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Týždenný prehľad zaujímavostí vo svete diamantov .

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Rapaport Weekly Market Comment Mar. 21, 2014

Polished markets stable with strong demand for GIA dossiers. Dealers shifting to diamond parcels, non-certs. and 0.25ct. sizes due to 0.30ct. shortages caused by GIA delays. Large stone market speculative ahead of Basel shows. Gem Diamonds 2013 revenue +5% to $213M, profit of $38M vs. loss of $77M a year ago. Belgium’s Feb. polished exports +33% to $1.6B, rough imports +18% to $1.4B. India’s Feb. polished exports +16% to $2.2B, rough imports +12% to $1.5B. Panama Gem & Jewelry Center launched. De Beers to select 5 new sightholders: D. Navinchandra Exports, Diambel, J.B. And Brothers, Star Rays, Vallabhbhai Dhanjibhai & Co. The Diamond Show to open March 27 at Markthalle in Basel.


RapNet Data: Mar. 20

Diamonds 1,042,355
Value $6,993,957,260
Carats 1,147,795
Average Discount -26.41%

www.rapnet.com

Get Current Price List | Subscribe to Rapaport | Join RapNet
RAPAPORT ANNOUNCEMENTS
March
27-31
Thu-Mon
The Diamond Show

Markthalle Building, Basel, Switzerland

Learn More:
www.thediamondshow.net
April
1-9
Tue-Wed
Rapaport Melee Auction

New York & Dubai

View Details.
April
2-10
Wed-Thu
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com
QUOTE OF THE WEEK
We are confident that pure type IaAB synthetics cannot be produced. This confidence comes from many years of extensive research targeted at producing such material to test our detection methodologies.

Dr. Simon Lawson | De Beers Group


Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp, Mumbai, Dubai and Shanghai. View jobs now.

INDUSTRY

De Beers Adds Five Sightholders

De Beers preapproved five new sightholders for the remainder of the 2012 to 2015 supplier of choice (SOC) contract period. The companies will be formally appointed before sight number four in May and include Vallabhbhai Dhanjibhai & Co., Star Rays, J.B. And Brothers | Yaelstar, D. Navinchandra Exports and Diambel, according to Rapaport sources.

De Beers modified its SOC replanning process to enable non-sightholder businesses that have demonstrated strong demand through auction sales. Sightholder ITO re-planning process underway also provides opportunities to qualify for new rough diamond allocations, subject to forecast availability. The 2014 to 2015 ITO period is the last in the current contract period. A new De Beers sightholder contract will start on March 31, 2015 and the application process will open in the third quarter of 2014. De Beers stated that the new contract will involve a simplified allocation process but include more rigorous financial compliance criteria.

All Synthetics are Detectable

De Beers asserts that all synthetic diamonds can be detected. The company has dismissed claims by EGL Asia-Diamond services that its DiamondView instrument failed to detect a type IaAB “synthetic” stone, passing it as natural. De Beers stressed that it is not possible for a type IaAB diamond to be synthetic. Consistent, reliable detection of synthetics is vital to preserve the integrity of the diamond industry.

Read the full story and analysis.

U.S. Jewelry Inflation -3%

The U.S. consumer price index (CPI) for jewelry declined 2.6% year on year to 172.11 points in February, the lowest index reading to be posted since March 2011. The highest CPI for jewelry was 183.5 points in January 2012. The CPI for watches was basically flat in February, up by just 0.6%, at 122.5 points or two points lower than the record high of 124.3 that was set in July 2013.

Continued price pressures on industry commodities contributed to a lower jewelry price index during the month. The price for gold in February was about 16% lower year on year, while platinum was down 8%. The RapNet Diamond Index (RAPI), the global benchmark for polished diamond prices, fell 3.3% year on year for 1-carat diamonds, while RAPI for 3-carat diamonds dropped 2.7%. RAPI for 0.50-carat stones increased 3.2% and the index jumped 11.1% for 0.30-carat diamonds. By comparison, the CPI for all product categories in February increased 1.1% year on year to set a new record high of 235.17 points.

RETAIL & WHOLESALE

Wartski IDs Third Imperial Easter Egg

The Third Imperial Easter Egg, made by Faberge in 1887 and now estimated to be worth $33 million, will be briefly on display at Wartski in London from April 14 to 17. The rare find was set to be melted for scrap in the U.S. until its former owner, who purchased it for $14,000, discovered an old news clipping describing the egg online.

The Faberge piece supports a 3.2-inch egg on an elaborate gold stand supported by lion paw feet. Three sapphires suspend golden garlands and a central diamond is used to release the top and reveal a Vacheron Constantin watch. The man contacted Wartski, a Faberge specialist, the egg was authenticated and sold to a private buyer for an undisclosed sum. Wartski believes that at least two other Faberge eggs may still be in circulation but they remain unaccounted for.

LG, Google Power Up Watch Tech

LG Electronics is collaborating with Google on the LG G Watch, powered by Android Wear™, which extends the Android platform to wearables. LG expects to introduce the watch in the second quarter. LG G Watch will be compatible with a wide range of Android smartphones and will present information to users as they need it or whenever they speak "OK Google." The electronics firm explained that the LG G Watch presents a low barrier to entry for developers, too. The watch represents LG's fourth device that was developed in close collaboration with Google, following the Nexus 4, Nexus 5 and the LG G Pad 8.3 Google Play Edition.

Develop Smart Omnichannel Integration

Consumers are in control of the retail experience now and their expectations for a superior, personal and seamless shopping experience is only increasing by the week, in large part due to mobile devices. IBM conducted a webinar this week to share five best practices that retailers should consider as they develop an omnichannel strategy, which unifies the brand's channel marketing across a single experience.

