China's Jewelry Market

Some 2,100 registered jewelry companies in southern Shenzhen take a 70
percent of the share in China's jewelry market with a combined annual
production value of CNY 60 billion ($8.77 billion.) The volume of
gold, diamond, platinum processed by Shenzhen jewelry providers
represents around 90 percent of the total trading volume of Shanghai
Gold Exchange and Shanghai Diamond Exchange, according to statistics.


---Fitch Foresees Weak Retail Season at Dpt. Stores

Fitch Ratings predicts weak retail sales during the Christmas season
in the United States as economic pressures continue to strain
consumers' cash flow. In the group's Retail Register report, Fitch
stated that apparel and home furnishing retailers would be hit
hardest, but food-related shops would show relative strength.
Discounters and warehouse clubs should continue to outperform other
retail formats.


---U.S. Shoppers Adopt Frugal Habits in August

Retail sales in the United States fell 0.3 percent from July to August
to $381.2 billion, according to data from the Commerce Department. The
governmental agency does not adjust for price increases, but said
compared with August 2007 retail sales rose 1.6 percent. Compared with
one year ago, department store sales fell 4.2 percent in August to
$16.84 billion.

Wholesale price inflation fell almost 1 percent in August from July
primarily due to a drop in oil prices. For the year though wholesale
prices are up 10 percent - the largest increase in 27 years. Core
inflation, which excludes energy and food price hikes, rose 0.2
percent from July to August. But the government revised upwards the
figure from June to July to 0.7 percent. Core inflation for the past
12 months is up 4 percent.



WHO IS NEWS:

---Sears Appoints New Jewelry Unit President

Sears Holdings Corporation appointed Michelle Pearlman as president of
its business unit. Pearlman joins Sears from Ann Taylor Stores
Corporation, where she served as executive vice president for ATC
Direct, leading its Internet sales division.


---Rosy Blue: New Generation of Management for Israel

Dilip Shah will leave Rosy Blue Israel to pursue other opportunities
in the diamond industry. Amish Mehta and Rosy Blue South Africa
chairman Vishal Mehta will be leading the new Israel team.


---AGTA 2009 Election Results

The American Gem Trade Association (AGTA) announced 2009 election
results for the organization's board of directors. The new officers
will serve three year terms and will be introduced at the AGTA
membership meeting February 8, 2009, in Tucson, Arizona.

President: Benjamin Hackman, Intercolor USA
Vice president: Kambiz Sabouri, Gem 2000 Inc.
Secretary: John Bachman, John M. Bachman Inc.
Treasurer: Sampat Poddar, Byrex Gems Inc.
Director: Ruben Bindra, B & B Fine Gems
Director: Ron Ringsrud, Ronald Ringsrud Co.
Director: Ambrish Sethi, Manak Jewels Inc.



GENERAL NEWS:

---Robbers Seriously Wound Dealer, Steal $1.5M in Goods

A jewelry salesman from Florida was stabbed and seriously injured near
O'Hare International Airport. The salesman had parked his car and was
heading the airport when three men attacked, slashed the dealer's
wrists, and made off with $500,000 in diamonds and about $1 million in
jewelry. The attackers drove away from the scene in a 1990s model
silver sedan with the license plate covered.


---Pakistan Abolishes Duty on Diamonds, Precious Metals

Pakistan abolished customs duties on diamonds and other jewelry
imports in effort to boost industry related trade. The country's gem
and jewelry industry has also scheduled a Pakistan Gems and Jewellery
Expo for Houston, Texas, in October.


---IDMA to Hold 2008 Presidents' Meeting in Botswana

The International Diamond Manufacturers Association (IDMA) will hold
its presidents' meeting in Gaborone, Botswana, November 10-12, 2008.


---Register Online for Antwerp Diamond Conference 2008

Registration is open for the fifth annual Antwerp Diamond Conference,
which is scheduled for November 17-18, 2008, in Antwerp.

http://www.antwerpdiamondconference.be/en/home.aspx

Keynote speakers at the gala dinner (November 17) include:

* Jacky Roth, president Antwerp World Diamond Centre
* H.R.H. King Letsie III of Lesotho
* Sir Richard Branson, CEO Virgin Group





DIAMOND MINING NEWS:

---Gemfields Proposes Offer to Tanzanite One

Gemfields Resources Plc proposed an offer for Tanzanite One Limited of
45-pence per share. The offer values the whole of issued common share
capital of Tanzanite One at approximately GBP33 million ($60 million,)
representing a premium of approximately 76.5 percent. Tanzanite One
advised shareholders to take no action until the board has examined
the offer.


---ALROSA Targets Southern D.R. Congo

ALROSA and the Democratic Republic of the Congo reached an agreement
for new diamond mining projects in the southern part of the country.
Recently, ALROSA’s board gave the green light to commence prospecting
work to identify the diamond potential at the Vryheid-Ritfontein
kimberlite field in Namibia. ALROSA also holds two joint diamond
projects in neighboring Angola.


---BHP Expects Short Term Volatility in Commodity Markets

BHP Billiton Ltd expects commodity markets to remain volatile in the
short term but has forecast Asian demand for its products to continue.
Asia's economic growth would slow at some point, but the slowdown
would be concentrated in regions reliant upon the light export sector.




ECON WATCH:


For week ending September 18, 2008


Sept 18 Sept 11 Chng

$1 = Euro 0.697 0.716 -0.019
$1 = Rupee 46.2 45.9 0.4
$1 = Israel Shekel 3.53 3.63 -0.10
$1 = Rand 8.18 8.15 0.03
$1 = Canadian Dollar 1.06 1.08 -0.02

Precious Metals

Sept 18 Sept 11 Chng

Gold $853.00 $748.90 $104.10
Platinum $1,088.00 $1,138.00 -$50.00



Stock Indexes

Sept 18 Sept 11 Chng Chng%

BSE 13,315.60 14,324.29 -1,008.69 -7.04%
Dow Jones Avg. 11,019.69 11,433.71 -414.02 -3.62%
FTSE 4,880.00 5,318.40 -438.40 -8.24%
Hang Seng 17,632.46 19,388.72 -1,756.26 -9.06%
S & P 500 1,206.51 1,249.05 -42.54 -3.41%
Yahoo! Jewelry Index 1,156.38 1,171.56 -15.18 -1.30%


USA
Abazias $1.40 $1.50 -$0.10 -6.67%
Birks & Mayors $2.08 $2.25 -$0.17 -7.56%
Blue Nile $49.25 $39.21 $10.04 25.61%
Charles & Colvard $0.49 $0.57 -$0.08 -14.04%
Collector's Universe $7.28 $7.34 -$0.06 -0.82%
DGSE Companies, Inc. $2.52 $2.67 -$0.14 -5.44%
Fuqi International $8.92 $10.59 -$1.67 -15.77%
JCPenney $38.99 $43.22 -$4.23 -9.79%
Kohl's $51.08 $52.53 -$1.45 -2.76%
Lazare Kaplan $7.80 $7.63 $0.17 2.23%
LJ International $1.04 $1.31 -$0.27 -20.61%
Macy's $19.91 $21.85 -$1.94 -8.88%
Man Sang $3.07 $3.64 -$0.57 -15.66%
Movado Group $23.23 $24.48 -$1.25 -5.11%
Nordstrom $33.54 $35.53 -$1.99 -5.60%
Saks $10.80 $11.64 -$0.84 -7.22%
Signet $23.23 $23.12 $0.11 0.48%
Sotheby's $20.79 $23.03 -$2.24 -9.73%
Tiffany $38.22 $42.72 -$4.50 -10.53%
Wal-Mart $61.48 $63.17 -$1.69 -2.68%
Zale $28.15 $26.99 $1.16 4.30%

EUROPE
Bulgari €6.31 €6.77 -€0.46 -6.79%
Citizen Holdings €5.19 €5.32 -€0.13 -2.44%
Esa €10.09 €10.05 €0.04 0.40%
Golay-Buchel CHF 2,349.00 CHF 2,338.00 CHF 11.00 0.47%
LVMH €64.40 €67.34 -€2.93 -4.36%
Pinault P-R SA €69.12 €72.70 -€3.59 -4.93%
Richemont SA CHF 53.70 CHF 59.10 -CHF 5.40 -9.14%
Sakha Diamonds €0.27 €0.34 -€0.06 -18.45%
Swatch Group CHF 211.80 CHF 234.20 -CHF 22.40 -9.56%
Theo Fennell (pence) 46.00 46.00 €0.00 0.00%

HONG KONG
Hang HKD 1.64 HKD 1.69 -HKD 0.05 -2.96%
King Fook HKD 0.57 HKD 0.65 -HKD 0.08 -12.31%
Noble Jewelry HKD 0.82 HKD 0.95 -HKD 0.13 -13.68%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 34.30 40.05 -5.75 -14.36%
Gitanjali Gems 209.70 218.35 -8.65 -3.96%
Rajesh Exports 35.10 46.80 -11.70 -25.00%
Reliance 1,932.85 1,997.60 -64.75 -3.24%
Su-Raj Diamonds 47.45 61.20 -13.75 -22.47%
Titan 1,109.70 1,178.35 -68.65 -5.83%
Zodiac JRD 22.05 24.05 -2.00 -8.32%
Shantivijay Jewels 168.75 160.85 7.90 4.91%
Shukra Jewellery 3.20 2.55 0.65 25.49%
Suashish Diamonds 431.95 445.30 -13.35 -3.00%

NEW ZEALAND
Michael Hill NZD 0.75 NZD 0.88 -NZD 0.13 -14.77%

SINGAPORE
Gems TV Holdings SGD 0.110 SGD 0.110 SGD 0.000 0.00%
Sarin Technologies SGD 0.280 SGD 0.300 -SGD 0.020 -6.67%


MINING STOCKS

(pence unless noted)

Sept 18 Sept 11 Chng Chng%

USA
Anglo American $19.44 $20.50 -$1.06 -5.17%

CANADA
Archangel CAD 0.50 CAD 0.50 CAD 0.01 1.01%
Harry Winston CAD 17.00 CAD 18.91 -CAD 1.91 -10.10%
Mountain Province CAD 2.90 CAD 3.35 -CAD 0.45 -13.43%
Peregrine Diamonds CAD 0.35 CAD 0.40 -CAD 0.05 -12.50%
Rockwell Diamonds CAD 0.29 CAD 0.32 -CAD 0.03 -9.52%
Shore Gold CAD 0.75 CAD 1.05 -CAD 0.30 -28.57%
Stornoway Diamond CAD 0.23 CAD 0.26 -CAD 0.03 -11.54%
True North Gems CAD 0.24 CAD 0.23 CAD 0.01 4.35%

UK (pence)
African Diamonds 47.0 46.6 0.4 0.86%
BHP Billiton 1,317.0 1,405.0 -88.0 -6.26%
Firestone Diamonds 55.0 56.0 -1.0 -1.79%
Gem Diamonds 680.0 729.5 -49.5 -6.79%
Mano River 7.0 7.0 0.0 -0.60%
Mwana Africa 22.0 25.5 -3.5 -13.73%
Namakwa Diamonds 103.0 128.0 -25.0 -19.53%
Petra Diamonds 97.0 105.8 -8.8 -8.27%
Rio Tinto plc 3,655.00 4,158.00 -503.0 -12.10%

Rapaport TradeWire - Friday, September 26, 2008

News: Diamond markets show signs of stress with some downward pressure
on prices. Financial crisis reducing market expectations with
increasing concerns that diamond prices may fall. Big stone liquidity
decreasing, but sellers refusing low offers. DTC Sept. sight estimate
at $600 mil. Gold rises 12% to $880/oz. as credit and dollar declines.
U.S. Aug. jewelry prices increase +10% (CPI Jewelry Index). Gem
Diamonds recovers 478ct., D color, rough diamond from Letseng mine.
Abbey Chikane leaves post as South Africa State Diamond Trader. U.S.
Employment Commission sues Sterling for sex discrimination. Tiffany to
open store in Berlin. IGI opens diamond grading lab in Ramat Gan.


ANNOUNCEMENTS:

Did you miss the Rapaport International Diamond Conference?
Pay-per-view webcast of the entire event is now available:

https://www.diamonds.net/Conference/2008/Register.aspx

===================================================



RETAIL QUOTE:

“The number of orders for exclusive diamond jewelry is growing mainly
due to the strong crown, so Czech clients are starting to invest money
in luxurious jewelry and watches.”

---Michaela Jetmarová, Dušák in Prague



WORLD NEWS:

---DTC Sept. Sight $600M, Some Sightholders Reject Goods

The Diamond Trading Company’s (DTC) eighth sight of 2008 reflected
some stability in prices and assortment of goods supplied by De Beers,
but there seemed to be a somber mood amongst sightholders who say they
feel the pinch from recent price increases. The sight had an estimated
value of $600 million, and there was some ex-plan. Some sightholders
rejected goods. The September sight was among the smaller sights of
2008. DTC holds a local sight in South Africa next week.


---U.S. Aug. Jewelry Price Index +10%

The consumer price index for jewelry during the month of August rose
10.3 percent to 154.73 points, according to statistics provided by BLS
(the Bureau of Labor Statistics.) This rate, based upon 100 points
from 1986, was nearly two points lower than July. When combining the
watches and jewelry categories, the year-to-year difference was an
increase of 9 percent in the United States.


---Hong Kong Show Recovers from Low Expectations

The Hong Kong Show experienced good demand for low color commercial
goods, but the high level big stone deals which have characterized the
show in the past were not hot. By most accounts, demand for high
quality (IF, VVS, VS) high color (D,E,F) large stones above 6 carats
was poor. In contrast, trading was brisk for low color commercial
goods ranging from 1 carat up to 3 carats with especially strong
demand for goods between 30 points and 90 points. In addition, fancy
shapes in low colors did well.


---Letseng Diamond Mine Produces 478ct Stone

Gem Diamonds recovered a 478-carat type II D color diamond which they
say has the potential to yield one of the largest flawless D-color
round polished diamonds in history. The diamond was recovered on
September 8, and sent to Antwerp for analysis. Letseng has become the
premier diamond mine consistently producing high value gem quality
stones since it was reopened in 2004 and acquired by Gem Diamonds in
2006. The mine has produced four of the world’s 20 largest rough
diamonds.


---Rapaport News Broadcast

Martin Rapaport shares comments on trading from the Hong Kong Show and
discusses the importance of integrating luxury and investment diamond
demand as financial crisis grips the credit markets.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23449



RETAIL & WHOLESALE NEWS:

---Star Brillian Reports $235K Diamond Theft by Korean National

Diamond manufacturer Star Brillian reported that a 3.2 carat GIA
certified diamond valued at $234,856.20 (INR 1.02 million) was stolen
from its office in Mumbai, India by a South Korean man named Seo
Byung. Star Brillian management filed a complaint with the police
stating that Seo Byung visited its offices to buy diamonds. Seo Byung
finalized a purchase and gave back the packet with the diamond for
export, which Star Brillian was to ship once payment was made. Since
payment was not deposited with Star, management attempted to contact
Seo Byung, but found that he'd left India. Management opened the
packet and found that the original diamond was gone. The original
details of the stone are: Round brilliant D color, IF clarity,
weighing 3.20 carats with GIA certificate No. GIA REPORT 16851075.


---Blue Nile: Weaker Demand for Solitaires as Consumers Cut Back on
Bridal

Blue Nile Inc. CEO Diane Irvine contended that trends underway
included a shift (downsize) in bridal purchases. Consumers were
trading from solitaires to diamond bands on their website,
representing an average price difference from about $6,000 to $3,000.
Consumers were also switching from platinum to white gold. While there
was no statistical evidence suggesting a slow-down in wedding or
engagement planning due to the economy, Blue Nile chairman Mark Vadon
said that anecdotal data suggested a weakening market due to very
tight consumer credit and economic worries.

Also this week, Blue Nile partnered with Bill Me Later Inc. to give
online shoppers an alternative choice to purchasing diamonds. Bill Me
Later enables consumers to shop online without using a credit card.
Blue Nile is offering a "no payment" for 90 days offer for purchases
of more than $250. Bill Me Later charges and an annual percentage rate
of 19.99 percent on the purchase.


---China: FUQI Int'l Opens Branded Jewelry Counters

FUQI International expanded its retail presence across the Beijing and
Shanghai markets by opening branded jewelry counters in department
stores. Counters were described as ranging from 330 to 550 square feet
and hosted some 2,000 SKUs. FUQI expects to open two more counters
before November. The company also opened one Temix jewelry counter in
Shanghai -- one more is planned and two are planned for Beijing.


---Charles & Colvard 4Q Inventory Adequate, Delays $710K Purchase
Commitment

Charles & Colvard Ltd., the sole source of moissanite, suspended the
commitment to purchase silicon carbide inventory in the amount of
$710,000 during the fourth quarter from Cree Inc., its primary
supplier. Charles & Colvard claimed it has adequate inventory on hand
to meet sales demand.


---Dynamix Jewelry Group to Acquire JewelAmerica

The Dynamix Jewelry Group plans to acquire all of JewelAmerica Inc. in
a transaction being completed next month. Dynamix has been expanding
its jewelry interests over the years and believes the time is now
right to integrate JewelAmerica with its other global business
interests.


---Tiffany to Open in Berlin

Tiffany & Co. plans to open an approximately 1,670-square-foot
boutique in Berlin's KaDeWe department store, in October of 2008.
KaDeWe, Germany's premier destination for luxury shopping, is located
at Tauentzienstrasse 21-24, in the city's most fashionable shopping
area. Berlin will be the jeweler's fifth location in Germany. Tiffany
also operates stores in Munich, Frankfurt and Hamburg. A store in
Dusseldorf is scheduled to open later this month.


---Christie's Dubai 'Jewels & Watches' Sale Takes Place Oct. 29

Christie’s auction, Jewels and Watches -- The Dubai Sale, takes place
at the Jumeirah Emirates Towers Hotel on October 29, 2008 at 7 p.m.
The sale will include jewelry from leading contemporary designers,
natural pearls, rare vintage Cartier, and antique Indian jewels. The
sale is expected to realize between $20 million and $25 million. The
Dubai sale includes 12 lots of fine diamond jewelry from an important
private European collection with a combined estimate of $6 million to
$8 million. The largest diamond in the sale is a radiant-cut 57.02
carat fancy intense yellow diamond ring (estimate: $2 million to $2.5
million.) A classic 1940s diamond bracelet by Cartier is also included
with an estimate of $300,000 to $350,000.



WHO IS NEWS:

---S. Africa: CEO Chikane Leaves State Diamond Trader

Abbey Chikane has left his position as chief executive officer of
South Africa’s State Diamond Trader (SDT) after his contract expired
at the end of August. SDT chairperson Linda Makatini confirmed that
Chikane’s contract had ended and would not be renewed as it had been a
12-month fixed-term contract running through the provisional rights
period in which the trader could operate.


---Gitanjali Group Appoints New Pres. of HR Function

The Gitanjali Group appointed Mr. C. Subramaniam as the group
president of human resources. Subramaniam has eighteen years of
experience within the human relations function. He added that he was
excited to take on the task of leading the function at a time when
India's economy is booming. "I am confident that all together we will
write yet another page of the success story of the Gitanjali Group."


---Diamond Cutter Wanted in Four States, Australia Requests the Man's
Fingerprints

Moshe Tsitsaushivili, a diamond cutter charged with stealing diamonds
from a jeweler in Yorktown Heights, New York, in 1989 is also a
suspect in similar thefts across four other states. Tsitsaushivili,
41, is alleged to have worked for various jewelers, for little or no
pay in order to prove himself, but would make off with a diamond (or
diamonds) during a lunch break and never return. Authorities in New
South Wales, Australia, recently requested photos of Tsitsaushivili
and copies of his fingerprints to investigate a $1.3 million jewel
heist dating back to 1999. He is being held on a felony larceny charge
in Westchester County after being caught by border patrol crossing
into New York from Canada this past week with a fake passport from
Israel. Warrants for his arrest have also been issued in Maryland, New
Jersey, Pennsylvania, and Ohio.


---Detroit: Jeweler Faces Money Laundering Charges

A 32-year-old Southfield jeweler was arrested for money laundering in
which involved more than $1.5 million in cash for drug dealers. Gary
Yee was arrested after agents from the Drug Enforcement Agency and IRS
Criminal Investigation executed search warrants at the homes of him
and his mother. Authorities said he was arrested after an undercover
operation during which agents posed as marijuana dealers.



GENERAL NEWS:

---Zimbabwe: Governor Seeks to Curb Diamond Looting

The newly-appointed governor of Manicaland, Zimbabwe, Christopher
Mushohwe met with law enforcement this week to discuss ways in which
to curb diamond looting. The government contends foreign nationals
continue to take diamonds from the Chiadzwa area.


---Botswana Introduces Vocational Training Tax

The government of Botswana has introduced a new vocational training
tax, which will likely impact diamond businesses in the country. Tax
has been set at a rate of 0.2 percent for businesses with a turnover
of between BWP 250,000 and BWP 2 billion (about $37,000 to $294
million,) and at 0.05 percent if turnover exceeds BWP 2 billion.
Employers with a turnover of less than BWP 250,000 will be exempt from
the fee. The tax will take effect on October 1, 2008.


---Antwerp Diamantaires Sue Fund for Worker’s Social Benefits

Some 18 Antwerp-based diamantaires have launched a lawsuit against
Belgium’s Intern Compensation Fund for a newly introduced taxation
scheme designed to reimburse the social benefits for workers of
diamond manufacturers. According to a letter sent by the Belgium
Polished Diamond Dealers Association (BVGD) to its members, the
industry is claiming the fund collected about EUR 4.7 million in 2007
but spent only EUR 1.7 million. BVGD president Andre Gumuchdjian
explained that the fund was not supposed to accumulate funds above EUR
800,000 and that the individual diamantaires were suing to get their
money back.


---DDE Sept. Tender to Include Diamonds Up to 20 Carats

The Dubai Diamond Exchange (DDE) will include 10-to-20 carat stones in
its September ‘rough diamond sales week.’ The tender, held in
partnership with Global Diamond Tenders DMCC, will take place
September 28-30, 2008, on DDE’s premises, and will include goods from
Australia, South Africa, and Lesotho. The tender will consist of goods
totaling approximately 95,000 carats with stones ranging in size from
small goods up to single stones of 20 carats each, DDE explained.


---IGI Expands Israeli Presence

IGI opened its newest full-service gemological laboratory in Ramat
Gan, Israel. IGI has had a presence in Israel for eight years through
its Diamond Window Service. IGI opted to open a full-service
gem-testing laboratory in Ramat Gan located in the Yahalom Building.