Collect
Gather customer profiles, web analytics, shopping cart information and social media to build a ''lifetime'' of data that measures behaviors, preferences, interests and demographics.

Analyze
Data will provide actionable insights to identify the lifecycle of your customer experience so that the retailer can benchmark touch points of interaction. From this mapping, retailers create a deeper understanding of their audience and therefore can produce best practices for engagement.

Decide
While an omnichannel strategy is certainly scalable to any budget, data mapping enables the retailer to prioritize resource allocation. Nonetheless, whether funding affords the retailer to sync the customer experience across all digital channels or just a single platform to start, IBM said to plan message consistency across all phases.

Manage
Customer interaction a one-on-one experience. Omnichannel integration personalizes the shopping event by identifying real-time triggers in order to immediately interact with the customer. Personalization enables retailers to dynamically serve content based upon the shopper's profile, coupled with immediate choices and alternatives when he views product videos without making a purchase, modifies an order or abandons a shopping cart all together.

Optimize
Do customers navigate the path to a purchase that you desire? Measure customer deviations and capture their reactions in order to improve upon the user experience. In addition, measure your campaign performance against a comparable retailer or the industry as a whole. Providers that cater to the jewelry industry collect comparative benchmarks as part of their omnichannel solution offerings.

PDE Names Board, Founders

The Panama Diamond Exchange (PDE) named its directors and board members this week as: Eli Izhakoff, founding chairman, Erez Akerman, PDE's president, Ernest Blom, the World Federation of Diamond Bourses' president, Gaetano Cavalieri, CIBJO's president, and Avi Paz, the World Diamond Council's president. Founding PDE members include Maxim Shkadov, Jeffrey H. Fischer, Reuven Kaufman, Ronnie Vanderlinden, Alex Popov and Mehul Shah. The PDE is the first and only diamond bourse in all of Latin America and it will be the anchor organization for the new Panama Gem & Jewelry Center, which currently is under construction.

Group Names GIA as Ethical

The Ethisphere Institute named the Gemological Institute of America (GIA) as a 2014 World’s Most Ethical Company for a second consecutive year. The designation recognizes continued efforts to build and maintain a superior ethics and compliance to ensure the public trust in gems and jewelry through research discoveries, education, laboratory services and instrument development. Some well-known companies on the list included UPS, Starbucks, eBay, L'Oreal, PepsiCo and Visa.

MINING

Gem Diamonds Reports Profit

Gem Diamonds reported that its revenue rose 5% year on year to $213 million in the fiscal year that ended on December 31. The increase resulted from improved rough diamond prices and higher polished sales. The group posted a profit of $38.2 million for the year compared with a loss of $77 million one year ago.

Top prices were achieved for Letšeng's production, particularly high-quality, large diamonds. The company sold 97,294 carats of diamonds from Letšeng for an average ‎‎$2,043 per carat, up from $1,932 per carat the previous year. Revenue was given quite a boost from the sale of a rare 12.47-carat blue diamond, which sold in October for $7.5 million, setting a Letšeng record of $603,047 per carat.


Severalmaz Triples Production Target

Severalmaz, a subsidiary of ALROSA, launched operations at its ''№2'' plant at the Lomonosov mining and processing division in the Arkhangelsk region of Russia. The company's first operating plant has been providing annual production of about 500,000 carats and now the mining firm anticipates that two processing operations will nearly triple carat capacity. The project hosts six kimberlite pipes with mineral reserves estimated at 197 million carats. Mining is currently taking place at the Arkhangelskaya pipe, where the launch of this second processing plant allows greater enough volume of ore for Severalmaz to target producing 1.7 million carats of diamonds this year.

Dominion Updates Targets

The Diavik diamond mine in Canada will produce 6.1 million carats this year and based on historical recovery rates, Dominion Diamond anticipates nearly 1 million carats from the recovery of reprocessed plant rejects. The updated mine plan for Diavik anticipates that the company's operating costs will reach $155 million this year, leading cost of sales to reach $280 million.

Dominion also expects to produce 1 million carats from the Ekati mine. Dominion expects to spend $100 million to continue development at the Misery Pipe and $55 million to develop the Pigeon pipe. Overall operating costs for Ekati are expected to reach $195 million during the year.

Anjin Downsizes Workforce

Anjin released numerous workers from its Marange operation, with conflicting reports regarding the motive, according to NewsDay. Workers claimed the company faces viability problems and is set to close, but management claims operations are normal and the workers were simply laid off as part of a general labor restructuring program. The news report suggested that most of the workers placed on leave were drillers from the exploration department, machinery operators as well as general labor.

STATS

India

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $2,160 16% $3,225 -9%
Polished imports $564 20% $1,076 0%
Net exports $1,596 15% $2,149 -13%

Rough imports $1,490 12% $2,747 17%
Rough exports $113 34% $237 -31%
Net imports $1,377 18% $2,510 28%

Net diamond account $219 -3% ($361)

Synthetic imports $11 112% $18 -1%
Synthetic exports $11 100% $20 166%


Belgium

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,630 33% $2,607 23%
Polished imports $905 11% $2,195 13%
Net exports $725 78% $412 320%

Rough imports $1,361 18% $2,710 19%
Rough exports $1,421 29% $2,666 24%
Net imports ($61) $44 -62%