---Jewelers Mutual Adds Employment Practices Liability Insurance to
Product Portfolio

In response to the rising number of employment practices claims and
awards, Jewelers Mutual Insurance Company added Employment Practices
Liability Insurance (EPLI) to its product portfolio for businesses in
the United States. Available as an endorsement to the company’s
Businessowners Policy, EPLI covers claims resulting from
employment-related offenses such as work-related harassment, including
sexual harassment; wrongful termination, including retaliatory or
constructive discharge; wrongful failure to hire, promote or grant
tenure; intentional infliction of emotional distress; and more.
Coverage limits range from $100,000 to $1 million each claim/policy
aggregate.



DIAMOND MINING NEWS:

---Petra Diamonds Posts Profit for FY08; Disposes of Polishing Works

Petra Diamonds posted its first-ever profit, and sold its cutting and
polishing operations. Petra fiscal year net profits were $1.9 million,
compared with a loss of $20.9 million in fiscal 2007. Revenues grew
352 percent to $76.9 million for the year, and Petra recovered 200,287
carats of diamonds spurred by the first full year of production from
the Koffiefontein mine, which the company gained control from De Beers
in July 2007.

The company reported that it achieved stable prices at its most recent
tender in July; Petra’s first in fiscal 2009, where it sold 99,827
carats for $23.19 million, or $232 per carat. The tender included
66,127 carats of diamonds from Cullinan for the first time, which sold
for $6.6 million, or $100 a carat. Koffiefontein diamonds achieved an
average price of $460 per carat and the fissure mines sold for an
average $529 per carat.


---ALROSA Profits Expected to Fall 27% in 2008

ALROSA expects to post a profit of RUB 10.28 billion (about $411.67
million) in 2008, which would represent a decline of 27 percent from
2007 figures. Performance targets “reflect the current economic
situation,” and production costs have risen with increased costs of
fuel, materials, machinery, and labor, and higher prospecting and
exploration expenses.


---Bristow States Why Rockwell Shareholders Should Reject Offer

Pala Investments Holdings Limited amended its all-cash offer to
shareholders of Rockwell Diamonds Inc. Pala waived the due diligence
condition, which required that Pala be granted access to information
concerning Rockwell, including access to its management, by September
24, 2008. Rockwell's board has recommended shareholders not tender
their shares to Pala. Rockwell president and CEO John Bristow explains
why in this MP3 audio file:

http://www.diamonds.net/news/Files/Docs/2008/9/25/rockwell.mp3


---African Diamonds Ends Dispute With De Beers Over Botswana Mine

African Diamonds deferred its court dispute with De Beers over the
AK06 mine in Botswana, after the government rejected De Beers’
application for a retention license to delay development of the
project. African Diamonds, which owns 28.38 percent in AK06 with De
Beers holding 71 percent, said Monday that it had been informed by
Botswana’s director of mines that the “retention license applied for
by De Beers was not considered and in his view was not formally
lodged, as a mining license application was still pending.”

As a result, negotiations for a mining license for AK06 continue and
are pegged to be complete by the end of September. A rift between De
Beers and African Diamonds developed in July over the project as De
Beers cited potential power issues meant it was not economically
viable to develop the mine, and sought to delay it by two years. The
two also disagreed on the potential marketing of diamonds from AK06.


---Patrician Diamonds Seeks Share Consolidation, Name Change

Junior explorer Patrician Diamonds Inc. proposed to shareholders a 1
for 10 share consolidation and a corporate name change to Diamond
Exploration Inc. Patrician operates projects in Doctor Lake, Northwest
Territories and Borden, Baffin Island, Nunavut. Exploration on both
projects has previously found diamonds. Patrician expects to conduct
additional drilling and other major exploration in 2009. Patrician is
also currently developing a significant new project for early 2009
field work.



ECON WATCH:


For week ending September 18, 2008


Sept 25 Sept 18 Chng

$1 = Euro 0.684 0.697 -0.013
$1 = Rupee 46.0 46.2 -0.2
$1 = Israel Shekel 3.41 3.53 -0.12
$1 = Rand 8.12 8.18 -0.07
$1 = Canada Dollar 1.03 1.06 -0.03


Precious Metals

Sept 25 Sept 18 Chng

Gold $877.50 $853.00 $24.50
Platinum $1,171.00 $1,088.00 $83.00



Stock Indexes

Sept 25 Sept 18 Chng Chng%

BSE 13,547.18 13,315.60 231.58 1.74%
Dow Jones Avg. 11,022.06 11,019.69 2.37 0.02%
FTSE 5,197.02 4,880.00 317.02 6.50%
Hang Seng 18,934.43 17,632.46 1,301.97 7.38%
S & P 500 1,209.18 1,206.51 2.67 0.22%
Yahoo! Jewelry Index 1,096.24 1,156.38 -60.14 -5.20%

USA
Abazias $0.70 $1.40 -$0.70 -50.00%
Birks & Mayors $1.76 $2.08 -$0.32 -15.38%
Blue Nile $46.28 $49.25 -$2.97 -6.03%
Charles & Colvard $0.53 $0.49 $0.04 8.16%
Collector's Universe $7.00 $7.28 -$0.28 -3.85%
DGSE Companies, Inc. $2.55 $2.52 $0.03 1.19%
Fuqi International $8.61 $8.92 -$0.31 -3.48%
JCPenney $35.90 $38.99 -$3.09 -7.93%
Kohl's $47.90 $51.08 -$3.18 -6.23%
Lazare Kaplan $7.43 $7.80 -$0.37 -4.74%
LJ International $1.16 $1.04 $0.12 11.54%
Macy's $18.90 $19.91 -$1.01 -5.07%
Man Sang $3.50 $3.07 $0.43 14.01%
Movado Group $23.76 $23.23 $0.53 2.28%
Nordstrom $29.51 $33.54 -$4.03 -12.02%
Saks $9.17 $10.80 -$1.63 -15.09%
Signet $23.95 $23.23 $0.72 3.10%
Sotheby's $20.28 $20.79 -$0.51 -2.45%
Tiffany $36.76 $38.22 -$1.46 -3.82%
Wal-Mart $60.12 $61.48 -$1.36 -2.21%
Zale $24.92 $28.15 -$3.23 -11.47%

EUROPE
Bulgari €6.46 €6.31 €0.15 2.38%
Citizen Holdings €4.80 €5.19 -€0.39 -7.51%
Esa €9.66 €10.09 -€0.43 -4.26%
Golay-Buchel CHF 2,349.00 CHF 2,349.00 CHF 0.00 0.00%
LVMH €65.00 €64.40 €0.60 0.93%
Pinault P-R SA €68.35 €69.12 -€0.77 -1.11%
Richemont SA CHF 52.80 CHF 53.70 -CHF 0.90 -1.68%
Sakha Diamonds €0.28 €0.27 €0.01 3.65%
Swatch Group CHF 214.30 CHF 211.80 CHF 2.50 1.18%
Theo Fennell (pence) 45.00 46.00 -€1.00 -2.17%

HONG KONG
Hang HKD 1.62 HKD 1.64 -HKD 0.02 -1.22%
King Fook HKD 0.54 HKD 0.57 -HKD 0.03 -5.26%
Noble Jewelry HKD 0.82 HKD 0.82 HKD 0.00 0.00%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 35.45 34.30 1.15 3.35%
Gitanjali Gems 193.80 209.70 -15.90 -7.58%
Rajesh Exports 34.40 35.10 -0.70 -1.99%
Reliance 2,025.00 1,932.85 92.15 4.77%
Su-Raj Diamonds 47.35 47.45 -0.10 -0.21%
Titan 1,119.50 1,109.70 9.80 0.88%
Zodiac JRD 21.10 22.05 -0.95 -4.31%
Shantivijay Jewels 165.00 168.75 -3.75 -2.22%
Shukra Jewellery 3.69 3.20 0.49 15.31%
Suashish Diamonds 433.90 431.95 1.95 0.45%

NEW ZEALAND
Michael Hill NZD 0.76 NZD 0.75 NZD 0.01 1.33%

SINGAPORE
Gems TV Holdings SGD 0.110 SGD 0.110 SGD 0.000 0.00%
Sarin Technologies SGD 0.290 SGD 0.280 SGD 0.010 3.57%

Dobrý večer Grofik, ty jsi se tedy rozjel.....

Ahoj Míša,som tu neobmedzeným vládcom a pánom.

...to určitě ano,....škoda,že neumím anglicky,určitě je to velmi zajímavé..

Míša nič moc,ale pre info týždenné obraty nákupu a predaja tej top 100vky vo svete.

Kurz vo svete atď..... krádeže vo svete ,investície ,ale nie je to bulvár.

Rapaport TradeWire - Friday, October 3, 2008

NEWS: Diamond prices coming under increasing pressure as global
economic situation worsens. Sellers are trying to maintain price
levels as trading volume fall and liquidity concerns mount. ABN AMRO’s
diamond division is up for sale with few takers. Everyone is worried
or should be. Indian polished trade weakens and rough demand slows as
outlook for holiday season dims. De Beers DTC Sept. sight estimated at
$600 mil. Collectors Universe posts $13 million loss for 4Q. Cartier
opens flagship store in Seoul. Bulgari opens in Paris. Vasant Mehta
elected chair of India’s GJEPC. Rapaport offices will be closed on
Thursday Oct. 9 due to Yom Kippur. We wish everyone a happy, healthy,
peaceful and prosperous Jewish New Year.



RETAIL QUOTE:

“Recession in the major retail diamond markets will ripple back to the
cutting centers and will almost certainly lead to weaker prices for
rough and polished diamonds…The party is over for diamonds, at least
for the next two years.”

---Des Kilalea, RBC Capital Markets




WORLD NEWS:

---U.S. Aug. Consumer Spending Flat

The U.S. Commerce Department reported that consumer spending in August
was unchanged from July. Personal spending accounts for roughly 70
percent of economic activity. While nondurable goods and services
sales fell, motor vehicle and parts rose to offset the difference.
Consumer spending was the weakest since February. Personal incomes,
adjusted to remove price changes, fell 0.9 percent in August, compared
with a decrease of 1.5 percent in July.


---RBC Forecasts Weaker Diamond Prices, Consumer Demand

RBC Capital Markets expects polished and rough diamond prices to
weaken as the economic slowdown in the United States and Europe
impacts jewelry demand. RBC said demand for diamonds by the jewelry
trade was starting to slow as the U.S., Europe, and Japan, where
consumer disposable income was being squeezed and jobs have been lost.
RBC found that U.S. consumer confidence fell more than 50 percent
January 2006 and June 2008 due to growing uncertainty in financial
markets.


---Fortis Plans Sale of ABN Amro Diamond Unit

Fortis Bank is planning to sell its ABN Amro Diamond Bank subsidiary.
Fortis announced on Monday that the governments of Belgium, the
Netherlands and Luxembourg had agreed to invest EUR 11.2 billion in a
bailout deal to prevent a run on the bank. Fortis provides an
estimated $3 billion of credit to the diamond industry through its ABN
Amro subsidiary, according to RBC Capital Markets, which said
widespread bank debt in the cutting centers may result in liquidity
drying up.


---U.S. Burmese Rubies, Jadeite Regulations Now Apply

Effective September 29, the “Tom Lantos Block Burmese JADE Act of
2008” took effect. Jadeite and rubies from Myanmar cannot be imported
into the United States. This encompasses all jadeite and rubies from
third-party countries as long as these originated in Myanmar. U.S.
Customs and Border Protection have issued new Harmonized Tariff System
codes for all non-Burmese rubies and jadeite imported into the U.S.
The importation ban does not apply to jadeite or rubies that are
imported for personal use, meaning for personal wear by the importer.
Further, the bill does not address U.S. sales of any inventory of
Burmese jadeite or rubies currently in the U.S.


---GJEPC Elects Mehta Chairman

Vasant Mehta was elected as the chairman of the Gem & Jewellery Export
Promotion Council (GJEPC.) Mehta will take on the responsibilities
from Sanjay Kothari, who has completed his two-year term (2006-200
as chairman. Rajiv Jain, who was chairman of the Jaipur region, has
assumed the post of vice chairman of Council. They will hold office
for a period of two years from 2008 to 2010.


---Rapaport Videos

Martin Rapaport discusses the financial crisis in his Jewish New Year
message to the industry.

http://www.diamonds.net/News/NewsItem.aspx?ArticleID=23460

Rapaport Weekly Broadcast touches upon Zales' new Z-Trends push for
sales and Rockwell Diamonds' 212ct yellow diamond at Sotheby's Hong
Kong.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23527



DIAMOND STATS:

---Japan’s Polished Diamond Imports -25% in Aug.

Japan’s polished diamond imports fell 25.4 percent to $45.88 million
in August. Japan’s imports by volume remained flat compared with
August 2007 at 177,232 carats. The average price fell 25 percent to
$259 per carat. Imports from India, Japan’s largest source of polished
diamonds, dropped 39.5 percent to $22.67 million, while from Hong Kong
they rose 137 percent to $7.36 million. Imports from Israel and
Belgium rose 28 percent and 8 percent respectively. Polished diamond
imports for the first eight months of the year declined 9.9 percent to
$536.17 million. By volume, imports increased 5.2 percent to 1.58
million carats, while average prices have fallen 14 percent to $339
per carat.



RETAIL & WHOLESALE NEWS:

---Collectors Universe Posts $13M Loss in 4Q Fiscal 2008

Collectors Universe, the parent company of parent company of GCAL and
AGL grading services, posted a net loss of $13.1 million in the fourth
quarter, compared with a loss of $840,000 one year ago. Net revenues
grew 3.6 percent to $10.3 million boosted by its jewelry grading
business.


---Harrods Reports Double Digit Growth for Jewelry

For its fiscal year, ending February 2, 2008, retailer Harrods group
revenue rose 13 percent to GBP688 million ($1.2 billion.) Jewelry,
accessories, women's clothing, and furniture increased by double
digits the company reported. Sales since the fiscal year ended have
remained strong; the retailer contended but did not cite examples.


---Sotheby’s New York Jewelry Auction Garners $13M

Sotheby’s generated $13.13 million at its Important Jewels sale held
in New York on September 25, and saw it as a sign that the jewelry
auction market had so far bucked the current difficult economic
conditions. The auction sold 77.6 percent by lot, out of 452 lots on
offer, and 79.4 percent by value. The top selling lot was a ring by
Van Cleef & Arpels with an emerald-cut sapphire weighing 25.25 carats,
flanked by two pear shaped diamonds, mounted in platinum. The ring
sold for $656,500, almost double its pre-auction estimated value to an
anonymous buyer.


---Hong Kong Aug. Jewelry Sales +2%

Retail sales across Hong Kong rose 10.4 percent in August to HKD22.8
billion ($2.9 billion.) By volume, sales rose 4 percent. The
government was pleased with the figures as it was assumed many Chinese
would stay home during the two-week run of the Olympic Games. The
jewelry category rose 2.4 percent.


---Bulgari Opens in Paris

Bulgari opened a new store in Paris at the corner of Avenue George V
and Rue Francois 1er. The luxury retailer's CEO Francesco Trapani
called Paris a lucrative market not just because of the French
clientele, but also the hordes of tourists and the presence of major
flagship boutiques.


---Cartier Opens in Seoul

Cartier opened its first store in the fashionable Cheongdam-dong
district in southern Seoul. French architect David-Pierre Jalicon
designed the boutique that was inspired by the Korean wrapping cloth
or bojagi. Cartier decided the timing was right to open in Seoul as
the luxury market is growing rapidly in the South Korean capital.


---Neiman Marcus Braces for Huge Downshift in Wall Street Bonuses

Neiman Marcus Inc. said this past week that its fiscal fourth-quarter
loss more than doubled from a year ago. Historically huge Wall Street
bonuses ($33.2 billion in 2007,) which mean everything to New York
luxury retailers in December, are expected to be a fraction of what
they were.



GENERAL NEWS:

---Indo Argyle Diamond Council to Close After 15 Years

The Indo Argyle Diamond Council (IADC) program will close in December.
The program was developed to raise awareness in the United States
about the jewelry manufacturing potential in India and its ability to
manufacture high-quality, sellable diamond jewelry to reach price
points from the high-end to mass market. The program was cited as
helping to increase jewelry exports from India to the U.S., from
around $300 million in 1994 to $2.3 billion in 2007.


---LBMA Expects Gold Prices to Remain High

The financial crisis on Wall Street and tight credit will keep gold
prices high, according to Jeremy Charles, chairman of the London
Bullion Market Association (LBMA.) Charles said gold holds true as a
safe-haven asset. Since gold hit a record at $1,032oz. in March, the
metal has experienced wide swings in demand as investors switch from
gold to dollar investments and back again depending upon the
confidence in the currency at any given time. The gold sell-off from
April through July was primarily due to the improved outlook for the
dollar and lower oil and commodity prices, Charles said. But new
demand has been so strong that global supply of gold bars has been
playing catch-up this month.



DIAMOND MINING NEWS:

---DiamondCorp Loss Widens 7% in 1H

DiamondCorp reported a net loss of GBP 1.34 million ($2.36 million) in
the first half of 2008, which was 7 percent deeper than the loss one
year ago. The diamond mining and exploration company had revenues of
GBP 578,847 ($1.17 million) for the period ending June 30, 2008, from
19,214 carats of diamonds sold at tender in Johannesburg for an
average price of $61 per carat. It had zero revenues in the comparable
period one year ago.


---Vaaldiam Plans $20M in Debt Financing

Vaaldiam Resources is planning to raise $20 million in debt financing
to fund further development of its Duas Barras mine in Brazil. Funds
raised will also be used to complete the feasibility study on the
Braúna kimberlite project, and for general working capital purposes.
The initiative follows a failed attempt to raise money from a rights
offering which expired on September 17. Vaaldiam has two operating
alluvial mines in Brazil, Duas Barras and Chapada, and exploration
projects in Brazil and Canada.


---Vancouver Group Agrees to Buy Tahera Diamond Corp

A group of Vancouver resource developers has agreed to buy troubled
diamond mining company Tahera Diamond Corporation, owner of the
Jericho mine in Canada’s Nunavut province. Tahera claims an unnamed
privately owned company signed a ‘plan sponsorship agreement' with
Tahera in a cash deal to acquire 100 percent of the miner’s equity and
help pay its creditors. The undisclosed amount being paid by the group
(plan sponsor) is insufficient to pay all of the claims of creditors
of the company in full, Tahera added.


---De Beers Maintains 2011 Launch Goal For Botswana Mine

De Beers is in the final stages regarding development of the AK06 mine
and remains hopeful for mining in 2011. De Beers holds a 71 percent
stake in the Boteti joint venture, which owns the AK6 project, with
junior partner African Diamonds owning a 28 percent interest and Wati,
a private Botswana-based company, the remaining 1 percent. The two
larger stakeholders have been in dispute regarding work on the project
after African Diamonds accused De Beers of delaying development of the
mine. While African Diamonds stated it was in favor of building the
mine “as quickly as possible,” De Beers claimed it was not economical
to develop a mine while Botswana was experiencing power shortages,
expected to continue through 2009 and 2010.



ECON WATCH:


For week ending October 2, 2008

Oct 2 Sept 25 Chng

$1 = Euro 0.725 0.684 0.041
$1 = Rupee 47.6 46.0 1.6
$1 = Israel Shekel 3.46 3.41 0.05
$1 = Rand 8.52 8.12 0.40
$1 = Canadian Dollar 1.08 1.03 0.04


Precious Metals

Oct 2 Sept 25 Chng

Gold $836.80 $877.50 -$40.70
Platinum $980.00 $1,171.00 -$191.00


Stock Indexes
Oct 2 Sept 25 Chng Chng%

BSE 13,055.67 13,547.18 -491.51 -3.63%
Dow Jones Avg. 10,482.85 11,022.06 -539.21 -4.89%
FTSE 4,870.34 5,197.02 -326.68 -6.29%
Hang Seng 18,211.11 18,934.43 -723.32 -3.82%
S & P 500 1,114.28 1,209.18 -94.90 -7.85%
Yahoo! Jewelry Index 1,001.21 1,096.24 -95.03 -8.67%

USA
Abazias $1.40 $0.70 $0.70 100.00%
Birks & Mayors $1.30 $1.76 -$0.46 -26.14%
Blue Nile $39.62 $46.28 -$6.66 -14.39%
Charles & Colvard $0.49 $0.53 -$0.04 -7.55%
Collector's Universe $6.56 $7.00 -$0.44 -6.29%
DGSE Companies, Inc. $2.40 $2.55 -$0.15 -5.88%
Fuqi International $8.32 $8.61 -$0.29 -3.37%
JCPenney $32.80 $35.90 -$3.10 -8.64%
Kohl's $42.39 $47.90 -$5.51 -11.50%
Lazare Kaplan $7.43 $7.43 $0.00 0.00%
LJ International $0.97 $1.16 -$0.19 -16.37%
Macy's $16.21 $18.90 -$2.69 -14.23%
Man Sang $3.20 $3.50 -$0.30 -8.57%
Movado Group $20.08 $23.76 -$3.68 -15.49%
Nordstrom $25.39 $29.51 -$4.12 -13.96%
Saks $8.56 $9.17 -$0.61 -6.65%
Signet $20.08 $23.95 -$3.87 -16.16%
Sotheby's $18.01 $20.28 -$2.27 -11.19%
Tiffany $33.67 $36.76 -$3.09 -8.41%
Wal-Mart $58.85 $60.12 -$1.27 -2.11%
Zale $24.08 $24.92 -$0.84 -3.37%

EUROPE
Bulgari €6.11 €6.46 -€0.35 -5.42%
Citizen Holdings €4.99 €4.80 €0.19 3.96%
Esa €8.08 €9.66 -€1.58 -16.36%
Golay-Buchel CHF 2,170.00 CHF 2,349.00 -CHF 179.00 -7.62%
LVMH €60.37 €65.00 -€4.64 -7.13%
Pinault P-R SA €60.91 €68.35 -€7.44 -10.89%
Richemont SA CHF 49.04 CHF 52.80 -CHF 3.76 -7.12%
Sakha Diamonds €0.27 €0.28 -€0.01 -3.87%
Swatch Group CHF 194.70 CHF 214.30 -CHF 19.60 -9.15%
Theo Fennell (pence) 45.00 45.00 €0.00 0.00%

HONG KONG
Hang HKD 0.65 HKD 1.62 -HKD 0.97 -59.88%
King Fook HKD 0.55 HKD 0.54 HKD 0.01 1.85%
Noble Jewelry HKD 0.72 HKD 0.82 -HKD 0.10 -12.20%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 32.80 35.45 -2.65 -7.48%
Gitanjali Gems 188.70 193.80 -5.10 -2.63%
Rajesh Exports 28.30 34.40 -6.10 -17.73%
Ren. Jewellery 35.40 37.75 -2.35 -6.23%
Su-Raj Diamonds 46.45 47.35 -0.90 -1.90%
Titan 1,118.85 1,119.50 -0.65 -0.06%
Zodiac JRD 20.00 21.10 -1.10 -5.21%
Shantivijay Jewels 157.00 165.00 -8.00 -4.85%
Shukra Jewellery 3.88 3.69 0.19 5.15%
Suashish Diamonds 395.25 433.90 -38.65 -8.91%

NEW ZEALAND
Michael Hill NZD 0.77 NZD 0.76 NZD 0.01 1.32%

SINGAPORE
Gems TV Holdings SGD 0.110 SGD 0.110 SGD 0.000 0.00%
Sarin Technologies SGD 0.280 SGD 0.290 -SGD 0.010 -3.45%



MINING STOCKS

(pence unless noted)

Oct 2 Sept 25 Chng Chng%
USA
Anglo American $14.53 $18.98 -$4.45 -23.45%

CANADA
Archangel CAD 0.36 CAD 0.40 -CAD 0.04 -10.00%
Harry Winston CAD 13.01 CAD 16.69 -CAD 3.68 -22.05%
Mountain Province CAD 3.02 CAD 3.65 -CAD 0.63 -17.26%
Peregrine Diamonds CAD 0.36 CAD 0.44 -CAD 0.08 -18.18%
Rockwell Diamonds CAD 0.32 CAD 0.34 -CAD 0.02 -5.97%
Shore Gold CAD 1.07 CAD 1.09 -CAD 0.02 -1.83%
Stornoway Diamond CAD 0.17 CAD 0.22 -CAD 0.05 -22.73%
True North Gems CAD 0.15 CAD 0.16 -CAD 0.02 -9.38%

UK (pence)
African Diamonds 50.0 54.8 -4.8 -8.68%
BHP Billiton 1,121.0 1,440.0 -319.0 -22.15%
Firestone Diamonds 48.1 50.0 -1.9 -3.80%
Gem Diamonds 540.5 723.0 -182.5 -25.24%
Mano River 6.3 7.0 -0.7 -10.00%
Mwana Africa 15.5 19.3 -3.8 -19.48%
Namakwa Diamonds 98.0 100.0 -2.0 -2.00%
Petra Diamonds 97.5 104.0 -6.5 -6.25%
Rio Tinto plc 3,210.00 3,940.00 -730.0 -18.53%

Rapaport TradeWire - Friday, October 10, 2008


News: Diamond prices under increasing pressure as global economic situation worsens. Premiums for big stones coming down with almost no trading as sellers refuse low offers and shocking financial market conditions create extreme uncertainty. Plummeting stock markets and severe credit crunch reducing luxury demand. MasterCard reports 8% plunge in U.S. Sept. consumer retail activity. Indian market softening with some local demand for better goods but severe oversupply and few orders for lower quality U.S. commercial goods. Rupee plummets to six year low of 48.5/$. Gold surging but highly volatile at prices over $900/ounce. The Rapaport Price List will not be published Oct. 17 due to Jewish Holiday of Sukot. Special market and RapNet price updates will be available on our website. Offices will be closed October 14-15 and 21-22 due to the holiday.



RETAIL QUOTE:

"[With business down 50%] I'm going to have a poor Christmas and I know it. Twenty years, and I never said that before. Christmas was always gravy for me. Now I need Christmas just to bail me out."

---Matthew Sulby, Unclaimed Diamonds in Philadelphia



WORLD NEWS:



---Gov't Equity Stake in Fortis a Positive Step Towards Stability

ABN Amro’s diamond and jewelry business is confident it will continue activity following the Dutch government’s recent acquisition of Fortis. The government’s equity stake is a positive step in terms of stability for ABN Amro clients and staff and provides the necessary financial stability and solvency. "It also makes us less vulnerable to the credit crisis,” said Victor Van der Kwast, CEO of ABN Amro International Diamond and Jewelry Group. “We can continue our efforts and development path and the new government backing underpins our business.”

“We are not calling loans or pulling any clients lines though manage our business carefully,” he said. “We are trying as best we can to keep liquidity managed in a logical way and are quite selective in our choice of clients we can and do want to do business with,” he said.


---IMF Sees U.S. Economic Growth Falling Flat in 2009

The International Monetary Fund (IMF) predicted the United States would become the epicenter of the world's financial meltdown as the group further lowered expectations for world economic growth in 2009. The IMF predicted that the economy in the United States, which grew 2 percent in 2007, would clock-in closer to 1.5 percent this year, and fall flat in 2009. The world economy, due to the United States' financial crisis, is now entering a major downturn in the face of the most "dangerous shock in mature financial markets since the 1930s." It predicts that the global economy would slow to a growth of 3.9 percent in 2008, down from 5 percent in 2007, and grow only by 3 percent in 2009.

Earlier, financial services firm UBS lowered its global growth forecast for 2009 from 2.8 percent to 2.2 percent indicating that the world economy is slipping into recession following the path of the United States. The revised forecast brings the expected growth rate below the 2.5 percent level, which UBS believes to be consistent with global recession conditions. U.S. economic growth was revised from 1.2 percent to 0.3 percent anticipating three consecutive quarters of negative growth starting in third quarter 2008.

Both IMF and UBS contended that emerging markets would avoid a recession. They expect growth in China and India of between 8 percent and 10 percent.


--- Bank of Israel Lowers Interest Rate, Improves Sector Confidence

The Bank of Israel (BOI) cut its interest rates by 0.5 percentage points on Tuesday in reaction to “the sharp increase in uncertainty in financial markets around the world and its implication for Israel’s financial markets.” The reduction brings the central bank’s prime lending rate to 3.75 percent. The local diamond industry welcomed the BOI's action.


---Rapaport Broadcast News

Tune in at 4:00 p.m. EDT Friday for a look at The Ponahalo diamonds, which are the leading items from Christie's Jewels the New York Sale. The two magnificent diamonds weigh approximately 102.11 carats and 70.87 carats and have been cut from a rough diamond of 316.15 carats. Once posted, the video will remain online for your viewing pleasure.


http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23607



DIAMOND STATS:

Israel Sept. 2008 Imports/ Exports (YTD=2008 Year to Date)



2008 %Chng YTD %Chng
($Mil) 2007 ($Mil) 2007

Polished Exports $663 1% $5,484 3%
Polished Imports $424 17% $3,508 16%
Net Polished $239 -18% $1,976 -15%

Rough Imports $343 -4% $3,956 8%
Rough Exports $256 1% $3,020 20%
Net Rough $88 -17% $935 -18%

Diamond Account $151 -19% $1,040 -11%



RETAIL & WHOLESALE NEWS:



---Full of Doubts U.S. Shoppers Cut Spending

In response to the falling value of their homes and high gasoline prices, consumers in the United States have become more frugal all year. But in recent weeks, as the financial crisis reverberated from Wall Street to Washington, consumers appear to have cut back sharply.

Saks Inc. same-store sales in September fell 10.9 percent, and total sales fell 11.1 percent to $273.2 million for five weeks ending October 4, 2008. Saks reported that the stronger categories were jewelry, fragrances, and cosmetics.

Neiman Marcus Inc. September sales fell 11.1 percent to $415 million, same store sales fell 13 percent to $406 million. In the five-week September period, comparable revenues in the specialty retail stores (Neiman Marcus Stores and Bergdorf Goodman,) decreased 15.8 percent.

Nordstrom Inc. estimated September sales at $718 million for the five-weeks ending October 4, 2008, which represented a 5.8 percent drop from one year ago. Same-store sales decreased 9.6 percent.

JCPenney Inc. same-store sales in September fell 12.4 percent and total sales fell 10.9 percent for the five weeks ending October 5, 2008, to $1.446 billion.

Discount retailers reported sales gains though: BJ's Wholesale Club Inc. experienced an 11.8 percent increase in sales during September to $892.8 million. Same-store sales rose 10.4 percent. Sales of jewelry and televisions fell about 3 percent and sales of food items rose 10 percent. Wal-Mart Stores Inc. reported same-store sales rose 2.4 percent and total sales rose 4.8 percent to $22.482 billion. Sam's Club sales rose 8 percent to $4.391 billion. Same-store sales at Sam's rose 4.6 percent during the five weeks ending October 3, 2008. Costco Wholesale Corp. September sales rose 10 percent to $6.67 billion and same-store sales rose 8 percent.


--- Sotheby’s HK Sale at $20M But 102ct Diamond Fails to Sell

Sotheby’s generated sales of $19.97 million (HKD 155.06 million) at its Magnificent Jewels & Jadeite auction in Hong Kong. The auction sold 49.5 percent by lot, out of 321 lots offered, and 32.5 percent by value. The pre-auction highlight, a 102.56 carat fancy vivid yellow diamond necklace, failed to sell and Sotheby’s said it would continue to seek a buyer privately.


---Wealth Survey Predicts 6% Drop in Christmas Gift Spending

American Express Publishing and the Harrison Group released the results of a poll taken two weeks ago and found almost 80 percent of the wealthy expect to spend the same or slightly more on Christmas gifts in 2008, but they were not looking at jewelry. The wealthy were cutting back on jewelry and fashion items, but wealthy consumers were continuing to spend. Overall the researchers found that the wealthy group, those earning more than $100,000 per year, plan to spend 6 percent less on gifts this year compared with Christmas 2007. More than six in 10 planned to buy fewer "big ticket items" and 83 percent said they'll wait for items to go on sale. Two percent said they have dropped luxury spending all together.


---Bidz.com Launches Arabic Language Website

Online jewelry seller Bidz.com launched a complete Arabic-language version of its online auction site. The company has also hired Arabic speaking marketing personnel to better assist this emerging marketplace of 400 million consumers.



GENERAL NEWS:



---Similar Descriptions Fit Suspect in Kay, JCPenney, Zale Robberies

Jewelry robberies at JCPenney and Zales in Lancaster, Pennsylvania, may have been related to one at a Kay Jewelers one week earlier. The two robberies on October 2 occurred less than one hour apart. JCPenney at Park City Center was robbed by a male using a handgun. Zales at the York Galleria mall was robbed by a man carrying a gun. One day earlier police reported a jewelry robbery at the Tanger Outlets' Kay Jewelers with a man threatening a clerk with a gun. The suspect is a white male of about 6 feet in height and shoulder-length hair.


---Sydney Jeweler Identifies Suspect Online

Christopher Gregory, the owner of Gregory Jewellers in Australia, said that Moshe Tsitsaushivili was the suspect in a $1.5 million diamond theft in December 1997. Gregory said he recognized Tsitsaushivili’s photograph distributed on the Internet following the diamond cutter's arrest in Westchester County, New York, two weeks ago. Tsitsaushivili faces a grand larceny charge in New York for stealing diamonds from a Yorktown Heights jeweler in 1989. Gregory said that he'd hired Tsitsaushivili to perform invisible diamond setting, but it was on the setter's second day at work when he allegedly opened a safe and walked out of the shop with two boxes of polished white diamonds. Tsitsaushivili admitted to a Westchester newspaper that he'd taken the diamonds in Yorktown, but the suspect did not respond to the claim from Australia.


---India: A New Polishing Center

The central Indian state of Chhattisgarh plans to invest some $37 million in a gem and jewelry park within the next two years in its new state capital. The state set aside Rs. 1.7 billion to develop a state-of-the art diamond cutting and polishing center on 28.32 acres of territory in the city of Naya Raipur. They expect to create an estimated 5,000 jobs in addition to indirectly employing 20,000 in the area.


---Atlanta Jewelry Show Adds Four New Designers

The Atlanta Contemporary Jewelry Show (ACJS) added four jewelry designers to the roster of artists exhibiting at its second annual event including Marcia Macdonald, Chihiro Makio, Steve Midgett, and Jerry Scavezze. The show runs November 7-8, 2008, at the Defoor Centre in Atlanta, Georgia. The show features artists from 13 states and many of the artists will debut special collections.


---AGS Opens 2009 Conclave to Non-member Retailers

The American Gem Society will celebrate its 75th anniversary in 2009 by opening its annual membership gathering, the American Gem Society Conclave, to non-member retailers for the first time. The conclave, which is scheduled for April 1-4, 2009, will be held at the Hyatt Regency Chicago hotel.


---NCDIA Reminds Consumers to Inspect for Natural Color Diamonds

Consumers are taking notice of natural color diamonds in fine jewelry and demand is increasing, according to the Natural Color Diamond Association (NCDIA.) Consumer perception of colored diamonds was once limited to pink, brown, and yellow; however, the industry expanded the way that designers are incorporating natural color diamonds into their jewelry and now include blue, green, orange, purple, gray, red, and black. NCDIA advised consumers to have all natural color diamonds inspected when purchasing a piece.

Consumers can learn more about natural color diamonds at http://www.ncdia.com/



DIAMOND MINING NEWS:



---Rockwell Sale Nets $15M

Rockwell Diamonds Inc. realized total revenue of $15,219,216 from its most recent diamond sale, representing an average price of $3,680 per carat. During this September sale, Rockwell reported selling a 189.68 carat rough diamond from the Klipdam mine for $10,291,050, which equated to a value of $54,255 per carat. Concurrently Rockwell also realized $4.93 million for the sale of 3,945.84 carats of run-of-mine production from its Wouterspan, Holpan, Klipdam and Saxendrift operations.


---Petra Diamonds Places 39ct Blue Diamond on Tender

Petra Diamonds Limited placed a 39.19 carat special blue diamond in the company’s tender in Johannesburg, South Africa. It is currently available for buyers to view at the offices of SADIAMEX (Meyer Diamonds), in the Diamond Centre in Johannesburg, South Africa. This rare stone was produced from the Cullinan mine in South Africa, which is renowned as the world’s only significant source of highly prized blue diamonds.


---Motapa Diamonds Recovers 23ct Type IIa from Mothae

Motapa Diamonds Inc., and partner Lucara Diamond Corporation, recovered a 23.4 carat type IIa diamond at the Mothae project in Lesotho. The diamond is a white anhedral stone that has been confirmed type IIa by the Swiss Gemological Institute.


---Stornoway Study Outlines +24M Carats at Aviat

Stornoway Diamond Corporation and Hunter Exploration Group concluded a conceptual study of the Aviat Project in Canada. Highlights of the study found 12.4 million to 16 million tonnes total content of kimberlite material with 235 carats per hundred tonnes of total diamond content and 24.1 million to 40.3 million carats in the ground. The 486,000 acre Aviat Project is located on the Melville Peninsula in eastern Nunavut, Canada.


---De Beers to Open Voorspoed in Nov.

De Beers Group plans to open its new Voorspoed mine on November 4, 2008. The mine is expected to produce some 1 million carats per year. The Voorspoed mine will employ 420 people and would be the first opened under the black empowerment initiative.


---Zimbabwe Police Renew Crackdown on Diggers

Police in Zimbabwe have launched what is being called a massive operation against illegal diamond miners. Police intend to flush out illegal panners and restrict the movement of unauthorized people in and around Chiadzwa diamond fields in Manicaland. More than 9,000 illegal diamond panners and dealers had been arrested in and around Chiadzwa this year so far.


---S. Africa: Gov't Official Appointed Acting CEO of State Diamond Trader

Futhi Zikalala, deputy director general of South Africa’s Department of Minerals and Energy, has been appointed acting CEO of the State Diamond Trader (SDT.) Zikalala, who previously sat on the board of the SDT, replaces Abbey Chikane who left the organization after his 12-month fixed-term contract expired on September 1.


---China Urges Europe to Reject BHP Bid for Rio

A senior Chinese government official urged European regulators to reject BHP Billiton Ltd/PLC's $89 billion bid for Rio Tinto Ltd/PLC, saying it would be harmful to the global economy. This past week, BHP got clearance for its bid from Australia's competition regulator. The European Commission has set a January 15 deadline for its in depth review of the deal, having previously flagged its concerns about the impact of surging commodity prices on manufacturers and consumers.


---Leviev's Auramine in Talks with Strategic Investors

Auramine, the company that brings together the gold mining units of Lev Leviev's Leviev Group, could bring a strategic investor on board said Valery Morozov who is general director of the Leviev Group's Russia-based LLC Ruis Diamonds. Auramine is also discussing financing with Russian and foreign banks, Morozov said, without giving details. Leviev Group's Russia-based gold mining assets include the Karalveem field in Chukotka and Sopka Kvartsevaya in the Magadan region.



ECON WATCH:


For week ending October 9, 2008



Oct 9 Oct 2 Chng

$1 = Euro 0.735 0.725 0.010
$1 = Rupee 47.8 47.6 0.2
$1 = Israel Shekel 3.60 3.46 0.14
$1 = Rand 9.37 8.52 0.85
$1 = Canadian Dollar 1.15 1.08 0.07

Precious Metals

Oct 9 Oct 2 Chng

Gold $913.40 $836.80 $76.60
Platinum $1,046.00 $980.00 $66.00


Stock Indexes

Oct 9 Oct 2 Chng Chng%

BSE 11,328.36 13,055.67 -1,727.31 -13.23%
Dow Jones Avg. 8,579.19 10,482.85 -1,903.66 -18.16%
FTSE 4,313.80 4,870.34 -556.54 -11.43%
Hang Seng 15,943.24 18,211.11 -2,267.87 -12.45%
S & P 500 909.92 1,114.28 -204.36 -18.34%
Yahoo! Jewelry Index 745.49 1,001.21 -255.72 -25.54%

USA
Abazias $0.90 $1.40 -$0.50 -35.71%
Birks & Mayors $1.00 $1.30 -$0.30 -23.08%
Blue Nile $37.53 $39.62 -$2.09 -5.28%
Charles & Colvard $0.40 $0.49 -$0.09 -18.37%
Collector's Universe $4.01 $6.56 -$2.55 -38.87%
DGSE Companies, Inc. $1.59 $2.40 -$0.81 -33.75%
Fuqi International $7.03 $8.32 -$1.29 -15.50%
JCPenney $23.42 $32.80 -$9.38 -28.60%
Kohl's $33.16 $42.39 -$9.23 -21.77%
Lazare Kaplan $7.38 $7.43 -$0.05 -0.67%
LJ International $0.55 $0.97 -$0.42 -43.30%
Macy's $11.46 $16.21 -$4.75 -29.30%
Man Sang $1.90 $3.20 -$1.30 -40.63%
Movado Group $15.80 $20.08 -$4.28 -21.31%
Nordstrom $18.97 $25.39 -$6.42 -25.29%
Saks $6.21 $8.56 -$2.35 -27.45%
Signet $15.45 $20.08 -$4.63 -23.06%
Sotheby's $11.09 $18.01 -$6.92 -38.42%
Tiffany $24.67 $33.67 -$9.00 -26.73%
Wal-Mart $51.39 $58.85 -$7.46 -12.68%
Zale $18.01 $24.08 -$6.07 -25.21%

EUROPE
Bulgari €5.05 €6.11 -€1.06 -17.35%
Citizen Holdings €4.77 €4.99 -€0.22 -4.41%
Esa €5.06 €8.08 -€3.02 -37.38%
Golay-Buchel CHF 2,100.00 CHF 2,170.00 -CHF 70.00 -3.23%
LVMH €51.29 €60.37 -€9.08 -15.04%
Pinault P-R SA €48.19 €60.91 -€12.72 -20.88%
Richemont SA CHF 40.70 CHF 49.04 -CHF 8.34 -17.01%
Sakha Diamonds €0.21 €0.27 -€0.06 -21.98%
Swatch Group CHF 175.90 CHF 194.70 -CHF 18.80 -9.66%
Theo Fennell (pence) 40.00 45.00 -€5.00 -11.11%

HONG KONG
Hang HKD 0.65 HKD 0.65 HKD 0.00 0.00%
King Fook HKD 0.49 HKD 0.55 -HKD 0.06 -10.91%
Noble Jewelry HKD 0.65 HKD 0.72 -HKD 0.07 -9.72%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 23.55 32.80 -9.25 -28.20%
Gitanjali Gems 137.30 188.70 -51.40 -27.24%
Rajesh Exports 23.70 28.30 -4.60 -16.25%
Ren. Jewellery 28.95 35.40 -6.45 -18.22%
Su-Raj Diamonds 37.75 46.45 -8.70 -18.73%
Titan 890.90 1,118.85 -227.95 -20.37%
Zodiac JRD 14.30 20.00 -5.70 -28.50%
Shantivijay Jewels 164.85 157.00 7.85 5.00%
Shukra Jewellery 4.05 3.88 0.17 4.38%
Suashish Diamonds 366.25 395.25 -29.00 -7.34%

NEW ZEALAND
Michael Hill NZD 0.74 NZD 0.77 -NZD 0.03 -3.90%

SINGAPORE
Gems TV Holdings SGD 0.085 SGD 0.110 -SGD 0.025 -22.73%
Sarin Technologies SGD 0.250 SGD 0.280 -SGD 0.030 -10.71%

MINING STOCKS

(pence unless noted)

Oct 9 Oct 2 Chng Chng%

USA
Anglo American $12.25 $14.53 -$2.28 -15.69%

CANADA
Archangel CAD 0.30 CAD 0.36 -CAD 0.06 -16.67%


Harry Winston CAD 10.67 CAD 13.01 -CAD 2.34 -17.99%
Mountain Province CAD 1.60 CAD 3.02 -CAD 1.42 -47.02%
Peregrine Diamonds CAD 0.26 CAD 0.36 -CAD 0.10 -27.78%
Rockwell Diamonds CAD 0.23 CAD 0.32 -CAD 0.09 -26.98%
Shore Gold CAD 0.79 CAD 1.07 -CAD 0.28 -26.17%
Stornoway Diamond CAD 0.13 CAD 0.17 -CAD 0.04 -23.53%
True North Gems CAD 0.14 CAD 0.15 CAD 0.00 -3.45%

UK (pence)
African Diamonds 46.4 50.0 -3.6 -7.24%
BHP Billiton 1,036.0 1,121.0 -85.0 -7.58%
Firestone Diamonds 32.0 48.1 -16.1 -33.47%
Gem Diamonds 449.0 540.5 -91.5 -16.93%
Mano River 4.8 6.3 -1.6 -24.60%
Mwana Africa 7.1 15.5 -8.4 -54.19%
Namakwa Diamonds 84.5 98.0 -13.5 -13.78%
Petra Diamonds 91.0 97.5 -6.5 -6.67%
Rio Tinto plc 2,750.00 3,210.00 -460.0 -14.33%

Riadna recesia.