Net diamond account $786 116% $369 650%


ECONWATCH
Diamond Industry Stock Report

U.S. shares mixed with Charles & Colvard (+6%) pulling ahead and JCP (-5%) losing some ground. Indian shares all lower except Renaissance Jewellery and Titan, which were flat on the week. Mining shares mainly lower led by Rockwell (-9%) and ALROSA (-5%). View the extended stock report.
Mar. 20 Mar. 13 Chng.
$1 = Euro 0.725 0.720 0.005
$1 = Rupee 61.33 61.19 0.1
$1 = Israel Shekel 3.48 3.47 0.01
$1 = Rand 10.90 10.80 0.10
$1 = Canadian Dollar 1.12 1.11 0.01

Precious Metals
Gold $1,328.70 $1,372.40 -$43.70
Platinum $1,425.00 $1,473.00 -$48.00

Stock Indexes Chng.
BSE 21,740.09 21,774.62 -34.53 -0.2%
Dow Jones 16,331.05 16,108.89 222.16 1.4%
FTSE 6,535.24 6,553.78 -18.54 -0.3%
Hang Seng 21,182.16 21,756.08 -573.92 -2.6%
S&P 500 1,872.01 1,846.34 25.67 1.4%
Yahoo! Jewelry 1,008.99 1,003.09 5.90 0.6%
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Rapaport Weekly Market Comment Mar. 28, 2014

Polished markets optimistic but liquidity under pressure due to tight bank credit and high rough prices. Demand for large diamonds robust as Basel shows begin. Rough trading stable ahead of next week’s De Beers sight. Tiffany & Co. 4Q sales +5% to $1.3B, loss of $104M vs. profit of $180M a year ago due to $480M Swatch arbitration. Signet Jewelers 4Q revenue +3% to $1.6B, profit +2% to $175M. Chow Sang Sang 2013 revenue +38% to $3.2B, profit +24% to $158M. The Diamond Show opens March 27 at Markthalle in Basel.


RapNet Data: Mar. 27

Diamonds 1,052,044
Value $7,131,314,020
Carats 1,167,209
Average Discount -26.44%

www.rapnet.com

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
March
27-31
Thu-Mon
The Diamond Show

Markthalle Building, Basel, Switzerland

Learn More:
www.thediamondshow.net
April
1-9
Tue-Wed

Rapaport Melee Auction

New York & Dubai

View Details.
April
2-10
Wed-Thu
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com

QUOTE OF THE WEEK
Namibia’s diamonds fetch $450 to $700 per carat because they are of high-quality, spotless and they don’t disintegrate. That compares with about $150 per carat for Botswana, less than $100 for Angola and below $50 for Zimbabwe. Ninety-eight percent of Namibia's stones are of gem-quality.

Kennedy Hamutenya | Namibia Diamond Commissioner

Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp, Mumbai, Dubai and Shanghai. View jobs now.

RETAIL & WHOLESALE

Signet Lands 'Top Pick' at Sterne Agee

Signet Jeweler's revenue rose 3.4% year on year to $1.56 billion during the fourth quarter that ended on February 1. Comparable-store sales increased 4.3% and cost of sales rose 4.4% $915 million. Signet's profit improved 1.7% to $175 million or $2.18 per diluted share. Fiscal year sales rose 5.7% to $4.21 billion, cost of sales jumped 9.9% to $2.63 billion and net income improved 2.2% to $368 million or $4.56 per diluted share.

U.S. division sales improved 3.5% to $1.29 billion in the fourth quarter, while same-store sales rose 5%. The strongest performance came from bridal, colored diamonds, fashion jewelry, beads and watches. The average merchandise transaction value increased at Kay, but it declined at Jared. Signet's ecommerce sales in the U.S. surged 10.9% to $61.9 million.

In the U.K., sales as reported in dollars improved 1.4% to $272.2 million, but same-store sales jumped 5.7% in the fourth quarter. Sales performance was driven by bridal and fashion diamond jewelry, fashion and prestige watches, exclusive of Rolex. The average merchandise transaction value remained consistent year to year at H.Samuel, however, the average value fell slightly at Ernest Jones. Online sales in the U.K. surged 32.6% to $17.1 million.

Signet's board declared an increased quarterly dividend of 18 cents per share, payable on May 28.

Sterne Agee analyst Ike Boruchow raised the price target $5 for Signet to $125 per share, maintained a rating of ''Buy'' and increased fiscal 2015 earnings per share (EPS) to between $5.12 and $5.70 from $5.10 and $5.55. Gross margin pressure was alleviated somewhat amid solid top-line trends, Boruchow wrote. After taking into account the significant accretion potential from the pending Zale merger, Signet remains a most compelling story and a top pick for Sterne Agee.

Signet's U.K. performance was the best in five years, in local currency, and continues to benefit from branded/exclusive merchandise, which grew 23% for the year, Boruchow said. Signet should receive a greater benefits from lower gold costs this year, partially offset by some hedge losses, a headwind from lower recovery value of trade-in merchandise and increased bad debt expense from the credit portfolio, Boruchow wrote. The bad debt ratio continues to increase modestly due to customers carrying higher balances, but this is more than offset by increased interest income.

''Lastly, we'd note that although the company was somewhat more promotional than expected in quarter-four, management does not expect to be meaningfully more promotional going forward,'' he said. Sterne Agee believes Signet can achieve 2017 EPS of about $6.50, independent of the Zale merger, and Zale can contribute about $2.75 more, once its operations are synergized. ''While management has identified $100 million in clear synergy opportunities, this does not include $22 million of cost savings when Zale changes credit providers in late 2015 - and management commented on the call today that they believe they can identify further synergies once the deal closes,'' Boruchow wrote.