Rapaport TradeWire - Friday, October 17, 2008
---------------------------------------------

Rapaport Weekly Comments: Diamond industry under increasing pressure
as extreme stock market volatility and plummeting commodity prices
rattle global economy. World Federation of Diamond Bourses call on
mining companies to reduce sales amid market liquidity concerns and
plummeting consumer demand. De Beers to reduce next two sights. Oil
drops below $70 and gold falls below $800 amid fears of long term
recession. Large diamond prices weaker but relatively stable as
Christie’s New York sells $29 mil. (69% sold by lot) with Dubai buying
102ct., Emerald cut, L, SI1 for $4,114,500 ($40,300/ct.) and 16.05 Em.
cut, D VS2 (pot. IF) for $2,098,500 ($130,750/ct.) Rio Tinto 3Q
production -9.7% to 6.11 mil. cts. Returns continue as Indian Sept.
polished imports $726 mil. (+112%) and polished exports at $1.43 bil.
(+18%) and U.S. Aug. polished imports $1.36 bil. (+3%) but polished
exports $1.14 bil. (+10.3%). LVMH 3Q sales at $5.69 bil. (+3.1%).
Rapaport offices will be closed October 21-22 for the Jewish holiday.



=============
RETAIL QUOTE:
-------------


"The situation is grim at jewelry stores as this is normally peak
season. Sales are down 10% in September and October (for high-end
rings and necklaces.) It's not that there are fewer customers coming,
they are just spending less."

--Miao Xiaoli
Consultant with Jewelry Studio in China



===========
WORLD NEWS:
-----------

---DTC To Reduce Two Remaining Sights

The Diamond Trading Company informed sightholders in a letter that its
remaining two sights in the calendar year would be smaller and more
focused. The move follows World Federation of Diamond Bourse President
Avi Paz's appeal to diamond producers to limit the supply of rough in
an effort to curb industry debt.


---WFDB Calls on Diamond Producers to Curb Supply

The World Federation of Diamond Bourse (WFDB) appealed to diamond
mining companies to curb their supply of rough diamonds to help ensure
stability for the industry during the current financial crisis. WFDB
president Avi Paz said that his biggest concern for the diamond
industry at the moment was the level of debt which rises as
diamantaires are forced to take bank loans to purchase rough diamonds,
and should be permitted to opt out of auctions they may not be able to
afford.

Paz linked the level of debt in the industry directly to the supply of
rough and stressed that mining companies could enhance stability by
reducing the volume of rough diamonds they are supplying to the
market.


---South Africa Remains 'Reasonably Insulated' from Financial Storm

South Africa, the continent's economic powerhouse, is "reasonably
well-insulated" from the global financial crisis despite expecting low
export revenue this year. The country is one of the world's major
exporters of diamonds and gold, neither of which has yet been damaged
by the current crisis. South Africa's foreign exchange earning exports
also include platinum, coal, aluminum, iron and steel, paper products,
automotive parts and accessories. South African banks say they have
minimal exposure to the subprime or high-risk home loan securities at
the root of the U.S. crisis that has led to the collapse of a growing
list of the U.S. and European banks and financial groups.


---U.S. OPIC Guarantees $250M Credit for Botswana Diamond Industry

Overseas Private Investment Corporation (OPIC) approved a $250 million
guarantee facility for the Botswana diamond industry. OPIC said the
key objective of the facility was to develop a vibrant and robust
lending market to Botswana’s emerging cutting and polishing industry,
which will allow manufacturers to access long term capital to finance
their purchases of rough diamonds for processing.


---Rapaport Broadcast News

Market conditions reflect the times in the U.S. and Israel. Retail
diamond traders in New York say foot traffic is way down, but
consumers are indeed buying. Gold started its historic climb in Oct.
2007, so from this point on it will be tough to experience dramatic
gains in the price of the metal.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23719



==============
DIAMOND STATS:
--------------


---U.S. Aug. Imports/ Exports (YTD=2008 Year to Date)

2008 %Chng YTD %Chng
($Mil) 2007 ($Mil) 2007

Polished Imports $1,359 3% $13,709 16%
Polished Exports $1,137 10% $10,215 44%
Net Polished $222 -24% $3,494 -26%

Rough Import $53 26% $599 12%
Rough Exports $41 52% $304 -5%
Net Rough $1 -80% $295 37%

Diamond Account $223 -25% $3,789 -22%




---India Sept. Imports/ Exports (YTD=2008 Year to Date)

2008 %Chng YTD %Chng
($Mil) 2007 ($Mil) 2007

Polished Exports $1,431 18% $12,044 25%
Polished Imports $726 112% $5,685 125%
Net Polished $705 -19% $6,359 -11%

Rough Imports $959 30% $8,468 18%
Rough Exports $77 89% $636 71%
Net Rough $882 -27% $7,832 15%

Diamond Account ($177) N/A ($1,473) N/A




========================
RETAIL & WHOLESALE NEWS:
------------------------


---Christie's Jewelry Sale Garners $29M

Despite a dour Dow Christie’s Jewels: The New York Sale fared well
with five of the top ten lots soaring over the million dollar mark to
bring the auction total to $29,423,450. The top lot was the highly
touted Ponahalo Diamond, a 102.11-carat rectangular cut LSI1, which
sold for $4,114,500 to Dubai-based dealer Amer Radwan. He also,
snatched up the second of the two stones, a 70.87-carat rectangular
cut, LSI1 for $2,714,800. The two stones were cut from a 316.15-carat
rough diamond discovered at the Venetia mine in 2005.


---Lazare Kaplan Revenues -24% in 1Q Fiscal 2009

Lazare Kaplan International net sales fell 24 percent to $78.3 million
in its first fiscal quarter ending August 31, 2008, and were likely to
continue to soften in the coming months due to the global economic
slowdown. Polished diamond revenues for the period rose 1 percent to
$40.9 million, while rough diamond sales fell 46 percent to $37.4
million. The company nevertheless saw profits rise 125 percent to
$900,000 as it cut cost of sales by 24 percent to $71,856.


---LVMH 3Q Sales +3%, Jewelry +11%

LVMH Moët Hennessy Louis Vuitton third quarter sales rose 3.1 percent
to $5.69 billion. Sales of jewelry and watches grew 11 percent to $894
million. For the first three quarters of its fiscal year sales have
risen 4.5 percent to $16.4 billion. The retailer stated that it was
pleased with results considering poor retailing conditions in the
United States. LVMH maintained its target outlook for the year.


---KARP Impex Buys 128ct D Flawless Rough Diamond

Surat-based diamond manufacturer Karp Impex recently bought a 128.47
carat D color flawless rough diamond on tender for $12.13 million, or
$94,765 per carat. The company called the purchase a milestone for the
Indian diamond industry which is traditionally known as a center for
cutting and polishing smaller stones. Karp did not disclose from which
company it bought the diamond but said the stone was mined on the
Orange River in South Africa.


---Macy's Lowers FY Guidance But Says Need for Cash is Reduced

While Macy's Inc. no longer provides monthly sales figures, the big
box retailer updated investors on recent sales heading into the final
month of its third quarter and stated that capital needs have been
met. Same-store sales at Macy's during August and September fell 5.8
percent. For the year to date (February through September,) same-store
sales have declined by 3.2 percent. If weaker sales trends continue,
same-store sales in the fourth quarter could be down by 3 to 6
percent. The company said its credit facility was in good shape and
would not need additional cash.


---Thailand: Gem Trade Assoc. Remains Optimistic for Growth

Gem and jewelry export sales are expected to grow 10 percent this year
to 200 billion baht ($5.8 billion) despite warnings that the sector
would be one of the first casualties of the global economic meltdown.
The industry grew more than 20 percent in 2007. However, traders are
expected to see up to a 30 percent sales drop from their main export
markets of the United States, Japan and Europe. The new markets of
Russia, the Middle East, China and India have been growing at a rate
faster than 50 percent, but their total value is still too small to
offset the decline in the main markets.


---Chow Tai Fook Announces Deal for Peace Mark

Chow Tai Fook Enterprises bailed out troubled luxury watch maker and
retailer Peace Mark (Holdings). The company did not disclose the
amount for the acquisition, but a source close to the deal said it
paid about HKD600 million ($77.4 million) for Peace Mark's retail
network in the greater China area as well as its watch-manufacturing
facilities. On the completion of the deal, Chow Tai Fook would take
over Peace Mark's 120 luxury watch shops and about 1,000 watch selling
points on the mainland, Hong Kong and Macau.


=============
GENERAL NEWS:
-------------

---Mounties Arrest, Charge Ramirez for $1M Diamond Heist

Royal Canadian Mounted Police in Saskatchewan arrested and charged a
man wanted in a $1 million diamond heist in Toronto. Mounties said
they stopped a driver, Gustavo Ramirez, 38, of Toronto, acting
suspiciously on the Trans-Canada Highway near Swift Current. They said
when they approached the man's vehicle he ran away and later fought
with officers. They later learned the man was wanted by Toronto police
for armed robbery at a jewelry store where thieves stole more than $1
million in diamonds.


---Mumbai: Trader's Diamonds Recovered After Planned Robbery

The Punjab police arrested the son of a bureau policeman for allegedly
robbing a Mumbai trader of diamonds. The police arrested the
26-year-old suspect on Saturday, and said they recovered diamonds
valued at Rs 1.75 crore ($363,143) from his Ludhiana house. A
policeman accomplice was also arrested. The suspect owns a jewelry
business in Patiala. On Sunday, a court remanded him and the
accomplice to police custody until October 15.


---Dubai: Saudi Arabia, Turkey Confirm Participation in MECDJ Summit

Leading diamond and jewelry traders from the Middle East, including
Saudi Arabia and Turkey, have confirmed their participation at the
Middle East-China Diamond and Jewellery Summit (MECDJS,) set to take
place at the Atlantis Hotel, Dubai, from November 8-9, 2008. The
two-day summit will feature panel discussions by leading, local and
international retailers such as Damas International, Joy Alukkas, Chow
Tai Fook, Chow Sang Sang, and Luk Fook. Top jewelry brands including
Roberto Coin, Mouawad, and Christie's have also confirmed their
participation in panel discussions on the first day of the summit.


====================
DIAMOND MINING NEWS:
--------------------


---Rockwell Diamonds Posts Loss in 2Q After Work Stoppage

Rockwell Diamonds posted a deficit for the second quarter ending
August 31, 2008, as a strike by employees at its operations took its
toll on production and revenues. The junior diamond mining company
reported a net loss of $2.25 million. Revenues fell 28 percent to
$10.17 million, with rough diamond sales down 29 percent to $9.9
million. Contract diamond sales and other sales made up the remaining
revenues. The average value of rough diamond sales dropped 27 percent
to $1,951.41 per carat. Rockwell reported that production at its four
operating mines declined 45 percent to 4,266.25 carats for the period.


---Rio Tinto Diamond Production -10% in 3Q 2008

Rio Tinto reported rough diamond production fell 9.7 percent to 6.11
million carats in the third quarter of 2008. The drop came as a result
of declines in production at its flagship Argyle mine in Australia and
at its Diavik mine in Canada. Rio Tinto’s third operating mine is the
Murowa alluvial mine in Zimbabwe. For the first nine months of the
year, Rio Tinto’s total diamond production fell 23 percent to 13.962
million carats.


---Gem Diamonds' Average Prices Soften in 3Q

Gem Diamonds said it saw a softening of prices of higher quality
diamonds mined at its Letseng mine in Lesotho during the third quarter
of 2008, indicating that the current global economic crisis could have
a continued effect of pricing in the short term. The company recorded
average sales of $2,173 per carat from Letseng in the three months
ending September 30, down 13.5 percent. Letseng is the highest per
value diamond mine in the world and has produced three of the top 20
sized stones in history during the past two years.


---S&P Places ALROSA on CreditWatch After Bailout of KIT Bank

Standard & Poor's Ratings Services (S&P) reviewed its long term
corporate credit rating of Russian diamond mining company ALROSA to
'BB,' placing it on CreditWatch with negative implications. S&P
explained the move came in response to ALROSA’s subsidiary, Investment
Group ALROSA’s, planned acquisition of 45 percent of KIT Finance
Investment Bank “which is experiencing financial difficulties.”


---Russia Permits Archangel Investment 50% Stake in Arkhangelsk

The governmental commission for control over foreign investments is
considering about 10 applications from foreigners who wish to work
with Russian strategic industries, including diamonds. The first
allowance was for the sale of a 49.99 percent stake in the
diamond-mining company Arkhangelsk-Geologodobycha to Luxemburg's
Archangel Investment, indirectly controlled by De Beers. The
government commission reserved certain mandatory conditions, such as
the processing of diamonds in Russian territory in amounts to be
agreed with the Russian government later.


---Lonhro Mining Raises $3M in Share Placement

Lonrho Mining Limited, formerly Nare Diamonds, raised $2.89 million in
a share placement on the Australian Stock Exchange. The company said
it would use the funds to further exploration and development of its
Lulo project in Angola, to finance its Schmidtsdrift operation until
completion of its sale of the mine, and for general working capital
purposes. Lonrho agreed in August to sell the Schmidtsdrift mine to
new Africa Mining for $13.5 million in order to focus on the
development of Lulo.


===========
ECON WATCH:
-----------

For week ending October 16, 2008


Oct 16 Oct 9 Chng
$1 = Euro 0.743 0.735 0.008
$1 = Rupee 48.6 47.8 0.8
$1 = Israel Shekel 3.73 3.60 0.14
$1 = Rand 10.14 9.37 0.77
$1 = Canadian Dollar 1.18 1.15 0.03

Precious Metals
Gold $805.10 $913.40 -$108.30
Platinum $906.00 $1,046.00 -$140.00

Stock Indexes
BSE 10,581.49 11,328.36 -746.87 -6.59%
Dow Jones Avg. 8,979.26 8,579.19 400.07 4.66%
FTSE 3,861.39 4,313.80 -452.41 -10.49%
Hang Seng 15,230.52 15,943.24 -712.72 -4.47%
S & P 500 946.43 909.92 36.51 4.01%
Yahoo! Jewelry Index 793.20 745.49 47.71 6.40%

USA
Abazias $0.52 $0.90 -$0.38 -42.22%
Birks & Mayors $0.85 $1.00 -$0.15 -15.00%
Blue Nile $35.08 $37.53 -$2.45 -6.53%
Charles & Colvard $0.36 $0.40 -$0.04 -10.00%
Collector's Universe $4.13 $4.01 $0.12 2.99%
DGSE Companies, Inc. $2.10 $1.59 $0.51 32.08%
Fuqi International $7.48 $7.03 $0.45 6.40%
JCPenney $21.02 $23.42 -$2.40 -10.25%
Kohl's $30.43 $33.16 -$2.73 -8.23%
Lazare Kaplan $6.00 $7.38 -$1.38 -18.70%
LJ International $0.56 $0.55 $0.01 1.82%
Macy's $10.05 $11.46 -$1.41 -12.30%
Man Sang $1.81 $1.90 -$0.09 -4.74%
Movado Group $15.67 $15.80 -$0.13 -0.82%
Nordstrom $16.64 $18.97 -$2.33 -12.28%
Saks $5.40 $6.21 -$0.81 -13.04%
Signet $14.07 $15.45 -$1.38 -8.93%
Sotheby's $10.65 $11.09 -$0.44 -3.97%
Tiffany $27.61 $24.67 $2.94 11.92%
Wal-Mart $54.62 $51.39 $3.23 6.29%
Zale $16.73 $18.01 -$1.28 -7.11%

EUROPE
Bulgari €5.30 €5.05 €0.25 4.95%
Citizen Holdings €4.93 €4.77 €0.16 3.35%
Esa €4.95 €5.06 -€0.11 -2.17%
Golay-Buchel CHF 2,170.00 CHF 2,100.00 CHF 70.00 3.33%
LVMH €51.59 €51.29 €0.31 0.59%
Pinault P-R SA €40.71 €48.19 -€7.49 -15.53%
Richemont SA CHF 39.04 CHF 40.70 -CHF 1.66 -4.08%
Sakha Diamonds €0.25 €0.21 €0.04 17.37%
Swatch Group CHF 173.00 CHF 175.90 -CHF 2.90 -1.65%
Theo Fennell (pence) 37.25 40.00 -€2.75 -6.88%


HONG KONG
Hang HKD 0.65 HKD 0.65 HKD 0.00 0.00%
King Fook HKD 0.44 HKD 0.49 -HKD 0.05 -10.20%
Noble Jewelry HKD 0.60 HKD 0.65 -HKD 0.05 -7.69%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 25.25 23.55 1.70 7.22%
Gitanjali Gems 119.85 137.30 -17.45 -12.71%
Rajesh Exports 24.05 23.70 0.35 1.48%
Ren. Jewellery 29.55 28.95 0.60 2.07%
Su-Raj Diamonds 31.15 37.75 -6.60 -17.48%
Titan 857.00 890.90 -33.90 -3.81%
Zodiac JRD 13.15 14.30 -1.15 -8.04%
Shantivijay Jewels 160.60 164.85 -4.25 -2.58%
Shukra Jewellery 3.85 4.05 -0.20 -4.94%
Suashish Diamonds 380.95 366.25 14.70 4.01%

NEW ZEALAND
Michael Hill NZD 0.70 NZD 0.74 -NZD 0.04 -5.41%

SINGAPORE
Gems TV Holdings SGD 0.085 SGD 0.085 SGD 0.000 0.00%
Sarin Technologies SGD 0.230 SGD 0.250 -SGD 0.020 -8.00%

Rapaport TradeWire - Friday, October 24, 2008
=============================================

Rapaport Weekly Comments: Diamond trading activity stalls as buyers
face extreme uncertainly about viability of current price levels. The
trade expects prices to fall but no one knows by how much. Bridal
demand relatively stable but almost everything else is on hold as
consumers put off purchases and liquidity deteriorates. Extreme
volatility in currency markets drive Euro to two year low ($/0.781),
and Rupee plummets below $/50 as investors flee emerging markets.
India’s GJEPC calls on rough producers to curtail supplies amid
reports that De Beers, Russia and other suppliers will reduce supplies
by as much as 30%. BHP 1Q09 diamond production at 773,000 cts. (-24%).
Antwerp Diamond Conference cancelled due to financial crisis. Antwerp
press reports court seizure of $128 mil. of diamonds from Omega
Diamonds the second largest importer of rough diamonds from Africa
accounting for 12% of Antwerp’s rough imports. U.S. retail chain
Mervyns to close after holidays.


-------------
RETAIL QUOTE:
=============

"Business is up one month, down the next. Funnily enough though, the
last three weeks when the news has been at its blackest, it's been
pretty good. People still get engaged or married and celebrate their
birthdays during a recession, and they are still buying jewelry. It
could be because the recession has been so rammed down our throats and
we're talking such huge, huge sums people cannot comprehend. It's out
of their control. So I think they sit back and think, "There's nothing
I can do so I might as well enjoy myself and buy those earrings."

---Jeremy Hoye
Jeremy Hoye Store in Brighton, UK


-----------
WORLD NEWS:
===========

---GJEPC Calls for Reduced Supply of Rough to Maintain Stability

The Gem & Jewellery Export Promotion Council of India appealed to all
the rough producers to curtail the supply of rough diamonds for a few
weeks in order to maintain stability and confidence in the diamond
market during the current economic turmoil.


---Preventative Diamond Seizure Paralyzes Trade

The court in Antwerp has seized EUR 100 million ($128 million) in
diamonds from the Omega Diamonds firm, Groot Bijgaarden De Standaard
reported citing court sources. This past Wednesday, a search took
place at Omega Diamonds, and the investigating judge decided to empty
the safes, and seized diamonds. Sources at the court stated the
consignment of diamonds without the required Kimberley Process
Certificates was found and assume from that they were illegally
imported.

The court makes it a practice in major diamond investigations to seize
the stocks immediately. The diamond sector is hoping for the passing
of a bill whereby preventive attachment will be possible only
following an expert's permission. The Antwerp World Diamond Centre
said the seizures were disrupting market processes and urges that the
goods be released. There are ways of investigating security other than
such a seizure which could have far-reaching consequences for the
entire sector, according to AWDC's CEO Freddy Hanard.


---BHP Billiton Diamond production -24% in Sept. Quarter

BHP Billiton reported a 24 percent fall in diamond production to
773,000 carats in the first quarter of its fiscal year ending
September 30, 2008. Quarterly production declined due to lower grades
and a change in ore source expected as it transitions its Ekati mine
from open pit to underground mining.


---ALROSA Considers Holding Back 30% of Supplies

ALROSA could slash supplies of rough offered to the market by up to 30
percent. The reduction would affect the whole range of ALROSA's
diamonds. The decision was said to help stabilize the world diamond
market. A diamond stockpile would be set up at the Gokhran and it too
would refrain from selling rough on the market.


---Myanmar Gem Auction Nets $175M

The most recent government sale of gemstones in Myanmar fetched about
$175 million during a two-week auction, which ended October 16. The
amount was up about 46 percent from the country's auctions held in
June and March, and up 17 percent from fourth-quarter auction in 2007.
Myanmar generally holds three auctions per year. An organizer of the
gems emporium said some 2,600 gem merchants participated in the
auction. It was estimated that some 2,000 buyers from China attended
the event.


---Trade Between EU, Asia Grew 60% in Seven Years

China led the trade boom between Asian countries and the European
Union (EU) over the past seven years. Between years 2000 and 2007,
EU's trade with the 16 Asian countries grew by around 60 percent. Main
EU exports to the Asian countries were aircraft, diamonds, electronic
circuits, motor cars, and medicine, while the main imports were
computers and parts, mobile phones, motor cars and digital cameras.


---Rapaport Broadcast News

Comments from Israel, India, and New York show broad weakness across
the markets; Royal Asscher appoints a new sales manager for North
America to push the diamond business; Tom Cushman is recognized for
his sustainable mining work in Madagascar; and retailer Levinson
Jewelers builds brand awareness with event sponsorships.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23791


------------------------
RETAIL & WHOLESALE NEWS:
========================

---Japan's Sept. Dpt. Store Sales -5%

Department store sales across Japan fell 4.7 percent during September,
based upon same-store totals. Total sales were JPY524.0 billion ($5.19
billion.) Jewelry sales fell 6.4 percent as economic pressure weighed
on the luxury goods sector.


---Tanishq Jewelry Sales Spurs Growth at Titan in 2Q

Titan Industries reported that sales at its jewelry unit under the
Tanishq brand rose 71 percent to INR 752.18 crore ($152.34 million) in
its second fiscal quarter ending September 30, 2008, largely due to
the rise in gold prices. The group’s total sales grew 52.4 percent to
INR 1,104.85 crore ($223.77 million) for the period. Growth was
spurred by the jewelry unit under the Tanishq brand which made up 68
percent of total sales. Titan’s watch sales rose 18.8 percent to INR
303.45 crore ($61.46 million,) and its “other businesses” grew 93.7
percent to INR 17.62 crore (3.57 million.) The company’s net profit
increased 88 percent to INR 87.14 crore ($17.65 million) in the
quarter.


---Mervyn's to Close

Retail chain Mervyn's has decided to close after exhausting its
options under bankruptcy protection. The retailer filed for bankruptcy
in July. Mervyn's has been operating for nearly six decades across the
southwestern United States, mostly in California. The company will
conduct a "going out of business" sale during Christmas season.


---Derco Jewelers Emerges from Chpt. 11

Derco Jewelers Inc. of San Francisco emerged from Chapter 11
bankruptcy in less than 10 months after filing for protection. U.S.
Bankruptcy Judge Dennis Montali confirmed Derco’s status on October
15, 2008. Derco is a full service jeweler and manufacturer established
in 1939, and maintains two stores in San Francisco.


---James Avery Open 48th Location

James Avery opened its newest store at the Victoria Mall in Texas
earlier this month. The jeweler will hold a ribbon cutting ceremony on
October 23 with a grand opening celebration from 6 p.m. to 8 p.m. With
the new store in Victoria, James Avery now has 48 locations.


---Bidz.com Selects Mercent Retail to Drive-up Traffic, Sales

Online jewelry retailer Bidz.com launched the Buyz.com online
storefront this year to provide gold, silver, and brand name jewelry
and watches at fixed prices. Bidz.com recently adopted the on-demand
Mercent Retail platform to promote these products on all the leading
comparison shopping engines and affiliate networks. Mercent helps
retailers drive product sales through more than 50 e-commerce
channels, including comparison shopping engines, transactional
marketplaces, paid inclusion programs, and affiliate networks.
Bidz.com revenues grew 42 percent in 2007 to $187.1 million. During
the first half of 2008, Bidz.com achieved sales of $116.9 million, a
39 percent increase from 2007.


---India: Drop in Diamond Demand Forces Shops to Close

With the demand for polished diamonds in the global market on the
slide there are few takers for polished diamonds and the rough
diamonds supplied to the industry have piled up in Surat. For the
first time in the past several years, the industry has asked rough
diamond suppliers to cut supplies. Recently, as many as 2,000 smaller
diamond units have closed. At the same time, the decreased demand for
polished diamonds will force as many as 2,000 more units to shut after
Diwali vacation.


---Wealthy Shoppers in Russia Cool Spending Habits

Russia, one of the world's fastest growing and largest luxury markets,
is being hit by the financial crisis. After months of resilience
consumers had finally started to rein in spending on pricey items such
as jewelry, and fashion apparel.


------------
WHO IS NEWS:
============

---Mogae Wins $5M Prize for Good Governance

Botswana's former President Festus Mogae was named the winner of a $5
million prize for good governance in Africa, winning praise for
putting his country's mineral wealth to good use. Announcing the
Ibrahim Prize for Achievement in African Leadership in London's City
Hall, former U.N. Secretary General Kofi Annan also praised Mogae's
efforts in fighting AIDS in the southern African nation.


---Rockwell Names Morgan as CFO

Rockwell Diamonds Inc. appointed Desmond Morgan as its new chief
financial officer (CFO.) Morgan replaces Dominique de la Roche, who
resigned from the role and will leave the company.


---Two Pink Panther Members Caught in Monaco

INTERPOL reported the arrest of two suspected members of the so-called
Pink Panther gang of jewel thieves in Monaco after one suspect was
taken to a hospital following a car crash. Dusko Poznan, 30, from
Bosnia-Herzegovina, and an unnamed 27-year-old Serbian were arrested
after local police recognized their photos from INTERPOL. Police
identified Poznan from a photo circulated by INTERPOL when they went
to the hospital to question the man following the accident in Monaco.

The Pink Panther gang is believed to have stolen some $135 million
worth of jewelry from shops across 20 countries. The group earned its
name in 2004 for hiding a diamond ring in a jar of face cream -- which
had been a ploy used in one of the Pink Panther films starring the
late Peter Sellers.



-------------
GENERAL NEWS:
=============

---DMIA NY Open Meeting Oct. 27

The Diamond Manufacturers & Importers Association of America (DMIA) in
New York invites all interested parties to an important legal program
on Memos, Consignments, Accounts Receivable, Security Agreements,
UCC’s and Bankruptcy to be held on Monday, October 27th beginning
promptly at 4:00 p.m. The program will take place in the Grand
Ballroom of the 3 West Club located at 3 West 51st Street, NYC. Any
member of the diamond and jewelry industry wishing to attend MUST
contact the DMIA office to reserve a space. (212) 944-2066


---Panama Diamond Exchange to Launch on October 24

The Panama Diamond Exchange (PDE) will officially launch on Friday
October 24, 2008. The PDE is being launched as a first stage towards
developing Panama as a hub for the Latin American diamond and jewelry
markets.


---Fifth Antwerp Diamond Conference Postponed

In light of the financial crisis, the Fifth Antwerp Diamond
Conference, which was scheduled to take place in Antwerp on November
17 and 18, has been postponed. The Antwerp World Diamond Centre is
reviewing future dates for the conference.


---Positive Response to Dubai Diamond Summit

Organizers of the inaugural Middle East-China Diamond and Jewellery
summit in Dubai have received an overwhelming response for the event.
More than 500 diamond traders, retailers and jewelry stakeholders will
take part in summit to be held at the Atlantis Hotel, The palm
Jumeirah in Dubai on November 8-9, the Dubai Multi Commodities Centre
(DMCC) said. Delegates to the Dubai summit include representatives
from 70 companies in China, more than 150 delegates from across Europe
and India, and more than 280 participants from the Middle East.


---Partnership Africa Canada: Diamonds and Human Security

In this year's Diamonds and Human Security Annual Review from
Partnership Africa Canada (PAC,) the group turned its attention to
evidence of a large and growing trade in illicit rough diamonds,
running in parallel with the Kimberley Process Certification Scheme
that is supposed to eliminate the practice.

The review covers the diamond trade in 13 countries of Africa and
South America. It found Venezuela's production vanishes without a
trace, and discussed developments in Côte d'Ivoire, the last bastion
of conflict diamonds. The increasingly formulaic Kimberley Process is
becoming less rather than more effective in curtailing abuse and
criminality, PAC concluded.

http://www.pacweb.org/


---GemClear Finds Non-compliant Topaz in U.S. Market

GemClear found irradiated blue topaz in the United States market that
was not in compliance with Nuclear Regulatory Commission ("NRC")
regulations. The gems, from a New York dealer, were believed to be
legal, but were not. The gems will be at the U.S.-legal level of
compliance at the end of November 2008. There is no process or
treatment that can accelerate the decay rate, only time. The
non-compliant stones have been withheld from the market.


---Sundance Diamonds Opens New Testing Facility in Israel

Sundance Diamonds, a high pressure high temperature (HPHT) diamond
processing company, will officially open its new diamond testing
service in the Israel Diamond Exchange on October 30. The new facility
is located in the Brinks office in the Maccabi Building of the Ramat
an exchange and will operate by appointment only.



--------------------
DIAMOND MINING NEWS:
====================

---ALROSA to Resume Rough Diamond Supply to Armenia

ALROSA will resume its supply of rough diamonds to Armenia after a
three year break. The deal follows an agreement signed in August 2007
between ALROSA and the Armenian government to cooperate in the jewelry
industry. ALROSA plans to deliver diamonds worth $28 million to $30
million to four Armenian companies, the largest of which is DCA.


---DiamonEx Starts First Sale of Lerala Diamonds

DiamonEx commenced the sale of its first parcel of diamonds from the
Botswanan Lerala mine presenting 10,000 carats for viewing in
Botswana. The sale was previously postponed from its pre-scheduled
date in August as delays in commissioning the mine meant it did not
have a sufficiently large parcel at that time. The stones were
recovered during the commissioning and start-up phase at Lerala and
will be presented in Antwerp after this week’s showing in Gaborone.
DiamonEx also launched plans to raise UAD 2 million through the
placement of 20 million of its shares.


---Gemfields Adjusts Offer for Tanzanite One

Gemfields Resources adjusted its offer to purchase Tanzanite One
Limited following Tanzanite One’s dividend payment in September.
Gemfields has now proposed a tender offer of 42.75 pence per share for
30,754,970 shares, or a total GBP13.15 million ($21.38 million.)
Gemfields --together with its parent company Pallinghurst Resources--
currently owns 18.5 percent of Tanzanite One and acceptance of the
offer will push that stake up to approximately 60 percent. Gemfields,
which holds exclusive rights to the Faberge brand, has argued that the
acquisition of Tanzanite One would help it become the world's leading
miner of colored gemstones. The offer closes November 11.



-----------
ECON WATCH:
===========

For week ending October 23, 2008

For week ending October 23, 2008


Oct 23 Oct 16 Chng

$1 = Euro 0.774 0.743 0.031
$1 = Rupee 50.0 48.6 1.4
$1 = Israel Shekel 3.83 3.73 0.10
$1 = Rand 11.03 10.14 0.89
$1 = Canadian Dollar 1.25 1.18 0.07

Oct 23 Oct 16 Chng
Precious Metals
Gold $721.90 $805.10 -$83.20
Platinum $823.00 $906.00 -$83.00

Stock Indexes

Oct 23 Oct 16 Chng Chng%

BSE 9,771.70 10,581.49 -809.79 -7.65%
Dow Jones Avg. 8,691.25 8,979.26 -288.01 -3.21%
FTSE 4,087.83 3,861.39 226.44 5.86%
Hang Seng 13,760.49 15,230.52 -1,470.03 -9.65%
S & P 500 908.11 946.43 -38.32 -4.05%
Yahoo! Jewelry Index 681.46 793.20 -111.74 -14.09%

USA
Abazias $0.51 $0.52 -$0.01 -1.92%
Birks & Mayors $0.90 $0.85 $0.05 5.88%
Blue Nile $27.97 $35.08 -$7.11 -20.27%
Charles & Colvard $0.32 $0.36 -$0.04 -11.11%
Collector's Universe $3.56 $4.13 -$0.57 -13.80%
DGSE Companies, Inc. $1.90 $2.10 -$0.20 -9.52%
Fuqi International $7.56 $7.48 $0.08 1.07%
JCPenney $19.50 $21.02 -$1.52 -7.23%
Kohl's $28.26 $30.43 -$2.17 -7.13%
Lazare Kaplan $5.63 $6.00 -$0.37 -6.17%
LJ International $0.43 $0.56 -$0.13 -23.21%
Macy's $9.61 $10.05 -$0.44 -4.38%
Man Sang $1.61 $1.81 -$0.20 -11.05%
Movado Group $14.05 $15.67 -$1.62 -10.34%
Nordstrom $16.88 $16.64 $0.24 1.44%
Saks $5.68 $5.40 $0.28 5.19%
Signet $12.23 $14.07 -$1.84 -13.08%
Sotheby's $8.65 $10.65 -$2.00 -18.78%
Tiffany $23.80 $27.61 -$3.81 -13.80%
Wal-Mart $52.76 $54.62 -$1.86 -3.41%
Zale $14.91 $16.73 -$1.82 -10.88%

EUROPE
Bulgari €5.55 €5.30 €0.25 4.72%
Citizen Holdings €4.55 €4.93 -€0.38 -7.71%
Esa €4.86 €4.95 -€0.09 -1.82%
Golay-Buchel CHF 2,100.00 CHF 2,170.00 -CHF 70.00 -3.23%
LVMH €50.46 €51.59 -€1.13 -2.19%
Pinault P-R SA €40.93 €40.71 €0.22 0.54%
Richemont SA CHF 24.60 CHF 39.04 -CHF 14.44 -36.99%
Sakha Diamonds €0.27 €0.25 €0.02 6.00%
Swatch Group CHF 177.10 CHF 173.00 CHF 4.10 2.37%
Theo Fennell (pence) 28.00 37.25 -€9.25 -24.83%

HONG KONG
Hang HKD 0.65 HKD 0.65 HKD 0.00 0.00%
King Fook HKD 0.39 HKD 0.44 -HKD 0.06 -12.50%
Noble Jewelry HKD 0.54 HKD 0.60 -HKD 0.06 -10.00%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 24.45 25.25 -0.80 -3.17%
Gitanjali Gems 105.20 119.85 -14.65 -12.22%
Rajesh Exports 25.65 24.05 1.60 6.65%
Ren. Jewellery 24.90 29.55 -4.65 -15.74%
Su-Raj Diamonds 30.05 31.15 -1.10 -3.53%
Titan 979.65 857.00 122.65 14.31%
Zodiac JRD 12.65 13.15 -0.50 -3.80%
Shantivijay Jewels 159.00 160.60 -1.60 -1.00%
Shukra Jewellery 4.04 3.85 0.19 4.94%
Suashish Diamonds 393.65 380.95 12.70 3.33%

NEW ZEALAND
Michael Hill NZD 0.66 NZD 0.70 -NZD 0.04 -5.71%

SINGAPORE
Gems TV Holdings SGD 0.080 SGD 0.085 -SGD 0.005 -5.88%
Sarin Technologies SGD 0.180 SGD 0.230 -SGD 0.050 -21.74%

MINING STOCKS
(pence unless noted)
Oct 23 Oct 16 Chng Chng%
USA
Anglo American $9.83 $11.00 -$1.17 -10.64%

CANADA
Archangel CAD 0.24 CAD 0.50 -CAD 0.26 -52.00%
Harry Winston CAD 9.66 CAD 9.74 -CAD 0.08 -0.82%
Mountain Province CAD 1.42 CAD 1.32 CAD 0.10 7.58%
Peregrine Diamonds CAD 0.25 CAD 0.29 -CAD 0.04 -14.04%
Rockwell Diamonds CAD 0.18 CAD 0.18 CAD 0.00 0.00%
Shore Gold CAD 0.61 CAD 0.58 CAD 0.03 5.17%
Stornoway Diamond CAD 0.12 CAD 0.11 CAD 0.01 9.09%
True North Gems CAD 0.10 CAD 0.15 -CAD 0.05 -33.33%

UK (pence)
African Diamonds 47.9 47.3 0.6 1.27%
BHP Billiton 823.0 811.0 12.0 1.48%
Firestone Diamonds 19.5 27.3 -7.8 -28.44%
Gem Diamonds 308.0 285.0 23.0 8.07%
Mano River 4.3 4.4 -0.1 -2.86%
Mwana Africa 2.5 5.3 -2.8 -52.38%
Namakwa Diamonds 54.0 57.5 -3.5 -6.09%
Petra Diamonds 75.0 90.5 -15.5 -17.13%
Rio Tinto plc 2,240.00 2,050.00 190.0 9.27%

vvvvvRapaport TradeWire - Friday, October 31, 2008
=============================================

Rapaport Weekly Comments: Limited trading as diamond markets try to
absorb financial crisis shock and India celebrates Diwali. U.S. Retail
sales holding up better than expected but few if any are ordering new
merchandise. Cutters and dealers highly concerned about diamond price
levels and market liquidity as banks are expected to tighten credit
access. U.S. Sept. department store sales -5% to $16.5 bil., 3Q GDP
-0.3%, jewelry price index +9%. Demand for large stones remains soft.
Fine cut carat to 2ct, SI, doing well as large retailers honor
previous commitments for holiday season. India’s Diwali holiday season
attracts jewelry demand as gold becomes more affordable but demand is
weaker than last year. De Beers 3Q08 production down -4.1% to 13.3
mil. carats. U.N. extends embargo on Ivory Coast diamonds for one year
as war in Congo intensifies. NGOs warn of increased diamond smuggling
from Venezuela and Zimbabwe ahead of Kimberley Process meeting.


--------------
ANNOUNCEMENTS:
==============

==================================-
RAPAPORT DIAMOND CONFERENCE 2008
NOW AVAILABLE ON VIDEO DVD !
==================================-

Did you predict the financial crisis?
On September 8, the Rapaport Conference did.

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Speakers and Diamond Specific Topics included:
Rajiv Mehta: Dimexon/Eurostar - Globalization
Victor Van der Kwast: ABN Amro - Banking
Rahul Kadakia: Christies - Big Stone Boom
Gerald Celente: World Economy
Martin Rapaport: Diamond Markets of the Future
Ralph Destino: Chairman GIA - Branding
Neil Goldberg: CEO Zale - Retailing
Mark Moeller: President AGS - Are Bread & Butter Goods Toast?
James Shigley: GIA Research - Treatments and Synthetics

Order now - $100 plus shipping

Email: IDC@Diamonds.Net
Telephone: +1-702-893-9400


=================================.
RAPAPORT TO SPEAK IN MUMBAI INDIA
=================================.

Martin Rapaport will discuss Diamond Prices
Thursday, November 6 at 6 PM
Taj Palace Hotel – Mumbai

Contact:
india@diamonds.net
+9122-6637-6633

========================================-
For additional information about rapaport events
http://www.diamonds.net/Events/default.aspx
========================================-


-------------
RETAIL QUOTE:
=============

"In this tough economy, jewelry has fallen down the list of priorities
for many. It's a struggle [to survive.] But I'm determined to make it
work by adding engraving services and offering designer products and
quality custom pieces."

---Brenda Cohen
Berwick Jewelers, Savannah, Georgia


-----------
WORLD NEWS:
===========

---Rapaport: Prices Under Pressure, Expected to Decline

Rapaport chairman Martin Rapaport spoke at the Ramat Gan diamond
bourse about the current state of the diamond business and explained
that diamond prices are under pressure and expected to decline. His
comments were met with appeals from diamond manufacturers and dealers
to freeze the Rapaport Price List or stop publishing it until after
Christmas. Rapaport replied that he could not do this, and would
publish his opinion of diamond prices on a weekly basis as he has for
the past 30 years. Rapaport stressed his ethical obligation to publish
prices even if they were lower.


---Gubelin Gem Lab Receives HPHT Treated Diamond with Fake GIA Report

The Gubelin Gem Lab stated that it had recently received a diamond for
testing that displayed indications of HPHT treatment, but whose
accompanying GIA certificate didn't mention treatment. Gubelin Gem Lab
suspected the certificate was a forgery "based on the appearance and
content of genuine GIA reports." The diamond -- D Color, IF clarity,
Excellent Cut grade -- exceeded 2 carats.


---UN Extends Diamond Sanctions on Cote d'Ivoire

Cote d'Ivoire will face sanctions on its diamond trade until at least
October 31, 2009. The United Nations Security Council unanimously
approved a resolution drafted by France that extends the ban on
selling arms to Cote d'Ivoire and against buying rough diamonds for
another year. The Council made presidential elections part of the
deal. It will review sanctions "no later than three months after the
holding of open, free, fair and transparent presidential elections."


---PAC and Global Witness Call for Swift Action to Address KP Flaws

As the Kimberley Process (KP) rough diamond certification scheme’s
fifth year draws to a close, the trafficking of conflict and illicit
stones looks more like a dangerous rule than an exception. In a report
released today, Global Witness and Partnership Africa Canada (PAC)
warned that the illicit trade in rough diamonds remains one of the
greatest threats facing the Kimberley Process. The report also claims
that the cutting and polishing industry is completely outside KP
scrutiny and is currently a largely exploited loophole.


---USA: GDP, Personal Spending Drop in 3Q08

Real gross domestic product (GDP) in the United States fell at an
annual rate of 0.3 percent in third quarter. Second quarter GDP rose
2.8 percent, the government reported. The price index for gross
domestic purchases increased 4.8 percent in the third quarter,
compared with an increase of 4.2 percent in the second quarter. Real
personal consumption expenditures decreased 3.1 percent in the third
quarter, in contrast with an increase of 1.2 percent in the second
quarter.


---Credit Markets Signal Tighter Squeeze

The credit markets showed renewed signs of stress as investors,
worried about plunging stocks and the possibility of companies
defaulting on their debt, fled once again to the safety of Treasury
bills. Another dip in bank-to-bank lending rates offered little
relief. Fears are growing that the world could suffer a serious,
widespread recession, and large investors -- particularly hedge funds
-- are responding to the turmoil by “deleveraging” or trying to pay
off their debts. Deleveraging involves selling stocks and other assets
and, in turn, causing them to plunge in value.


---India: Gold Sales Jump in October

Gold sales have picked up phenomenally after a fall in prices to the
INR 12,000-level per 10 grams ($240.50.) The consistent steep decline
in equity markets has boosted the demand for the yellow metal as a
safe investment. According to the study, about 50 tons of the metal
was consumed during October 1-20, compared to more than 80 tons sold
in the whole of the October-December quarter in 2007.


---Rapaport Broadcast News

The Uniform Commercial Code or UCC financial statement form is a
useful tool for memos/consignments. In this segment, UCC experts
discuss how diamond dealers can use the form to protect themselves in
transactions. Partnership Africa Canada (PAC) stepped up its
monitoring of the diamond industry ahead of next week’s Kimberley
Process plenary and found issues of non-compliance remain troublesome.
PAC's Ian Smillie discusses what he hopes the meeting accomplishes.

http://www.diamonds.net/News/NewsItem.aspx?ArticleID=23880


------------------------
RETAIL & WHOLESALE NEWS:
========================

---Shrenuj Profits -50% in 2Q

Diamond and jewelry manufacturer Shrenuj & Company's profits fell 50
percent in the company's second fiscal quarter as sales fell and
expenses rose. Consolidated net profits fell 49.8 percent to INR 57
million ($1.15 million) in the three months ending September 30, 2008.
Net sales declined 4 percent to INR 3.42 billion ($69.22 million) and
total expenses fell 3 percent to INR 3.20 billion ($64.66 million).