Chow Sang Sang Profit +24%

Chow Sang Sang Holdings International reported that its revenue rose 38% year on year to $3.24 billion (HKD 25.14 billion) in the fiscal year that ended on December 31. Sales were driven by strong consumer purchasing power in Hong Kong and Macau, which accounted for 79% of the group's total sales. However, the group observed that sales in Mainland China were weaker due to a slower economy, credit tightening and the anti-corruption drive ordered by the new administration in Beijing, which impacted the luxury market. Company profit increased 24% year on year to $157.7 million.

During the year, Chow Sang Sang continued to expand its sales network of jewelry shops in Mainland China, Hong Kong, Macau and Taiwan. The group's precious metal wholesale operation as well as its securities and futures brokerage each made small contributions to overall profit. Chow Sang Sang’s jewelry retail sales rose 34% to $2.57 billion.


Tiffany & Co.'s Profit -56%

Tiffany & Co.'s worldwide sales rose 5% year on year to $1.298 billion and same-store sales improved 2% for the fourth quarter that ended on January 31. The retailer's cost of sales increased 1.6% to $513 million; however, Tiffany & Co. recorded an arbitration expense of $480 million with Swatch, which led to reporting a quarterly loss of $104 million compared with earnings of $180 million one year ago. For the retailer's fiscal year, revenue increased 6.2% year on year to $4.031 billion, comparable-store sales increased 3%, cost of sales rose 3.7% to $1.691 billion and profit slipped 56.4% to $181 million or $1.41 per share.

During the fourth quarter, which included the all-important Christmas season, comparable-store sales on a constant exchange-rate-basis and by region were strongest in Japan, where they improved 8%, followed by an increase of 7% in the Americas, 4% in Asia-Pacific and 2% in Europe.


Movado's Profit -11%

Movado Group's net sales increased 7% year on year to $132.3 million for the fourth quarter that ended on January 31, as measured by generally accepted accounting principles (GAAP). Cost of sales rose 3.4% to $63 million. Net income attributed to the Movado Group fell 9.2% year on year to $7.2 million or 28 cents per share. Movado recorded a pre-tax charge of $8.3 million, or 20 cents per diluted share, in connection with reducing the presence of ESQ Movado, while expanding the namesake brand in certain retail doors.

For the full fiscal year, on a GAAP basis, net sales improved 12.8% to $570.3 million, while cost of sales increased 16.4% to $265 million. Net income for the group fell 10.9% to $50.9 million or $1.97 per share. Looking ahead, Movado anticipates fiscal 2015 net sales to increase almost 11% to $640 million on a non-GAAP basis, with gross margin percent unchanged and net income of approximately $64 million or $2.44 per diluted share.

Charles & Colvard Reports a Loss

Charles & Colvard reported that its revenue improved 26.9% year on year to $28.49 million for the fiscal year that ended on December 31. Total costs and expenses jumped 35.5% to $30.07 million, leading to a net loss of $1.29 million compared with profit of $4.38 million one year earlier. During the year, loose jewel sales increased 23% to $18.5 million and finished jewelry sales increased 34% to $10 million. The company’s wholesale business increased 23% to $25.6 million, while its direct-to-consumer businesses jumped 78% to $2.9 million. International sales rose 40% to $7.8 million.

Christie's NY Jewels Sale Targets $50M

Christie’s New York will hold its spring sale of magnificent jewels on April 16, offering more than 250 jewels in a two-session sale at Rockefeller Center. The auction house expects to achieve a sale total of more than $50 million. Christie's will offer important colorless and colored diamonds, including a pair (22.60-carat and 22.31-carat) of circular-cut D, internally flawless diamond ear pendants with a presale estimate of $7 million to $10 million.

A 40.43-carat, D, potentially flawless oval-cut diamond ring, with a presale estimate of $5.8 million to $7.8 million, and a 50.05-carat, D, flawless Briolette-cut diamond, with a presale estimate of $5.5 million to $7.5 million, round out the top lots. Christie’s will also present more than 60 signed jewels by Suzanne Belperron, René Boivin, Bulgari, Cartier, Tiffany & Co., Van Cleef & Arpels, David Webb and Harry Winston, among others.


Blue Nile Debuts Designer Collective

Blue Nile launched a new measure, the Blue Nile Designer Collective, to showcase jewelry from established designers and emerging talent. The assortment of fine jewelry includes earrings, pendants and bracelets in the price range of $55 to $6,000. The Designer Collective offers shoppers a more bespoke product assortment. The designers include Anne Sportun, Bree Richey, Denise James and Robert Leser. Additionally, Designer Collective is an extension of Blue Nile's partnership with designers already on board, such as Monique Lhuillier Fine Jewelry, a curated collection of engagement rings and wedding bands.

Alex & Ani's Online Sales Surge

Omnichannel solutions provider, eBay Enterprise&reg;, a subsidiary of eBay Inc., said it drove sales much higher for Alex and Ani through Facebook ads, achieving $1.6 million just during the Thanksgiving Day through CyberMonday period in 2013. When comparing the performance of Facebook ads for the previous six months, before and after launching, Alex and Ani recorded an 80% return on investment with eBay Enterprise, while revenue surged 4,388%. In addition, the average order value jumped 434% to more than $75, according to eBay Enterprise.

To achieve these rates, eBay Enterprise partnered with Kenshoo Social, an advanced technology platform, to optimize Alex and Ani’s targeted social marketing campaign in addition to leveraging several eBay commerce solutions already in place. Alex and Ani had deployed Magento Enterprise Edition to customize and extend its ecommerce efforts, such as Marketing Solutions programs Affiliate, Search and Paid Social to reach its revenue targets.