---Suashish Diamonds 2Q Sales +36%, Reports Net Loss

Suashish Diamonds moved into the red in the second quarter of its
fiscal 2008-09, largely because of higher expenses. The Mumbai-based
Diamond Trading Company sightholder posted a net loss of INR 292.71
million ($5.9 million) in the three months ending September 30, 2008,
down from a profit of INR 174.36 million ($3.53 million) one year ago.
Net sales rose 36 percent to INR 2.91 billion ($58.98 million.) Its
expenses grew 46 percent to INR 2.96 billion ($59.93 million.)


---Su-Raj Diamonds 2Q Profits -23%

Su-Raj Diamonds and Jewellery Limited reported that net profits fell
23 percent to INR 94.8 million ($1.9 million,) in the second fiscal
quarter ended September 30, 2008. The decline came despite a 25
percent rise in net sales to INR 5.37 billion ($108.55 million) during
the period. Operating expenses rose 27 percent to INR 5.24 billion
($105.96 million.)


---Classic Diamonds Profits -54% in Fiscal 2Q

India-based company Classic Diamonds' net profits fell 54 percent from
a year before to INR 35.66 million ($712,020) in the three months
ending September 30, 2008. Sales for the second fiscal quarter rose 16
percent to INR 2.03 billion ($40.6 million,) boosted by strong
revenues at the jewelry division, up 105 percent to INR 621.61 million
($12.41 million,) while diamond division revenues fell 21 percent to
INR 1.41 billion ($281.84 million.)


---Chopard Sales +11% in First Nine Months

Sales of Swiss luxury watch and jewelry manufacturer Chopard in Italy
in the first nine months of 2008 climbed 10.5 percent on the year. The
company's sales in Italy in the third quarter alone increased 16.4
percent on the year.


---Bijou Brigitte 9mos Sales +3%, Profits -4%

Bijou Brigitte fashion jewelry reported a 3 percent increase in sales
for the first nine months of 2008 to EUR 269.6 million ($350 million.)
Profits fell 3.7 percent to EUR 54.5 million ($71 million.) The
retailer opened 58 new shops across Germany during the first three
quarters and closed 13 underperforming stores.


---Kiran Jewels Initiates Chpt. 7 Against Dunkin's

Kiran Jewels Inc. initiated a Chapter 7 involuntary petition today
against retailer Dunkin's Diamonds Inc. of Ohio and Florida. According
to papers filed in the United States Bankruptcy Court for the Southern
District of Ohio, Kiran stated the debtor had not paid for goods
delivered. At press time there was no further information on the case.
Dunkin's corporate offices were already closed for the day and its
principal could not be reached at home. Earlier this month, The
Advocate (of Newark, Ohio,) reported that Dunkin's planned to close
some stores, including one at the Indian Mound Mall.


---RBC Slashes Harry Winston Target Price

RBC Capital Markets slashed its outlook for Harry Winston Diamond
Corporation, as the global economic downturn is expected to hurt
prices of rough diamonds. The investment analysts cut the target price
on Harry Winston shares from $35 a share to $14 for the next 12
months. Despite its dramatic revaluation, RBC said it still sees
“compelling value” in the company for long-term investors. RBC’s chief
concerns about Harry Winston center on a dramatic decline in rough
diamond sales revenue from the Diavik mine -- Harry Winston’s sole
mining operation, in which it owns a 40 percent stake.


---A.M. Best Rates Jewelers Mutual 'A+ Superior'

Jewelers Mutual Insurance Company, for the 22nd consecutive year,
earned an A+ Superior rating from A.M. Best Company. The A+ Superior
rating reflects the overall financial strength of Jewelers Mutual and
consistent profitability. The A.M. Best rating provides a solid
measure of assurance that a company has the capacity to pay claims.
A.M. Best is an independent rating agency widely trusted for its
benchmark ratings when assessing insurers’ financial strength.


---Dimexon Launches China Operation

Dimexon International Holdings launched operations in China. The
company opened offices in the Shanghai Diamond Exchange (SDE,) which
will be managed by Jiaqi Zhao. He will report directly to Dimexon’s
regional office in Hong Kong. Rajiv Mehta, Dimexon's chief executive
officer said the new office will enhance the company's distribution
network in the region and allow it to work more closely with Chinese
retailers and jewelry manufacturers.


---Neil Lane Jewelry Opens in Los Angeles

Jewelry designer Neil Lane opened his flagship store in Los Angeles.
The Neil Lane Jewelry store is located at 708 N. La Cienega Boulevard,
near Melrose Place. Lane has become a legendary figure in Hollywood
for his designs and is an avid collector of fine jewelry. The store
presents a luxurious space featuring display cases made of white oak
and Portuguese limestone, accented with a series of plush offset
panels of ultra-suede. Architect David Montalba designed the space to
create an intimate environment without compromising the glamour and
polish of the Neil Lane brand.


---U.S. Sept. Jewelry Price Index +9%

The year-to-year consumer price index for jewelry in the United States
during the month of September rose 9.3 percent to 156.56 points,
according to statistics provided by the Bureau of Labor Statistics
(BLS). This rate -- based on a reference of average prices in 1986 set
at 100 points -- was almost two points higher than in August.

For the watch and jewelry categories combined, the year-to-year
difference was an increase of 8.2 percent in the United States, at
148.85 points. The September jewelry price index registered its
second-highest level of the year, only 0.03 points behind that
reported in July. During the January to September 2007 cycle, the
index averaged about 142 points, but this year it has risen to an
average of 154.


---U.S. & U.K. Dept. Store Sales Drop

Year-to-year department store sales in the United States contracted
5.3 percent to $16.517 billion in September. Spending at department
stores during September dropped 1.5 percent from the figure reported
in August. For the first nine months of 2008, department store sales
have slipped 3.4 percent to $137.931 billion.

In the U.K., September sales for non-specialized stores (considered
department stores) fell 2.4 percent, but specialized store sales rose
4.6 percent.


------------
WHO IS NEWS:
============

---Jewelers Mutual Appoints New Sales VP

Jewelers Mutual appointed Patrick Drummond as its new vice president
of sales and marketing. Drummond will head the company's marketing
efforts and its nationwide sales team. He joined Jewelers Mutual two
years ago and comes to his new role with 15 years experience in the
insurance industry, the company said.


---Szul, Model Settle $5M Video Lawsuit

A model who writhed and moaned suggestively on a bed in a New York
jewelry company's sexy video ad settled her $5 million lawsuit against
the company. The model said she didn't consent to use of her image "to
simulate a female having an orgasm." The Internet video attracted more
than 700,000 hits before it was removed from YouTube in January. The
accord came to light Monday after a Manhattan judge filed a notice
saying the "action has settled." A joint statement by the model's
lawyer, Kevin Mulhearn, and lawyers for Szul ("zool") Jewelry Inc.
said that the terms of the settlement were confidential.


-------------
GENERAL NEWS:
=============

---Dubai: DMCC, Gov't Entity Agree to Three-Year Export Alliance

The Dubai Export Development Corporation (EDC,) the governmental body
charged with promoting exports from the emirate, announced an alliance
with the Dubai Multi Commodities Centre (DMCC.) The parties expect the
three-year agreement to increase demand for exports of various DMCC
commodities. They will establish a joint management committee to
oversee EDC's provision of a number of specific services, including
export preparation, export facilitation and international trade
assistance to DMCC member companies.


---UK: Birmingham Assay Office Sponsors 'Centrepiece 2008'

The Birmingham Assay Office will sponsor Centrepiece 2008. Running
from November 11 through December 23, the event brings together
contemporary jewelry designers, makers and silversmiths based in West
Midlands. This year the work will be exhibited and available for sale
from two locations: Symphony Hall and Birmingham Town Hall.


--------------------
DIAMOND MINING NEWS:
====================

---De Beers Production -4% in 3Q08

De Beers’ production fell 4.3 percent to 13.1 million carats, in the
quarter ended September 30, 2008. For the first nine months of the
year, De Beers’ production fell 4.1 percent to 37.3 million carats.
The drop in production came as a result of lower recoveries at De
Beers’ flagship Orapa mine in Botswana and at the Venetia mine in
South Africa. The company said that medium- and long-term growth would
be driven by the market fundamentals of its core commodities, with
constrained supply and growing demand led by the industrialization of
China and other developing countries.


---Namakwa Diamonds Expects Continued Price Volatility

Namakwa Diamonds expects diamond prices to remain volatile as the
current global economic uncertainty continues. The company, which
operates in the mining and polished diamond segments of the industry,
observed significant price decreases during August and September from
rough producers that sell exclusively on tender. The decreases were a
result of the general fall in commodities prices, uncertainty in
financial markets, lower liquidity and the threat of global recession,
the company explained.

Namakwa posted a net loss of $19.60 million in the second half of its
fiscal year ending August 31, 2008, as high operating costs took a
toll on operations. Reliable comparable figures were not provided
because this quarter closed the company's first fiscal year since the
company’s listing on the London Stock Exchange in December 2007.
Revenues of $29.30 million were reported on the back of higher
production and stronger pricing for rough and polished diamonds during
the six-month period.


---RBC Note: Diamond Prices Under Strain

In a price target revision note on Petra Diamonds, RBC Capital Markets
lowered its diamond prices forecast by 10 percent a year for the next
two years, to reflect the group's view that rough diamonds would face
demand and pricing pressures as a result of weaker sales and high debt
in cutting centers. RBC Capital Markets did not factor in any value
for exploration since it does not believe the market will accord these
assets any material value at present. This penalizes Petra as it has
an extensive exploration portfolio in Angola and Botswana, but Petra
remains one of RBC Capital Markets’ preferred names in the diamond
sector.


---Stornoway: Formal Review Confirms Successful Diamond Mining Outlook
for Renard

Stornoway Diamond Corporation's economic study for the Renard Diamond
Project improved the project's outlook and the company's confidence in
its construction. The Renard project is located at the Foxtrot
Property in north-central Québec. The report found mineral resources
comprising 7 million carats of "indicated resource" (11.6 million tons
at an average grade of 60 carats per hundred tons (cpht)) and 4.5
million carats of "inferred resource" (7.2 million tons at an average
grade of 63 cpht).


---Rockwell Sale Receives Strong Premiums for Three Yellow Diamonds

Rockwell Diamonds Inc. sold three "exceptional" yellow diamonds to
buyers in southeast Asia. These stones were recovered from Rockwell's
Makoenskloof project and Wouterspan mine, located in the Middle Orange
River area of South Africa, and were cut and polished by the Steinmetz
Diamond Group. The finished stones included one 102-carat vivid yellow
diamond cut from a 212-carat yellow rough diamond, and two matching
10-carat vivid yellow diamonds cut from a 36-carat yellow rough
diamond. The sale of the larger stone achieved a 50 percent premium
over and above the rough diamond value realized for the original
212-carat stone. The matching pair achieved an 80 percent premium over
and above the rough diamond value realized for the original 36-carat
stone. The sale of the three stones resulted in additional revenues of
approximately $2 million.


---TanzaniteOne to Issue 'B' Shares in Attempt to Frustrate Gemfields
Takeover

Miner TanzaniteOne is trying to sabotage a hostile takeover bid from
rival Gemfields in an increasingly ugly battle for control between the
two gemstone groups. Tanzanite, which has attacked Gemfields' GBP 33
million ($51.5 million) offer for discriminating against some
shareholders, is issuing ''B'' shares in a subsidiary company to
frustrate the unsolicited bid. Gemfields is trying to seize control of
Tanzanite by buying out other shareholders on a ''first come, first
served'' basis until its existing 18.5 percent stake climbs above 50
percent.


---West African Diamonds Reflects on Tumultuous Year

The current economic crisis is hitting junior resources hard, and this
has resulted in a tumultuous year for West African Diamonds (WAD.) It
was spun off from African Diamonds in order to focus on diamond
exploration projections in Sierra Leone and Guinea. The share price
has shed 70 percent since its first listing, to open trade this week
at 7.35 pence a share. The company reported a net loss of GBP 220,066
($338,626) for the year ending April 30, 2008, compared with a loss of
GBP 692,260 ($1.06 million) the previous fiscal year, which had
included a GBP 393,713 ($605,313) listing expense.


-----------
ECON WATCH:
===========

For week ending October 30, 2008


Oct 30 Oct 23 Chng

$1 = Euro 0.773 0.774 0.000
$1 = Rupee 49.3 50.0 -0.7
$1 = Israel Shekel 3.76 3.83 -0.07
$1 = Rand 9.93 11.03 -1.10
$1 = Canadian Dollar 1.21 1.25 -0.04


Oct 30 Oct 23 Chng
Precious Metals
Gold $736.70 $721.90 $14.80
Platinum $836.00 $823.00 $13.00

Oct 30 Oct 23 Chng Chng%
Stock Indexes
BSE 9,044.51 9,771.70 -727.19 -7.44%
Dow Jones Avg. 9,180.69 8,691.25 489.44 5.63%
FTSE 4,291.65 4,087.83 203.82 4.99%
Hang Seng 14,329.85 13,760.49 569.36 4.14%
S & P 500 954.09 908.11 45.98 5.06%
Yahoo! Jewelry Index 742.54 681.46 61.08 8.96%

USA
Abazias $0.51 $0.51 $0.00 0.00%
Birks & Mayors $0.80 $0.90 -$0.10 -11.11%
Blue Nile $28.96 $27.97 $0.99 3.54%
Charles & Colvard $0.27 $0.32 -$0.05 -15.63%
Collector's Universe $3.65 $3.56 $0.09 2.53%
DGSE Companies, Inc. $1.90 $1.90 $0.00 0.00%
Fuqi International $7.38 $7.56 -$0.18 -2.38%
JCPenney $21.49 $19.50 $1.99 10.21%
Kohl's $33.86 $28.26 $5.60 19.82%
Lazare Kaplan $6.13 $5.63 $0.50 8.88%
LJ International $0.43 $0.43 $0.00 -0.02%
Macy's $11.66 $9.61 $2.05 21.33%
Man Sang $1.73 $1.61 $0.12 7.45%
Movado Group $14.29 $14.05 $0.24 1.71%
Nordstrom $15.99 $16.88 -$0.89 -5.27%
Saks $5.81 $5.68 $0.13 2.29%
Signet $10.92 $12.23 -$1.31 -10.71%
Sotheby's $9.02 $8.65 $0.37 4.28%
Tiffany $26.01 $23.80 $2.21 9.29%
Wal-Mart $54.75 $52.76 $1.99 3.77%
Zale $17.41 $14.91 $2.50 16.77%

EUROPE
Bulgari €6.00 €5.55 €0.45 8.11%
Citizen Holdings €4.17 €4.55 -€0.38 -8.35%
Esa €3.95 €4.86 -€0.91 -18.72%
Golay-Buchel CHF 1,765.00 CHF 2,100.00 -CHF 335.00 -15.95%
LVMH €51.18 €50.46 €0.72 1.43%
Pinault P-R SA €47.45 €40.93 €6.53 15.94%
Richemont SA CHF 23.96 CHF 24.60 -CHF 0.64 -2.60%
Sakha Diamonds €0.26 €0.27 -€0.01 -3.02%
Swatch Group CHF 182.30 CHF 177.10 CHF 5.20 2.94%
Theo Fennell (pence) 26.00 28.00 -€2.00 -7.14%

HONG KONG
Hang HKD 0.65 HKD 0.65 HKD 0.00 0.00%
King Fook HKD 0.35 HKD 0.39 -HKD 0.04 -9.09%
Noble Jewelry HKD 0.49 HKD 0.54 -HKD 0.06 -10.19%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 22.85 24.45 -1.60 -6.54%
Gitanjali Gems 78.10 105.20 -27.10 -25.76%
Rajesh Exports 20.15 25.65 -5.50 -21.44%
Ren. Jewellery 22.10 24.90 -2.80 -11.24%
Su-Raj Diamonds 28.45 30.05 -1.60 -5.32%
Titan 1,004.35 979.65 24.70 2.52%
Zodiac JRD 12.90 12.65 0.25 1.98%
Shantivijay Jewels 159.00 159.00 0.00 0.00%
Shukra Jewellery 4.04 4.04 0.00 0.00%
Suashish Diamonds 247.10 393.65 -146.55 -37.23%

NEW ZEALAND
Michael Hill NZD 0.70 NZD 0.66 NZD 0.04 6.06%

SINGAPORE
Gems TV Holdings SGD 0.070 SGD 0.080 -SGD 0.010 -12.50%
Sarin Technologies SGD 0.165 SGD 0.180 -SGD 0.015 -8.33%


MINING STOCKS
(pence unless noted)
Oct 30 Oct 23 Chng Chng%
USA
Anglo American $12.14 $9.83 $2.31 23.50%

CANADA
Archangel CAD 0.29 CAD 0.24 CAD 0.05 20.83%
Harry Winston CAD 10.45 CAD 9.66 CAD 0.79 8.18%
Mountain Province CAD 1.60 CAD 1.42 CAD 0.18 12.68%
Peregrine Diamonds CAD 0.38 CAD 0.25 CAD 0.13 53.06%
Rockwell Diamonds CAD 0.22 CAD 0.18 CAD 0.04 19.44%
Shore Gold CAD 0.60 CAD 0.61 -CAD 0.01 -1.64%
Stornoway Diamond CAD 0.14 CAD 0.12 CAD 0.02 12.50%
True North Gems CAD 0.10 CAD 0.10 CAD 0.00 0.00%

UK (pence)
African Diamonds 46.8 47.9 -1.1 -2.30%
BHP Billiton 997.0 823.0 174.0 21.14%
Firestone Diamonds 27.8 19.5 8.3 42.36%
Gem Diamonds 319.3 308.0 11.3 3.65%
Mano River 3.7 4.3 -0.6 -13.53%
Mwana Africa 5.5 2.5 3.0 120.00%
Namakwa Diamonds 49.3 54.0 -4.8 -8.80%
Petra Diamonds 87.3 75.0 12.3 16.33%
Rio Tinto plc 2,753.0 2,240.0 513.0 22.90%


--------------------
INDIA MARKET REPORT:
====================

---Polished: Markets are quiet due to Diwali vacation. Polished market
is worried about the status of the market after this holiday.

-1 point: Fair demand: +$250 whites; $150-$350 TTLC.

-2 point: Fair demand: +$350 whites; $125-$150 TTLB;
$125-$400 TTLC & $90-$110 Dark Browns.

2-7 point: Fair demand: +$350 whites; $100-$150 TTLB;
$125-$400 TTLC & $100-$120 Dark Browns.

8-18 point: Fair demand: +$650 whites;
$150-$200 TTLB & $200-$450 TTLC.

20 points: Fair demand: +$700 whites.

25 points: Fair demand: +$850 whites.

33 points: Fair Demand: $1400-$1600 whites.

50 points: Fair demand: $700-$800; $1000-$1,500 & +2000 whites.

75 points: Fair demand: $700-$900 & +$3000 whites.

1 carat+: Fair demand: +$1,000 whites.

Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Fair demand:
+14 pts $600-$650 whites $225-$275 whites.

20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Fair demand: $1,200-$1,400 whites.
1 carat+: Fair demand: +$1,500 whites.

Marquise: -6 point: Fair demand: $250-$350 & $400-$500 whites.
+7-18 point: Fair demand: $500-$650 & +14-point
$850-$900 whites.
20 point: Fair demand: $1,000-$1,100 whites.
25 point: Fair demand: $1,200-$1,400 whites.
33 point: Fair demand: $1,400-$1,600 whites.
50 point: Fair demand: $1,800-$2,000 whites.
75 point: Fair demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Fair demand: +$1,200 whites.

Tapers & Baguettes:
Fair demand: $600-$800 +5mm whites. $250-$325
2mm-2.5mm whites; $350-$400, 2.5mm-3mm whites;
$400-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.

Rapaport TradeWire - Friday, October 31, 2008
=============================================

Rapaport Weekly Comments: Limited trading as diamond markets try to
absorb financial crisis shock and India celebrates Diwali. U.S. Retail
sales holding up better than expected but few if any are ordering new
merchandise. Cutters and dealers highly concerned about diamond price
levels and market liquidity as banks are expected to tighten credit
access. U.S. Sept. department store sales -5% to $16.5 bil., 3Q GDP
-0.3%, jewelry price index +9%. Demand for large stones remains soft.
Fine cut carat to 2ct, SI, doing well as large retailers honor
previous commitments for holiday season. India’s Diwali holiday season
attracts jewelry demand as gold becomes more affordable but demand is
weaker than last year. De Beers 3Q08 production down -4.1% to 13.3
mil. carats. U.N. extends embargo on Ivory Coast diamonds for one year
as war in Congo intensifies. NGOs warn of increased diamond smuggling
from Venezuela and Zimbabwe ahead of Kimberley Process meeting.


--------------
ANNOUNCEMENTS:
==============

==================================-
RAPAPORT DIAMOND CONFERENCE 2008
NOW AVAILABLE ON VIDEO DVD !
==================================-

Did you predict the financial crisis?
On September 8, the Rapaport Conference did.

See and hear what the experts had to say.

Speakers and Diamond Specific Topics included:
Rajiv Mehta: Dimexon/Eurostar - Globalization
Victor Van der Kwast: ABN Amro - Banking
Rahul Kadakia: Christies - Big Stone Boom
Gerald Celente: World Economy
Martin Rapaport: Diamond Markets of the Future
Ralph Destino: Chairman GIA - Branding
Neil Goldberg: CEO Zale - Retailing
Mark Moeller: President AGS - Are Bread & Butter Goods Toast?
James Shigley: GIA Research - Treatments and Synthetics

Order now - $100 plus shipping

Email: IDC@Diamonds.Net
Telephone: +1-702-893-9400


=================================.
RAPAPORT TO SPEAK IN MUMBAI INDIA
=================================.

Martin Rapaport will discuss Diamond Prices
Thursday, November 6 at 6 PM
Taj Palace Hotel – Mumbai

Contact:
india@diamonds.net
+9122-6637-6633

========================================-
For additional information about rapaport events
http://www.diamonds.net/Events/default.aspx
========================================-


-------------
RETAIL QUOTE:
=============

"In this tough economy, jewelry has fallen down the list of priorities
for many. It's a struggle [to survive.] But I'm determined to make it
work by adding engraving services and offering designer products and
quality custom pieces."

---Brenda Cohen
Berwick Jewelers, Savannah, Georgia


-----------
WORLD NEWS:
===========

---Rapaport: Prices Under Pressure, Expected to Decline

Rapaport chairman Martin Rapaport spoke at the Ramat Gan diamond
bourse about the current state of the diamond business and explained
that diamond prices are under pressure and expected to decline. His
comments were met with appeals from diamond manufacturers and dealers
to freeze the Rapaport Price List or stop publishing it until after
Christmas. Rapaport replied that he could not do this, and would
publish his opinion of diamond prices on a weekly basis as he has for
the past 30 years. Rapaport stressed his ethical obligation to publish
prices even if they were lower.


---Gubelin Gem Lab Receives HPHT Treated Diamond with Fake GIA Report

The Gubelin Gem Lab stated that it had recently received a diamond for
testing that displayed indications of HPHT treatment, but whose
accompanying GIA certificate didn't mention treatment. Gubelin Gem Lab
suspected the certificate was a forgery "based on the appearance and
content of genuine GIA reports." The diamond -- D Color, IF clarity,
Excellent Cut grade -- exceeded 2 carats.


---UN Extends Diamond Sanctions on Cote d'Ivoire

Cote d'Ivoire will face sanctions on its diamond trade until at least
October 31, 2009. The United Nations Security Council unanimously
approved a resolution drafted by France that extends the ban on
selling arms to Cote d'Ivoire and against buying rough diamonds for
another year. The Council made presidential elections part of the
deal. It will review sanctions "no later than three months after the
holding of open, free, fair and transparent presidential elections."


---PAC and Global Witness Call for Swift Action to Address KP Flaws

As the Kimberley Process (KP) rough diamond certification scheme’s
fifth year draws to a close, the trafficking of conflict and illicit
stones looks more like a dangerous rule than an exception. In a report
released today, Global Witness and Partnership Africa Canada (PAC)
warned that the illicit trade in rough diamonds remains one of the
greatest threats facing the Kimberley Process. The report also claims
that the cutting and polishing industry is completely outside KP
scrutiny and is currently a largely exploited loophole.


---USA: GDP, Personal Spending Drop in 3Q08

Real gross domestic product (GDP) in the United States fell at an
annual rate of 0.3 percent in third quarter. Second quarter GDP rose
2.8 percent, the government reported. The price index for gross
domestic purchases increased 4.8 percent in the third quarter,
compared with an increase of 4.2 percent in the second quarter. Real
personal consumption expenditures decreased 3.1 percent in the third
quarter, in contrast with an increase of 1.2 percent in the second
quarter.


---Credit Markets Signal Tighter Squeeze

The credit markets showed renewed signs of stress as investors,
worried about plunging stocks and the possibility of companies
defaulting on their debt, fled once again to the safety of Treasury
bills. Another dip in bank-to-bank lending rates offered little
relief. Fears are growing that the world could suffer a serious,
widespread recession, and large investors -- particularly hedge funds
-- are responding to the turmoil by “deleveraging” or trying to pay
off their debts. Deleveraging involves selling stocks and other assets
and, in turn, causing them to plunge in value.


---India: Gold Sales Jump in October

Gold sales have picked up phenomenally after a fall in prices to the
INR 12,000-level per 10 grams ($240.50.) The consistent steep decline
in equity markets has boosted the demand for the yellow metal as a
safe investment. According to the study, about 50 tons of the metal
was consumed during October 1-20, compared to more than 80 tons sold
in the whole of the October-December quarter in 2007.


---Rapaport Broadcast News

The Uniform Commercial Code or UCC financial statement form is a
useful tool for memos/consignments. In this segment, UCC experts
discuss how diamond dealers can use the form to protect themselves in
transactions. Partnership Africa Canada (PAC) stepped up its
monitoring of the diamond industry ahead of next week’s Kimberley
Process plenary and found issues of non-compliance remain troublesome.
PAC's Ian Smillie discusses what he hopes the meeting accomplishes.

http://www.diamonds.net/News/NewsItem.aspx?ArticleID=23880


------------------------
RETAIL & WHOLESALE NEWS:
========================

---Shrenuj Profits -50% in 2Q

Diamond and jewelry manufacturer Shrenuj & Company's profits fell 50
percent in the company's second fiscal quarter as sales fell and
expenses rose. Consolidated net profits fell 49.8 percent to INR 57
million ($1.15 million) in the three months ending September 30, 2008.
Net sales declined 4 percent to INR 3.42 billion ($69.22 million) and
total expenses fell 3 percent to INR 3.20 billion ($64.66 million).


---Suashish Diamonds 2Q Sales +36%, Reports Net Loss

Suashish Diamonds moved into the red in the second quarter of its
fiscal 2008-09, largely because of higher expenses. The Mumbai-based
Diamond Trading Company sightholder posted a net loss of INR 292.71
million ($5.9 million) in the three months ending September 30, 2008,
down from a profit of INR 174.36 million ($3.53 million) one year ago.
Net sales rose 36 percent to INR 2.91 billion ($58.98 million.) Its
expenses grew 46 percent to INR 2.96 billion ($59.93 million.)


---Su-Raj Diamonds 2Q Profits -23%

Su-Raj Diamonds and Jewellery Limited reported that net profits fell
23 percent to INR 94.8 million ($1.9 million,) in the second fiscal
quarter ended September 30, 2008. The decline came despite a 25
percent rise in net sales to INR 5.37 billion ($108.55 million) during
the period. Operating expenses rose 27 percent to INR 5.24 billion
($105.96 million.)


---Classic Diamonds Profits -54% in Fiscal 2Q

India-based company Classic Diamonds' net profits fell 54 percent from
a year before to INR 35.66 million ($712,020) in the three months
ending September 30, 2008. Sales for the second fiscal quarter rose 16
percent to INR 2.03 billion ($40.6 million,) boosted by strong
revenues at the jewelry division, up 105 percent to INR 621.61 million
($12.41 million,) while diamond division revenues fell 21 percent to
INR 1.41 billion ($281.84 million.)


---Chopard Sales +11% in First Nine Months

Sales of Swiss luxury watch and jewelry manufacturer Chopard in Italy
in the first nine months of 2008 climbed 10.5 percent on the year. The
company's sales in Italy in the third quarter alone increased 16.4
percent on the year.


---Bijou Brigitte 9mos Sales +3%, Profits -4%

Bijou Brigitte fashion jewelry reported a 3 percent increase in sales
for the first nine months of 2008 to EUR 269.6 million ($350 million.)
Profits fell 3.7 percent to EUR 54.5 million ($71 million.) The
retailer opened 58 new shops across Germany during the first three
quarters and closed 13 underperforming stores.


---Kiran Jewels Initiates Chpt. 7 Against Dunkin's

Kiran Jewels Inc. initiated a Chapter 7 involuntary petition today
against retailer Dunkin's Diamonds Inc. of Ohio and Florida. According
to papers filed in the United States Bankruptcy Court for the Southern
District of Ohio, Kiran stated the debtor had not paid for goods
delivered. At press time there was no further information on the case.
Dunkin's corporate offices were already closed for the day and its
principal could not be reached at home. Earlier this month, The
Advocate (of Newark, Ohio,) reported that Dunkin's planned to close
some stores, including one at the Indian Mound Mall.


---RBC Slashes Harry Winston Target Price

RBC Capital Markets slashed its outlook for Harry Winston Diamond
Corporation, as the global economic downturn is expected to hurt
prices of rough diamonds. The investment analysts cut the target price
on Harry Winston shares from $35 a share to $14 for the next 12
months. Despite its dramatic revaluation, RBC said it still sees
“compelling value” in the company for long-term investors. RBC’s chief
concerns about Harry Winston center on a dramatic decline in rough
diamond sales revenue from the Diavik mine -- Harry Winston’s sole
mining operation, in which it owns a 40 percent stake.


---A.M. Best Rates Jewelers Mutual 'A+ Superior'

Jewelers Mutual Insurance Company, for the 22nd consecutive year,
earned an A+ Superior rating from A.M. Best Company. The A+ Superior
rating reflects the overall financial strength of Jewelers Mutual and
consistent profitability. The A.M. Best rating provides a solid
measure of assurance that a company has the capacity to pay claims.
A.M. Best is an independent rating agency widely trusted for its
benchmark ratings when assessing insurers’ financial strength.


---Dimexon Launches China Operation

Dimexon International Holdings launched operations in China. The
company opened offices in the Shanghai Diamond Exchange (SDE,) which
will be managed by Jiaqi Zhao. He will report directly to Dimexon’s
regional office in Hong Kong. Rajiv Mehta, Dimexon's chief executive
officer said the new office will enhance the company's distribution
network in the region and allow it to work more closely with Chinese
retailers and jewelry manufacturers.


---Neil Lane Jewelry Opens in Los Angeles

Jewelry designer Neil Lane opened his flagship store in Los Angeles.
The Neil Lane Jewelry store is located at 708 N. La Cienega Boulevard,
near Melrose Place. Lane has become a legendary figure in Hollywood
for his designs and is an avid collector of fine jewelry. The store
presents a luxurious space featuring display cases made of white oak
and Portuguese limestone, accented with a series of plush offset
panels of ultra-suede. Architect David Montalba designed the space to
create an intimate environment without compromising the glamour and
polish of the Neil Lane brand.


---U.S. Sept. Jewelry Price Index +9%

The year-to-year consumer price index for jewelry in the United States
during the month of September rose 9.3 percent to 156.56 points,
according to statistics provided by the Bureau of Labor Statistics
(BLS). This rate -- based on a reference of average prices in 1986 set
at 100 points -- was almost two points higher than in August.

For the watch and jewelry categories combined, the year-to-year
difference was an increase of 8.2 percent in the United States, at
148.85 points. The September jewelry price index registered its
second-highest level of the year, only 0.03 points behind that
reported in July. During the January to September 2007 cycle, the
index averaged about 142 points, but this year it has risen to an
average of 154.


---U.S. & U.K. Dept. Store Sales Drop

Year-to-year department store sales in the United States contracted
5.3 percent to $16.517 billion in September. Spending at department
stores during September dropped 1.5 percent from the figure reported
in August. For the first nine months of 2008, department store sales
have slipped 3.4 percent to $137.931 billion.

In the U.K., September sales for non-specialized stores (considered
department stores) fell 2.4 percent, but specialized store sales rose
4.6 percent.


------------
WHO IS NEWS:
============

---Jewelers Mutual Appoints New Sales VP

Jewelers Mutual appointed Patrick Drummond as its new vice president
of sales and marketing. Drummond will head the company's marketing
efforts and its nationwide sales team. He joined Jewelers Mutual two
years ago and comes to his new role with 15 years experience in the
insurance industry, the company said.


---Szul, Model Settle $5M Video Lawsuit

A model who writhed and moaned suggestively on a bed in a New York
jewelry company's sexy video ad settled her $5 million lawsuit against
the company. The model said she didn't consent to use of her image "to
simulate a female having an orgasm." The Internet video attracted more
than 700,000 hits before it was removed from YouTube in January. The
accord came to light Monday after a Manhattan judge filed a notice
saying the "action has settled." A joint statement by the model's
lawyer, Kevin Mulhearn, and lawyers for Szul ("zool") Jewelry Inc.
said that the terms of the settlement were confidential.


-------------
GENERAL NEWS:
=============

---Dubai: DMCC, Gov't Entity Agree to Three-Year Export Alliance

The Dubai Export Development Corporation (EDC,) the governmental body
charged with promoting exports from the emirate, announced an alliance
with the Dubai Multi Commodities Centre (DMCC.) The parties expect the
three-year agreement to increase demand for exports of various DMCC
commodities. They will establish a joint management committee to
oversee EDC's provision of a number of specific services, including
export preparation, export facilitation and international trade
assistance to DMCC member companies.


---UK: Birmingham Assay Office Sponsors 'Centrepiece 2008'

The Birmingham Assay Office will sponsor Centrepiece 2008. Running
from November 11 through December 23, the event brings together
contemporary jewelry designers, makers and silversmiths based in West
Midlands. This year the work will be exhibited and available for sale
from two locations: Symphony Hall and Birmingham Town Hall.


--------------------
DIAMOND MINING NEWS:
====================

---De Beers Production -4% in 3Q08

De Beers’ production fell 4.3 percent to 13.1 million carats, in the
quarter ended September 30, 2008. For the first nine months of the
year, De Beers’ production fell 4.1 percent to 37.3 million carats.
The drop in production came as a result of lower recoveries at De
Beers’ flagship Orapa mine in Botswana and at the Venetia mine in
South Africa. The company said that medium- and long-term growth would
be driven by the market fundamentals of its core commodities, with
constrained supply and growing demand led by the industrialization of
China and other developing countries.


---Namakwa Diamonds Expects Continued Price Volatility

Namakwa Diamonds expects diamond prices to remain volatile as the
current global economic uncertainty continues. The company, which
operates in the mining and polished diamond segments of the industry,
observed significant price decreases during August and September from
rough producers that sell exclusively on tender. The decreases were a
result of the general fall in commodities prices, uncertainty in
financial markets, lower liquidity and the threat of global recession,
the company explained.

Namakwa posted a net loss of $19.60 million in the second half of its
fiscal year ending August 31, 2008, as high operating costs took a
toll on operations. Reliable comparable figures were not provided
because this quarter closed the company's first fiscal year since the
company’s listing on the London Stock Exchange in December 2007.
Revenues of $29.30 million were reported on the back of higher
production and stronger pricing for rough and polished diamonds during
the six-month period.


---RBC Note: Diamond Prices Under Strain

In a price target revision note on Petra Diamonds, RBC Capital Markets
lowered its diamond prices forecast by 10 percent a year for the next
two years, to reflect the group's view that rough diamonds would face
demand and pricing pressures as a result of weaker sales and high debt
in cutting centers. RBC Capital Markets did not factor in any value
for exploration since it does not believe the market will accord these
assets any material value at present. This penalizes Petra as it has
an extensive exploration portfolio in Angola and Botswana, but Petra
remains one of RBC Capital Markets’ preferred names in the diamond
sector.


---Stornoway: Formal Review Confirms Successful Diamond Mining Outlook
for Renard

Stornoway Diamond Corporation's economic study for the Renard Diamond
Project improved the project's outlook and the company's confidence in
its construction. The Renard project is located at the Foxtrot
Property in north-central Québec. The report found mineral resources
comprising 7 million carats of "indicated resource" (11.6 million tons
at an average grade of 60 carats per hundred tons (cpht)) and 4.5
million carats of "inferred resource" (7.2 million tons at an average
grade of 63 cpht).


---Rockwell Sale Receives Strong Premiums for Three Yellow Diamonds

Rockwell Diamonds Inc. sold three "exceptional" yellow diamonds to
buyers in southeast Asia. These stones were recovered from Rockwell's
Makoenskloof project and Wouterspan mine, located in the Middle Orange
River area of South Africa, and were cut and polished by the Steinmetz
Diamond Group. The finished stones included one 102-carat vivid yellow
diamond cut from a 212-carat yellow rough diamond, and two matching
10-carat vivid yellow diamonds cut from a 36-carat yellow rough
diamond. The sale of the larger stone achieved a 50 percent premium
over and above the rough diamond value realized for the original
212-carat stone. The matching pair achieved an 80 percent premium over
and above the rough diamond value realized for the original 36-carat
stone. The sale of the three stones resulted in additional revenues of
approximately $2 million.


---TanzaniteOne to Issue 'B' Shares in Attempt to Frustrate Gemfields
Takeover

Miner TanzaniteOne is trying to sabotage a hostile takeover bid from
rival Gemfields in an increasingly ugly battle for control between the
two gemstone groups. Tanzanite, which has attacked Gemfields' GBP 33
million ($51.5 million) offer for discriminating against some
shareholders, is issuing ''B'' shares in a subsidiary company to
frustrate the unsolicited bid. Gemfields is trying to seize control of
Tanzanite by buying out other shareholders on a ''first come, first
served'' basis until its existing 18.5 percent stake climbs above 50
percent.


---West African Diamonds Reflects on Tumultuous Year

The current economic crisis is hitting junior resources hard, and this
has resulted in a tumultuous year for West African Diamonds (WAD.) It
was spun off from African Diamonds in order to focus on diamond
exploration projections in Sierra Leone and Guinea. The share price
has shed 70 percent since its first listing, to open trade this week
at 7.35 pence a share. The company reported a net loss of GBP 220,066
($338,626) for the year ending April 30, 2008, compared with a loss of
GBP 692,260 ($1.06 million) the previous fiscal year, which had
included a GBP 393,713 ($605,313) listing expense.


-----------
ECON WATCH:
===========

For week ending October 30, 2008


Oct 30 Oct 23 Chng

$1 = Euro 0.773 0.774 0.000
$1 = Rupee 49.3 50.0 -0.7
$1 = Israel Shekel 3.76 3.83 -0.07
$1 = Rand 9.93 11.03 -1.10
$1 = Canadian Dollar 1.21 1.25 -0.04


Oct 30 Oct 23 Chng
Precious Metals
Gold $736.70 $721.90 $14.80
Platinum $836.00 $823.00 $13.00

Oct 30 Oct 23 Chng Chng%
Stock Indexes
BSE 9,044.51 9,771.70 -727.19 -7.44%
Dow Jones Avg. 9,180.69 8,691.25 489.44 5.63%
FTSE 4,291.65 4,087.83 203.82 4.99%
Hang Seng 14,329.85 13,760.49 569.36 4.14%
S & P 500 954.09 908.11 45.98 5.06%
Yahoo! Jewelry Index 742.54 681.46 61.08 8.96%

USA
Abazias $0.51 $0.51 $0.00 0.00%
Birks & Mayors $0.80 $0.90 -$0.10 -11.11%
Blue Nile $28.96 $27.97 $0.99 3.54%
Charles & Colvard $0.27 $0.32 -$0.05 -15.63%
Collector's Universe $3.65 $3.56 $0.09 2.53%
DGSE Companies, Inc. $1.90 $1.90 $0.00 0.00%
Fuqi International $7.38 $7.56 -$0.18 -2.38%
JCPenney $21.49 $19.50 $1.99 10.21%
Kohl's $33.86 $28.26 $5.60 19.82%
Lazare Kaplan $6.13 $5.63 $0.50 8.88%
LJ International $0.43 $0.43 $0.00 -0.02%
Macy's $11.66 $9.61 $2.05 21.33%
Man Sang $1.73 $1.61 $0.12 7.45%
Movado Group $14.29 $14.05 $0.24 1.71%
Nordstrom $15.99 $16.88 -$0.89 -5.27%
Saks $5.81 $5.68 $0.13 2.29%
Signet $10.92 $12.23 -$1.31 -10.71%
Sotheby's $9.02 $8.65 $0.37 4.28%
Tiffany $26.01 $23.80 $2.21 9.29%
Wal-Mart $54.75 $52.76 $1.99 3.77%
Zale $17.41 $14.91 $2.50 16.77%

EUROPE
Bulgari €6.00 €5.55 €0.45 8.11%
Citizen Holdings €4.17 €4.55 -€0.38 -8.35%
Esa €3.95 €4.86 -€0.91 -18.72%
Golay-Buchel CHF 1,765.00 CHF 2,100.00 -CHF 335.00 -15.95%
LVMH €51.18 €50.46 €0.72 1.43%
Pinault P-R SA €47.45 €40.93 €6.53 15.94%
Richemont SA CHF 23.96 CHF 24.60 -CHF 0.64 -2.60%
Sakha Diamonds €0.26 €0.27 -€0.01 -3.02%
Swatch Group CHF 182.30 CHF 177.10 CHF 5.20 2.94%
Theo Fennell (pence) 26.00 28.00 -€2.00 -7.14%

HONG KONG
Hang HKD 0.65 HKD 0.65 HKD 0.00 0.00%
King Fook HKD 0.35 HKD 0.39 -HKD 0.04 -9.09%
Noble Jewelry HKD 0.49 HKD 0.54 -HKD 0.06 -10.19%
Tse Sui Luen HKD 0.83 HKD 0.83 HKD 0.00 0.00%

INDIA (rupee)
Classic Diamond 22.85 24.45 -1.60 -6.54%
Gitanjali Gems 78.10 105.20 -27.10 -25.76%
Rajesh Exports 20.15 25.65 -5.50 -21.44%
Ren. Jewellery 22.10 24.90 -2.80 -11.24%
Su-Raj Diamonds 28.45 30.05 -1.60 -5.32%
Titan 1,004.35 979.65 24.70 2.52%
Zodiac JRD 12.90 12.65 0.25 1.98%
Shantivijay Jewels 159.00 159.00 0.00 0.00%
Shukra Jewellery 4.04 4.04 0.00 0.00%
Suashish Diamonds 247.10 393.65 -146.55 -37.23%

NEW ZEALAND
Michael Hill NZD 0.70 NZD 0.66 NZD 0.04 6.06%

SINGAPORE
Gems TV Holdings SGD 0.070 SGD 0.080 -SGD 0.010 -12.50%
Sarin Technologies SGD 0.165 SGD 0.180 -SGD 0.015 -8.33%


MINING STOCKS
(pence unless noted)
Oct 30 Oct 23 Chng Chng%
USA
Anglo American $12.14 $9.83 $2.31 23.50%

CANADA
Archangel CAD 0.29 CAD 0.24 CAD 0.05 20.83%
Harry Winston CAD 10.45 CAD 9.66 CAD 0.79 8.18%
Mountain Province CAD 1.60 CAD 1.42 CAD 0.18 12.68%
Peregrine Diamonds CAD 0.38 CAD 0.25 CAD 0.13 53.06%
Rockwell Diamonds CAD 0.22 CAD 0.18 CAD 0.04 19.44%
Shore Gold CAD 0.60 CAD 0.61 -CAD 0.01 -1.64%
Stornoway Diamond CAD 0.14 CAD 0.12 CAD 0.02 12.50%
True North Gems CAD 0.10 CAD 0.10 CAD 0.00 0.00%

UK (pence)
African Diamonds 46.8 47.9 -1.1 -2.30%
BHP Billiton 997.0 823.0 174.0 21.14%
Firestone Diamonds 27.8 19.5 8.3 42.36%
Gem Diamonds 319.3 308.0 11.3 3.65%
Mano River 3.7 4.3 -0.6 -13.53%
Mwana Africa 5.5 2.5 3.0 120.00%
Namakwa Diamonds 49.3 54.0 -4.8 -8.80%
Petra Diamonds 87.3 75.0 12.3 16.33%
Rio Tinto plc 2,753.0 2,240.0 513.0 22.90%

Rapaport TradeWire - Friday, November 7, 2008
=============================================

Rapaport Weekly Comments: Obama landslide victory signifies major U.S.
social and generational shift. Nov. DTC sight estimate halved to $300
mil. as rough prices plummet and sightholders delay purchases to next
year. Despite Diwali holiday, Oct. Indian gold imports drop 30% to
1.55 mil. oz. as rupee weakens 5% against U.S. dollar. Israel Oct.
rough imports down 53% to $208.5 mil. and polished exports down 46% to
$324.61 mil. Belgium Sept. rough diamond imports up 34% to $1.12 bil.
and polished exports up 41% to $1.39 bil. Dubai 1H08 polished imports
double to $2.94 bil. and polished exports up 153% to $2.35 bil. Japan
Sept. polished imports down 14% to $59.91 mil. Gitanjali Gems 2Q sales
up 14% to $268.81 mil. and profits up 15% to $10.19 mil. Blue Nile 3Q
sales down 3% to $65 mil. and profits down 21% to $2.3 mil.; U.S.
sales down 7% to $58.5 mil. and int’l sales up 53% to $6.9 mil. Petra
Diamonds sells blue 39.19 carat diamond for $8.8 mil. ($224,547/
carat).