De Beers, Meierotto Receive Trademarks

The U.S. Patent & Trademark Office (USPTOP) assigned the trademark ''Imaginary Nature'' to De Beers Diamond Jewellers Ltd. of the U.K. on March 11 with the registration number 4496968. De Beers requested the trademark on January 7, 2013. ''Imaginary Nature'' applies to retail and wholesale store services, advertising and marketing services, jewelry, precious and semi-precious stones, and horological and chronometric instruments.

Separately, the USPTO reissued the trademark ''Meierotto Midwest Jewelers'' to Meierotto's Jewelry LP of Kansas City, Missouri on March 18 with the registration number 4497364. The trademark applies to retail jewelry stores and was first used in commerce in May 2009.

MINING

Gahcho Kue Production Target 3Q16

The first diamond production from the Gahcho Kue mine in northern Canada is anticipated in the third quarter of 2016, according to Mountain Province Diamonds and its joint-venture partner, De Beers Canada. Regulatory restrictions imposed this year limited material that can be trucked to the site over the annual winter ice road. In particular, shipments of cement and steel have been delayed but the partners are exploring opportunities to mitigate the impact on the project schedule.

The winter ice road enables trucking in earnest for about two months every year, allowing mining companies who operate in the area to bring in necessary supplies that will supply them throughout the year.


Fieldwork Continues at PL 117

Botswana Diamonds completed its initial fieldwork at the prospecting license PL 117/2011 in the Orapa region of Botswana and which it shares with joint venture partner ALROSA. The license is a small, 2.9-square-kilometer area of ground that was identified as a priority target under the partnership agreement. A team of senior geologists and geophysicists from both companies embarked on a rapid and intensive work program designed to identify drill targets on the license. Tasks completed on the ground included magnetic, electromagnetic and geochemical surveys. The geochemical samples are now being shipped to ALROSA's laboratory in St. Petersburg, Russia for mineralogical analysis. Simultaneously the interpretation and modeling of the geophysical fieldwork is ongoing.

Stornoway Draws $10M

Stornoway Diamond Corporation has drawn $10 million on the second tranche of its unsecured non-revolving bridge credit facility of up to $20 million with Diaquem Inc. in connection with the development of the Renard diamond project and for general corporate purposes, including costs relating to Stornoway's ongoing project financing activities. The facility is now fully drawn. In addition, Diaquem has agreed to extend the maturity date of the facility from March 28 to June 27.

ECONWATCH
Diamond Industry Stock Report

U.S. and Hong Kong shares were mainly lower, led by Charles & Colvard (-22%) and Chow Sang Sang (-9%). European shares were all higher except for Swatch (-1%). Indian shares were mixed with Classic Diamonds (-20%) and Rajesh Exports (+12%) defining the spread. Mining companies were slightly higher led by Lucara (+7%). View the extended stock report.
Mar. 27 Mar. 20 Chng.
$1 = Euro 0.727 0.725 0.002
$1 = Rupee 60.33 61.33 -1.0
$1 = Israel Shekel 3.50 3.48 0.02
$1 = Rand 10.58 10.90 -0.32
$1 = Canadian Dollar 1.10 1.12 -0.02

Precious Metals
Gold $1,293.10 $1,328.70 -$35.60
Platinum $1,394.00 $1,425.00 -$31.00

Stock Indexes Chng.
BSE 22,214.37 21,740.09 474.28 2.2%
Dow Jones 16,264.23 16,331.05 -66.82 -0.4%
FTSE 6,588.32 6,535.24 53.08 0.8%
Hang Seng 21,834.45 21,182.16 652.29 3.1%
S&P 500 1,849.04 1,872.01 -22.97 -1.2%
Yahoo! Jewelry 1,016.82 1,008.99 7.83 0.8%
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Rapaport Weekly Market Comment Apr. 4, 2014



Basel shows signal strong demand for top quality large diamonds. De Beers raises prices 3%-4% at April sight, reducing dealer demand on secondary market. Polished market stable but dealers expect slowdown as higher rough prices creating liquidity crisis. March RapNet Diamond Index (RAPI™) for 1ct. +0.8%. Dominion Diamond Corp. FY sales +118% to $752M, loss of $23M vs. profit of $22M. Swiss Feb. watch exports +7% to $1.9B. U.S. Feb. polished imports +6% to $1.6B, polished exports +20% to $1.8B. Japan’s 2013 polished diamond imports -3% to $874M. Reserve Bank of India removes restrictions on advance payment for rough diamonds to foreign mining companies.


RapNet Data: Apr. 3

Diamonds 1,045,344
Value $7,036,806,754
Carats 1,155,779
Average Discount -26.29%

www.rapnet.com
Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
April
1-9
Tue-Wed
Rapaport Melee Auction

New York & Dubai

View Details.
April
2-10
Wed-Thu
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com
QUOTE OF THE WEEK
People are buying diamonds in the high-end because they recognize that it’s an asset that holds value. There are not a lot of these goods around, but many of them were in Basel.

Jose Batista | Rio Diamond MFG Corp.

Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp, Mumbai, Dubai and Shanghai. View jobs now.

INDUSTRY

Basel Shows Signal Solid Trading

The Basel shows signaled robust demand for high-end pieces, even though visitor traffic was slightly lower than last year. Serious buyers were shopping for goods and even though the general market is slow, trading is healthy. At Rapaport Group's The Diamond Show, large European brands and watch manufacturers were actively looking for goods.