--------------
ANNOUNCEMENTS:
==============


===================
NEW PRICE LIST INFO
===================

Rapaport Will Publish A New RapNet Price List With
Trading Network’s Best and Average Asking Prices

Read the full announcement:

http://www.diamonds.net/rapnetpricelist/RapnetNewPriceList-Nov08.pdf



================================
RAPAPORT DIAMOND CONFERENCE 2008
NOW AVAILABLE ON VIDEO DVD !
================================

Did you predict the financial crisis?
On September 8, the Rapaport Conference did.

See and hear what the experts had to say.

Speakers and Diamond Specific Topics included:
Rajiv Mehta: Dimexon/Eurostar - Globalization
Victor Van der Kwast: ABN Amro - Banking
Rahul Kadakia: Christie's - Big Stone Boom
Gerald Celente: World Economy
Martin Rapaport: Diamond Markets of the Future
Ralph Destino: Chairman GIA - Branding
Neil Goldberg: CEO Zale - Retailing
Mark Moeller: President AGS - Are Bread & Butter Goods Toast?
James Shigley: GIA Research - Treatments and Synthetics

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Email: IDC@Diamonds.Net
Telephone: +1-702-893-9400


---------------
RAPAPORT EVENTS
===============

Please check our events page to view
Rapaport exhibiting locations.

http://www.diamonds.net/Events/default.aspx


-------------
RETAIL QUOTE:
=============

"People that shop luxury, who demand a certain brand, they just don't
trade down. They simply do without until they feel comfortable to
purchase again."

---Marie Driscoll
Standard & Poor's


-----------
WORLD NEWS:
===========

---DTC Nov. Sight Significantly Lower at $300M

The Diamond Trading Company's (DTC) November sight was valued
significantly lower than in previous years, as sightholders requested
that De Beers defer supply until after Christmas. The sight had an
estimated value of $300 million, compared with $530 million in the one
held one year ago. Observers reported no change in prices and no
significant adjustment to the assortment of goods.


---RBC: Gloomy Outlook for Diamond Cos., Investors

RBC Capital Markets detailed issues facing the diamond trade: Diamond
trading center debt is in excess of $15 billion; prices at recent
rough tenders held by BHP Billiton and Etruscan Diamonds fell well
below average; and major producers are responding to lower demand for
rough by cutting back offered supplies. The mood in the industry is
gloomy, made more severe by police raids in Antwerp. Until consumer
confidence and wealth begin to recover, RBC noted, the market for the
raw materials of luxury goods like diamonds will show slower demand
and lowered prices. Shares in diamond firms have declined 70 percent
on average from their highs, with exploration firms in need of funding
fairing worst; retailers have been impacted least.


---India's Diamond Inventory Grows as Global Demand Weakens

India’s diamond industry is staring at large inventories due to
falling demand in its biggest markets in the U.S., Europe and Japan.
Imports of rough diamonds grew 19 percent between April and September
of this year to INR 251.1 billion ($5.17 billion) compared with a year
ago. Although exports of polished have risen by 21.6 percent to INR
335.2 billion ($6.9 billion), the outlook is poor. The demand for
processed diamonds has dropped 10-15 percent since September, when
Christmas orders usually start picking up. The Gem & Jewellery Export
Promotion Council called upon diamond miners to restrict the release
of uncut diamonds in the market to offset the current excess supply.


---Counterfeit GIA Reports Pose Risk - Verify Authenticity

Counterfeit Gemological Institute of America (GIA) grading reports
have been found in the marketplace. In some cases, fraudulent reports
use the actual GIA report numbers and grading information of other
GIA-graded diamonds. These forgeries have been found accompanying HPHT
diamonds or natural diamonds of a lower grade that resemble -- or have
been re-cut to match -- the real diamond to which that report number
belongs. Dealers can verify reports online with GIA Report Check
www.gia.edu/reportcheck/


---Israel to Hold Vice Chairmanship of Kimberley Process

Israel was elected vice chair of the Kimberley Process for 2009 and
will therefore take the helm of the organization in 2010. Elections
were held on the opening day of the annual plenary. Namibia takes
control of the organization from India on January 1, 2009.

India put forward a proposal to set up a permanent panel to address
disputes arising due to human and administrative errors while issuing
Kimberley Process Certificates to countries mining and exporting rough
diamonds.


---De Beers Confident of Value in Diamonds During Christmas

De Beers believes diamonds have a unique place in the current
environment even though global financial distress is cutting into
consumer wealth and confidence. De Beers' Christmas marketing plans
include print, online and television spots meant to show how the
diamond is an icon of enduring value. The campaign is expected to
reach 97 million consumers in the U.S. at least six times during the
season.


---Botswana's Diamond Exports Threatened By Financial Crisis

If the current global economic recession and financial market turmoil
persist for another eight months, Botswana's real economy will be
heavily affected, forcing the government to adjust consumption and
expenditure patterns. Analysts believe that Botswana's economy, which
is heavily reliant on diamond export revenues, will be hard hit by the
slowdown of the global economy, as diamond sales will decline sharply.


---Rapaport Broadcast News

The mood in Israel is rather gloomy as trading activity remains well
below historical norms. The Natural Color Diamond Association (NCDIA)
predicts demand to hold its own due to the exposure natural color
stones are receiving at auction and at red carpet events.

http://www.diamonds.net/news/NewsItem.aspx?ArticleID=23978



-------------
DIAMOND STATS
=============

---Israel Oct. Imports/ Exports (YTD=2008 Year to Date)

2008 %Chng YTD %Chng
($Mil) 2007 ($Mil) 2007

Polished Exports $325 -46% $5,812 -2%
Polished Imports $278 -44% $3,787 8%
Net Polished $46 -55% $2,025 -16%

Rough Imports $209 -53% $4,165 2%
Rough Exports $144 -59% $3,173 11%
Net Rough $64 -30% $991 -20%

Diamond Account -$18 N/A $1,034 -13%



---Belgium Sept. Imports/ Exports (YTD=2008 Year to Date)

2008 %Chng YTD %Chng
($Mil) 2007 ($Mil) 2007

Polished Exports $1,394 41% $9,793 25%
Polished Imports $1,311 76% $9,600 33%
Net Polished $83 -66% $193 -69%

Rough Imports $1,129 34% $9,060 19%
Rough Exports $1,102 35% $9,288 10%
Net Rough $17 6% -$228 73%

Diamond Account $66 -71% $422 -72%



---Japan’s Sept. Polished Diamond Imports -14%

Japan’s polished diamond imports fell 14 percent to $59.91 million in
September. The country’s imports of gold jewelry rose 4 percent to
$61.91 million, platinum jewelry imports soared 59 percent to $49.14
million for the month, silver jewelry imports fell 24 percent to
$18.23 million, and other precious metals rose 160 percent to
$808,000.



------------------------
RETAIL & WHOLESALE NEWS:
========================

---Oct. Retail Sales Plunge

October sales at Neiman Marcus fell 25.3 percent to $286 million, and
same-store sales fell 26.8 percent to $281 million. Saks’ monthly
same-store sales dropped 16.6 percent. Its net sales fell 18.6 percent
to $219 million. Nordstrom’s same-store sales fell 15.7 percent in
October, and its total sales dropped 15.5 percent to $529 million.
Macy's same-store sales fell 6.3 percent and total sales fell 7
percent to $1.72 billion. J. C. Penney's same-store sales decreased 13
percent, and total sales fell 11.8 percent to $1.361 billion. Kohls'
October same-store sales fell 9 percent, and total sales fell 4.8
percent to $1.21 billion. Same-store sales fell 1 percent at Costco,
where net sales rose less than 2 percent to $5.3 billion.


---U.S. 3Q Online Jewelry Sales -11%

The jewelry and watch segment was among the weakest performers in the
United States online retail market during the third quarter of 2008,
e-commerce research company comScore reported. U.S. online sales of
jewelry and watches fell 11 percent during the three months ending
September 30, 2008, compared with the same period in 2007.


---Hong Kong Sept. Jewelry, Watch Sales -4%

Hong Kong's retail sales during September rose almost 7 percent,
compared with one year ago, to $2.7 billion, and the government
revised its August retail sales increase 0.2 percentage points lower,
to 10.2 percent. The government reported that sales of jewelry,
watches and clocks fell 3.5 percent following a 2.4 percent increase
for this category in August.


---Signet 3Q Sales -7%

Signet Jewelers reported that group sales fell 7.3 percent to $629.4
million in its third fiscal quarter. Same-store sales dropped 6.6
percent during the period. The quarter saw U.S. sales fall 4.3 percent
to $467.2 million, while same-store sales declined 7.9 percent. U.K.
sales dropped 14.9 percent to $162.2 million, spurred by sharper
declines in October. Same-store sales there fell 2.4 percent.


---Blue Nile 3Q U.S. Sales -7%, Company Profits -21%

Blue Nile Inc.'s profits fell 21 percent to $2.335 million during the
third quarter. Sales slipped 3 percent to $65.4 million. Within the
U.S., third-quarter sales dropped 7 percent to $58.5 million, but
international sales rose 53 percent to $6.9 million. Gross profit for
the third quarter was $13.3 million, so, as a percent of net sales,
gross profit increased to 20.3 percent, compared with only 19.8
percent one year ago. Blue Nile declined to provide financial guidance
for the fourth quarter and the fiscal year, citing the economic
climate, combined with "a lack of visibility into expectations for the
upcoming holiday season."


---Gitanjali 2Q Profits +15%

Gitanjali Gems reported that its net profits grew 15 percent to INR
489.52 million ($10.19 million) in its fiscal second quarter spurred
by strong growth at the company’s jewelry unit. Net sales for the
period rose 14 percent to INR 12.91 billion ($268.81 million). Jewelry
revenues grew 37 percent to INR 7.22 billion ($150.85 million) and
diamond revenues increased 15 percent to INR 7.23 billion ($151
million).


--Consumers Cut Christmas Shopping Budget

The first expected annual ISCS-Goldman Sachs Holiday Survey showed
that this holiday season 37 percent of consumers intended to scale
back their holiday spending -- 10 percent more than said so in 2007,
and the highest percentage since ICSC started asking the question. The
survey found that the average spending this holiday season would
amount to $1,154 per household, $533 of that on gifts. According to a
separate survey conducted by the NRF, U.S. consumers plan to spend
$832.36 on holiday-related shopping, an increase of only 1.9 percent
over last year. NRF expects holiday sales to rise 2.2 percent to
$470.4 billion.


---De Beers Opens in South Coast Plaza

De Beers Diamond Jewellers opened its ninth store in North America in
Costa Mesa, California. The store is located at the South Coast Plaza
in Costa Mesa and covers an area of 1,600 sq ft. De Beers' South Coast
Plaza store features new collections designed by Raphaele Canot, De
Beers' creative director, including Talisman, Amulets, Ice on Fire and
Radiance.


---Christie’s Stresses Strong Demand for Colored Diamonds

Christie’s expressed its confidence in the colored diamond market
ahead of its London jewels sale in December. Demand for colored
diamonds remains high, Christie's said, citing its recent record sale
in Geneva of a 13.39-carat fancy intense blue diamond for $8.9
million. The auction house is hoping to emulate that feat when it
presents the Wittelsbach Diamond, a rare 35.56-carat grayish-blue
diamond, VS2 clarity, at "Jewels: The London Sale," with an estimated
value of about $15 million.


---De Beers Launches Forevermark Website

Forevermark, the marketing brand of De Beers, launched its new
consumer website, www.forevermark.com, which allows users and
diamantaires the opportunity to create a profile for their Forevermark
stones with details of the diamonds. It features information about the
Forevermark concept and its new grading service. De Beers is also
using the website to offer a preview of its first Forevermark
advertising campaign, which will be launched later this month in
Chinese.


---Blue Nile Enhances Search for Engagement Ring Settings

Online retailer Blue Nile introduced an enhanced search process for
engagement ring settings that allows customers to choose from the
company’s four collections: classic, sidestones, vintage and color.
Customers can also search by metal type and price. The new search
feature categorizes Blue Nile's 150 engagement ring settings to help
customers select a style.


---Jewelry Television Spices Up Ornaments with Gemstones

Jewelry Television partnered with Joy To The World Collectibles on a
proprietary collection of gemstone-encrusted Christmas ornaments. The
ornament designs use garnet, peridot, citrine, white topaz, amethyst
and other fine gemstones. They are handmade from European glass and
custom-cut glitter. Using a traditional and labor-intensive process,
each ornament takes about seven days to complete. The collection will
be available on the Jewelry Television shopping network in November,
as well as at http://www.jewelrytelevision.com/glitter.


---New York: Sales of High-end Jewelry Drop

Jewelers are worried about the upcoming holiday season. Demand for
jewelry has waned, while a wobbly labor market and tighter credit have
consumers unable to finance expensive purchases. Analysts say that
even the affluent are becoming more frugal, feeling the pinch of a
weak economy but not inclined to buy cheaper brands. The economic
slowdown in Europe and a stronger U.S. dollar suggest that help will
not be coming from overseas. Jewelers are also hoping sales of
engagement rings hold steady, but while a weak economy isn't likely to
stop couples from getting engaged, it may dampen how much a suitor can
spend.


------------
WHO IS NEWS:
============

---Accredited Gemologists Assoc. to Honor Smith in Feb.

Christopher Smith, vice president and chief gemologist at American
Gemological Laboratories (AGL) in New York City, will receive the 2009
Antonio C. Bonanno Award For Excellence in Gemology from the
Accredited Gemologists Association on February 4, 2009. Smith
spearheads the growth and development of AGL’s colored-stone services.
The award, which includes a prize of $2000, is a tribute to Smith's
commitment to high ethical standards, and to his career as a whole,
which is devoted to laboratory work, applied gemological research,
advocacy of proper disclosure and education.


-------------
GENERAL NEWS:
=============

---Police Recover $4M Ruby

Police in Austria recovered a $4.1 million ruby (Prince of Burma)
after a raid on a suspected gang of international jewel thieves. Two
men and a woman were arrested in the raid and the three are suspected
of stealing the ruby along with diamonds and other gems recovered in
the raid from a German jewelry dealer in Milan, Italy in August.


---Police Bust Group That Fooled Diamond Buyers with Fake Stones

A suspected international diamond smuggling syndicate alleged to have
conned millions of rands out of diamond buyers operating across the
country -- and involving corrupt police officers -- has been busted in
South Africa. The undercover operation, which began two years ago,
ended yesterday when police arrested the remainder of 34 suspects.
Police seized more than ZAR 6 million ($588,000) worth of fake
diamonds the syndicate used to con diamond buyers out of their money.


---Dubai to Showcase 478ct Diamond from Letseng Nov. 8

Gem Diamonds and the Dubai Multi Commodities Centre will showcase a
478-carat white diamond, recovered at Letseng in September, at the
Middle East China Diamond and Jewellery Summit on November 8 at the
Atlantis Hotel, Palm Jumeirah. The diamond ranks as the 20th-largest
rough diamond ever to be recovered, and the third-largest rough
diamond this century.


---Industry Celebrate $200M Panama Diamond Exchange Project

Leaders of the world diamond and jewelry industry joined the heads of
the Panama Diamond Exchange (PDE) in Panama City to launch a $200
million building project, which will serve as both the headquarters of
the PDE and as the center of the diamond, gemstone and jewelry trade
in Latin America. The projected turnover of diamonds, precious stones
and jewelry traded within its confines is estimated at more than $7
billion per annum. The PDE Tower complex, designed by renowned
architect Ignacio Mallol, will include a diamond exchange and an
office tower, and will eventually include a shopping mall with
high-end retail jewelry stores. Construction is expected to begin
mid-year 2009.


---IDL Expands into Italy, Saudi Arabia

International Diamond Laboratories (IDL) plans to expand its
operations into Italy and Saudi Arabia by the end of the year. The
lab, a subsidiary of the Dubai Multi Commodities Centre, expects to
open an office in Valenza, Italy, in mid-December. IDL claimed it
would become the first international lab to open a diamond and jewelry
grading lab in Saudi Arabia when it launches its branch office in the
"Jeddah International Centre" in December.


---GCAL, Ideal Diamond Solutions Partner for Turnkey Website

GCAL and Ideal Diamond Solutions will provide a customizable website
module that jewelry retailers can use to market and sell GCAL
certified diamonds and jewelry. The website acts as a
business-to-consumer portal bearing the retailer's name and brand
identity to offer GCAL certified diamonds and jewelry, but items are
priced with a retail margin. The solution is commission based and
handles fulfillment, credit card processing, online marketing, and
customer service provided by Ideal Diamond Solutions.

GCAL is also participating in a pilot program called "Made in
Botswana" to identify and certify polished diamonds using its
proprietary Source Veritas assurance service. The pilot program is
being offered through Day's Jewelers, a chain in Maine and New
Hampshire.


---GIA’s First Law Enforcement Class Graduates

The GIA's first class made up entirely of law enforcement officials
recently graduated, after an intensive two-week course of training on
gemological identification and fraud prevention. The 13 graduates
endured a curriculum, developed in cooperation with the Violent Crime
Section of the FBI’s Criminal Investigative Division that was designed
to train law enforcement to better investigate and resolve crimes
affecting the gem and jewelry trade. GIA intends to continue offering
the gemology course to law enforcement.


---AWDC to Host ‘Confidence in Challenging Times’

The international diamond community will gather in Antwerp for a
symposium on November 17. In light of the financial crisis currently
impacting the world economy, and given the changing market conditions,
the Antwerp World Diamond Centre (AWDC) is holding an international
symposium for the world diamond community on November 17, 2008.
Entitled ‘Confidence in Challenging times,’ it will focus on the
impact of the worldwide financial crisis on the diamond industry.


--------------------
DIAMOND MINING NEWS:
====================

---ALROSA Profits -62% in First Three Quarters

ALROSA's net profit fell 62 percent in the first nine months of 2008
to RUB 3.542 billion ($130.8 million), and net profit in the third
quarter alone fell 97 percent to about $4.2 million.


---De Beers Officially Launches Voorspoed Mine

De Beers officially opened its Voorspoed Mine, marking the first new
diamond mining launch in South Africa in nearly 20 years. Voorspoed is
the third De Beers mine to open in 2008, following the launch of the
Snap Lake and Victor mines in Canada. Voorspoed is expected to produce
approximately 800,000 carats of diamonds a year at full production,
and recover more than 10 million carats during its anticipated
12-to-16 year life. Initial pre-launch production saw the recovery of
60,000 carats with a value of $120 a carat.


---Rio Tinto Reports Strong Market for Pink Diamond Tender

Rio Tinto’s 24th annual Argyle Pink Diamond Tender showed a strong
market for the rare precious stones despite the difficult economic
conditions, the company reported. Because prices are expected to
escalate as Argyle production comes to a close, Rio put reserve prices
on the collection for the first time this year. Rio also introduced a
new distribution strategy for its Argyle production, selecting 15
“Authorized Partners” to receive polished pink diamonds directly from
the mine, and a number of “Select Ateliers” who will use the Argyle
brand but not buy directly from the mine.


---Petra Sells 39ct Rough Blue Diamond for $9M

Petra Diamonds Ltd. sold a 39.19 carat special blue diamond from the
Cullinan mine, which was on tender in Johannesburg, South Africa, for
$8.8 million. Alisa Moussaieff, the co-owner of Moussaieff Jewelers in
the United Kingdom, purchased the diamond.


---Pala Withdraws Bid for Rockwell Diamonds

Pala Investments Holdings Limited withdrew its all-cash offer for
Rockwell Diamonds. Pala determined that a number of the conditions to
the bid were incapable of being satisfied prior to the expiry time.


---Investors Opt Out of Tahera Buyout

Tahera Diamond Corporation stated that a planned sponsorship agreement
was cancelled after it failed to meet conditions laid out in the deal.
A group of unnamed Vancouver resource developers agreed in September
to buy Tahera subject to a number of conditions, including the
necessary due diligence by the "plan sponsor" before October 31, and
the necessary creditor and court approvals. These conditions were not
met by the deadline and the agreement was terminated.


---Stornoway Diamond Increases Private Placement

Stornoway Diamond Corporation increased the size of its private
placement from CAD 3 million to CAD 5 million ($2.5 million-$4.2
million). The private placement will also now have a brokered and a
non-brokered component. The private placement will broker up to
13,333,300 “flow-through” common shares.


---Pangea DiamondFields Secures $2M Loan

Pangea DiamondFields entered into a $2 million short-term loan to be
provided by Pangea Exploration (Proprietary) Ltd. Although Pangea's
interim results on September 25 listed about $1.82 million in cash and
approximately $750,000 in unsold diamonds, by October 24, the junior
miner had only $230,000 cash resources with unsold stock of $800,000.
Pangea’s directors anticipate that the loan facility will provide
sufficient working capital to maintain its current activities for up
to three months.


-----------
ECON WATCH:
===========

For week ending November 6, 2008


Nov 6 Oct 30 Chng

$1 = Euro 0.787 0.773 0.014
$1 = Rupee 48.1 49.3 -1.2
$1 = Israel Shekel 3.84 3.76 0.08
$1 = Rand 10.29 9.93 0.36
$1 = Canadian Dollar 1.19 1.21 -0.01

Precious Metals
Gold $731.50 $736.70 -$5.20
Platinum $836.00 $836.00 $0.00


Nov 6 Oct 30 Chng Chng%
Stock Indexes
BSE 9,734.22 9,044.51 689.71 7.63%
Dow Jones Avg. 8,695.79 9,180.69 -484.90 -5.28%
FTSE 4,272.41 4,291.65 -19.24 -0.45%
Hang Seng 13,790.04 14,329.85 -539.81 -3.77%
S & P 500 904.88 954.09 -49.21 -5.16%
Yahoo! Jewelry Index 654.32 742.54 -88.22 -11.88%