Diamond suppliers observed the following trends in the marketplace:

Strong demand for GIA dossiers, particularly for 0.30ct. to 0.70ct. • Shortages for 0.30ct. to 0.40ct. • Good demand for 2ct. to 3ct., SI • Sizes above 5cts. in strong demand, but could be speculative • Good demand for intense, fancy colored diamonds, overall demand up for colored stones • Steady demand for pears, cushions, ovals and emeralds but princess-cuts weak.

U.S. Jewelry Sales +6%

U.S. jewelry and watch sales improved in February, according to preliminary statistics, and they were revised slightly higher for January. Sales of jewelry and watches combined increased 6.4% year on year in February as measured across all retail segments and the rate of growth was similar to the increase one year ago. Government figures reflected sector growth of 3.6% in January, following a preliminary increase of 1.3%.

Jewelry sales in February increased 6% year on year to $5.852 billion, while watch sales improved 8.9% to $783 million. Meanwhile, the U.S. consumer price index (CPI) for jewelry February declined 2.6%, the lowest index reading to be posted since March 2011. The CPI for watches was basically flat, up by just 0.6% during February.

Swiss Watch Exports +7%

Swiss watch exports rose 7.2% year on year to $1.93 billion (CHF 1.7 billion) in February, according to the Federation of the Swiss Watch Industry. By volume, Swiss watch exports increased 5.2 percent to 2,131,200 units. Performance in February exceeded that of January when Swiss watch exports rose 5% by value. Asian markets experienced the strongest growth in demand as exports to Hong Kong jumped 18.7% in February to $396 million. Exports to Japan surged 44.6% to $121 million as consumer spending in February and March, especially for watches and jewelry, has been spurred by the April 1 sales tax increase. Meanwhile, exports to China slipped 0.7% to $114 million. Swiss watch exports to the U.S. rose 4.4% to $204 million; however, exports declined 7.6% to Germany to $105 million.
RETAIL & WHOLESALE

RBI Eases Payment Restrictions

The Reserve Bank of India (RBI) liberalized rough diamond imports by scrapping restrictions on advance payment for rough stones by dealers to foreign mining and distribution companies. Indian banks may now rely solely on their due diligence in financing dealer transactions with mining companies. The RBI will not notify the names of overseas mining companies from whom an importer may import rough diamonds into India, by way of advance payments, without any limit or bank guarantee or stand-by letter of credit, according to the bank's statement.

RBI cautioned that the mining companies approved by banks should be recognized rough diamond producers with a good track record and have recommendations from GJEPC and importers. Additionally, the RBI said that advance payment should be transferred directly to the account of the company concerned.

De Beers Updates Sightholder Directory

De Beers updated its sightholder directory to include the five new sightholder businesses that will receive supply via an intention to offer (ITO) for the remainder of the 2012 to 2015 supplier of choice contract period. The new De Beers sightholders are: D. Navinchandra Gems BVBA, Diambel NV, M/S. Vallabhbhai Dhanjibhai & Co., Yaelstar BVBA and Star Rays. The five new qualifying sightholders demonstrated strong demand at De Beers auctions. De Beers is pleased to congratulate and welcome its newest sightholders. Details can be found in the sightholder directory.

Kingold's Profit -14%

Kingold Jewelry Inc. reported that its revenue increased 29.9% year on year to $1.2 billion for the fiscal year that ended on December 31. Gross margin fell to 4.3% of sales compared with 5.6% one year earlier. Profit declined 13.5% to $28.3 million. During 2013, Kingold Jewelry processed 51.1 metric tons of 24-karat gold products, an increase of 35.2% compared with 2012. Kingold anticipates processing between 60 and 70 metric tons of 24-karat gold products in 2014.

Kingold is expanding its international presence in 2014, beginning with a recently announced joint venture agreement to enter the Kuwait market. Kingold currently has approximately 300 jewelry business clients across 25 provinces in China. Kingold's investment gold products primarily include gold bars and coins and other customized products specifically designed for use by commercial banks.

DGSE's Loss Increases

DGSE Companies Inc. reported that its revenue fell 15% year on year to $108.5 million for the fiscal year that ended on December 31. Gross profit margin dropped to 18.2% from 19%. DGSE recorded a net loss of $2.7 million, or 22 cents per share, compared with a net loss of $2.3 million, or 19 cents per share, in 2012. DGSE called the consumer market challenging, but it is focused on building its ecommerce function and allocating resources toward revenue streams with the highest profit potential such as high-end jewelry, diamonds and watches.

Dramatically lower gold prices had a negative impact on DGSE's bullion and scrap categories in the fourth quarter; however, jewelry sales increased as the company drove its marketing efforts higher during the Christmas season.

Joyalukkas Opens in Malaysia

Joyalukkas opened a jewelry showroom in Malaysia, located on Jalan Masjid India, Kuala Lumpur. The mega store was inaugurated by Malaysia's Minister of Domestic Trade, Cooperative and Consumerism, Dato Hasan Bin Malek, and renowned Indian celebrity and film star R. Madhavan. The Malaysia jewelry showroom was designed in line with the group's signature Joyalukkas style and offers over one million designs, including gold, diamond, precious stone, pearls, platinum and silver jewelry.

Leo Hamel to Carry Mühle Glashütte

Leo Hamel Fine Jewelers partnered with German watch brand Mühle Glashütte to become the first authorized dealer for the company in San Diego, California. The company is one of only 20 exclusive retailers for the Mühle Glashütte line in the U.S. Leo Hamel will offer all Mühle Glashütte wristwatch models including sport, classical, and nautical timepieces, such as the popular S.A.R. Rescue-Timer, originally developed for the German Maritime Search and Rescue Service.

Helzberg Wins Merchant Award

MarketLive selected winners of its annual MarketLive Merchant Awards in honor of the top performing ecommerce websites across the company's customer base. MarketLive recognized winners in three key categories: The Ken Burke Award of Excellence; the Intelligent Selling Awards and the MarketLive Performance Index Top Performer Awards. Helzberg Diamonds won The Ken Burke Award of Excellence, which honors a single website whose strong performance and deployment of best practices set it apart from all others during the past year. Helzberg's ecommerce website distinguished itself with a rich cross-channel experience, integrated content and excellent merchandising features, according to MarketLive.

The winners of Intelligent Selling Awards, were given to Design Within Reach for best customer experience and O'Reilly Media for best website on the rise.

Kendra Scott Expands to Louisiana

Jewelry retailer Kendra Scott will open its first location in Louisiana on April 7 in Baton Rouge at Perkins Rowe, an upscale open-air shopping mall. The Perkins Rowe location marks Kendra Scott's 11th storefront. The new store will showcase the designer's handcrafted jewelry, an interactive Kendra Scott Color Bar™ and space for special events. The Kendra Scott Color Bar allows shoppers to customize one-of-a-kind jewelry with a kaleidoscope of 26 gemstones and 23 jewelry silhouettes in both gold and rhodium silver settings.

CIRCA Opens in New Jersey

CIRCA opened a private office in Short Hills, New Jersey at 51 JFK Parkway. The new location will operate in partnership with the brand's New York City office to accommodate demand for services. The Short Hills office will be led by CIRCA's co-founder, Jeffrey Singer, a jewelry expert with more than 30 years of experience in the luxury jewelry industry.

Wearable Technology Gains in Popularity

Consumers are increasingly interested in wearable technology that can be attached to their existing jewelry, as well as new styles that come with technology, according to a recent study by the Jewelry Consumer Opinion Council (JCOC). The group found that durability, convenience and ease-of-use were the most important components for any wearable technology. When given the choice, respondents preferred a more traditional jewelry look in the tech piece than something that appeared more modern. High-tech watches were the most preferred wearable technology, with 55% of participants saying they would buy the device, followed by bracelets and wristbands with a 27% share.
MINING

Dominion's Sales Reach $752M

Dominion Diamond Corporation reported that sales rose 118% year on year to $751.9 million, while cost of sales surged 143% to $650.8 million for the fiscal year that ended on January 31. Gross margin as a percentage of sales fell to 13.4% from 22.5% one year earlier. Financing expenses jumped to $27.4 million from $9.1 million and exploration costs rose to $14.6 million from just $1.8 million.

Dominion Diamond recorded a profit of $471.2 million, or $5.64 per share, compared with profit of $35.2 million, or 41 cents per share, one year earlier, as a result of a $502.9 million gain from the sale of Harry Winston Inc. The company recorded a consolidated net loss from continuing operations attributable to shareholders of $23 million or 27 cents per share compared with profit of $22.3 million or 26 cents per share one year earlier.

For the period from April 10, 2013 to January 31, sales from the Ekati mine totaled $399.6 million and it incurred cash costs of production of $303.9 million. Total cost of sales for Ekati for the period was $392.9 million. Diavik recorded sales of $352.3 million for the entire fiscal year and incurred cash costs of production of $162.6 million. Total cost of sales for Diavik in the fiscal year totaled $257.9 million.

Diamonds Add $93M to Namibia's Income

Namibia's Mines and Energy Minister, Isak Katali, said diamonds contributed $81.7 million in federal revenue and another $11.3 million from local sales of diamonds by the Namibia Diamond Trading Company (NDTC) for the fiscal year that ended on March 31. Namdeb Holdings contributed $74 million in dividends, the largest amount of any firm. Katali told Parliament that as prices of rough diamonds have remained flat, manufacturing margins have diminished significantly, leading to some bankruptcies.

Botswana Diamonds' Loss Narrows

Botswana Diamonds plc reported a comprehensive loss of $370,000 (GBP 222,000) for the six months that ended on December 31, down from a loss of $470,000 one year earlier. Meanwhile, the explorer's assets rose 3.7% year on year to $11.1 million and its total equity increased 4.1% to $10.5 million. The focus of operations is firmly fixed on the Orapa area of Botswana where licenses indicate high potential for diamondiferous kimberlites.

Rockwell's Sales +69%

Rockwell Diamonds Inc. reported that diamond sales, excluding beneficiation, rose 69% year on year to $12.1 million in the fourth fiscal quarter that ended on February 28. By volume, sales increased 81% to 9,596 carats. Rockwell’s rough diamonds received an average price of $1,264 per carat, down 7% from one year ago. Diamond production at the company’s three operating mines in South Africa grew 39% to 2,676 carats, while total production rose 74% to 6,717 carats in part due to royalty agreements with contract miners.

Mountain Province Closes Placement

Mountain Province Diamonds Inc. closed a bought-deal private placement of common shares for gross proceeds of $16.2 million (CAD 17.9 million). BMO Capital Markets, on behalf of a syndicate including RBC Dominion Securities Inc. (the underwriters), sold 3.5 million common shares of Mountain Province for $5.10 per share, by way of a bought-deal private placement. The underwriters received a cash commission of 5% of the gross proceeds.

In addition, Mountain Province closed a concurrent non-brokered private placement of common shares for proceeds of $10.4 million. The common shares issued in the bought-deal and non-brokered private placements are subject to a four month hold period, expiring July 29, 2014. Proceeds will be used for the continued development of the company's Gahcho Kué project and for general corporate purposes.

DiamondCorp Raises $3.5M

DiamondCorp raised $3.5 million (GBP 2.1 million) through the placement of 41,525,000 ordinary shares at 5 pence each with new and existing institutional and private investors in the U.K. and South Africa. The proceeds will be used to fund corporate overhead during the next two years and for general working capital purposes. Development of its flagship underground mine, which is managed by DiamondCorp's subsidiary Lace Diamond Mines Ltd., is fully financed. Underground mining at Lace remains within budget and is on track to ramp-up for commercial production in the second half of 2015.

Diamcor Tender Tops $1M

Diamcor achieved $1.33 million from the sale of 4,395 carats during two rough diamond tenders held during the company's fourth quarter that ended on March 31. Proceeds included the sale of a 43.90-carat diamond that was recovered during the period and it sold for $317,924 or an average price of $7,242 per carat. As of March 31, the company had 1,000 carats of rough diamonds in inventory and those stones will be tendered during the next quarter. To date, Diamcor has sold 19,807.25 carats for $4.5 million or an average $229.43 per carat.

STATS
Russia

2013 data 000s cts. %Chng.
Rough production 37,884 8.5%
Rough exports 35,363 18.6%
Diamond imports 4.82mil
Japan

Dec. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $70 3% $874
USA

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,595 6% $3,482 10%
Polished exports $1,755 20% $3,090 4%
Net imports ($160) $392 89%

Rough imports $74 155% $127 87%
Rough exports $30 36% $87 85%
Net imports $44 $39 95%

Net diamond account ($116) $4

ECONWATCH
Diamond Industry Stock Report

U.S. and European shares slightly higher except for Charles & Colvard (-9%), JCP (-2%) and Movado (-2%). Indian shares advanced by mid-single digits except for Classic (-2%), Lyspa (-3%) and Ren. Jewellery (-2%). Mining shares were mostly higher as ALROSA (+11%) and Shore Gold (+21%) advanced the most. View the extended stock report.
Apr. 4 Mar. 27 Chng.
$1 = Euro 0.729 0.727 0.002
$1 = Rupee 60.19 60.33 -0.1
$1 = Israel Shekel 3.47 3.50 -0.03
$1 = Rand 10.64 10.58 0.06
$1 = Canadian Dollar 1.10 1.10 0.00

Precious Metals
Gold $1,286.70 $1,293.10 -$6.40
Platinum $1,438.00 $1,394.00 $44.00

Stock Indexes Chng.
BSE 22,509.07 22,214.37 294.70 1.3%
Dow Jones 16,572.42 16,264.23 308.19 1.9%
FTSE 6,649.14 6,588.32 60.82 0.9%
Hang Seng 22,565.08 21,834.45 730.63 3.3%
S&P 500 1,888.76 1,849.04 39.72 2.1%
Yahoo! Jewelry 1,046.76 1,016.82 29.94 2.9%
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Rapaport Weekly Market Comment Apr. 11, 2014

Polished markets stable but buyers are increasingly price sensitive as cutters try to raise prices due to expensive rough. Cutting center liquidity tightening due to high rough prices and GIA backlogs. Rough trading slows with premiums reduced on the secondary market. Zimbabwe plans UAE diamond embassy as Dubai sells $29M ($76/ct.) at inaugural Marange rough tender. Sotheby’s HK sells $107M (82% by lot) with brilliant-cut, 30.57ct., D, FL diamond selling for $6.5M ($214K/ct.). Hong Kong’s 2013 polished imports +9% to $18B, polished exports +6% to $12.2B. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED ON APRIL 18 DUE TO THE JEWISH HOLIDAY OF PASSOVER.


RapNet Data: Apr. 10

Diamonds 1,059,263
Value $7,062,048,002
Carats 1,168,183
Average Discount -26.42%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS


Apr-May
29-7
Tue-Wed


Rapaport Melee Auction

New York & Dubai

View Details.



May
7-14
Wed-Wed


Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com

QUOTE OF THE WEEK
It is encouraging to see how Dubai has developed tailor-made strategies to an industry which was new to them only 12 ago. We have been overwhelmed by the enthusiasm and conviction in which policies have been pursued and businesses successfully attracted. We are happy to be part of this success story and look forward to continue a mutual beneficial relationship with Dubai in the future exploration and exploitation of our diamond business.

President Robert Mugabe | Zimbabwe


Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp, Mumbai, Dubai and Shanghai. View jobs now.



INDUSTRY

Polished Prices +1%

Diamond markets were positive in March after the Hong Kong show demonstrated steady Chinese demand for commercial-quality diamonds. The recent Basel shows signaled robust demand for top-quality large diamonds, fancy colored diamonds and fine-cut fancy shape diamonds.

The RapNet Diamond Index (RAPI™) for 1-carat diamonds increased 0.8% during the month, while RAPI for 0.30-carat diamonds grew 3.8% and RAPI for 0.50-carat diamonds rose 2%. RAPI for 3-carat diamonds increased 1.4%. Prices firmed in all categories during the first three months of 2014 and the trade enjoyed its strongest quarter since early 2011.

The market is expected to slow in the second quarter as wholesale and retail jewelers have replenished their inventories and may restrain their buying at current higher polished price points. Liquidity has tightened as rough prices rose toward the end of March and banks are increasingly conservative in lending to the industry. While sentiment remains positive, diamond market growth is projected to stabilize in the coming months.

De Beers Sight Value at $700M

De Beers April sight closed with an estimated value of $700 million after the mining company raised its rough diamond prices by 3% to 4%. Box assortments were relatively unchanged and some ex-plan was offered. Trading on the secondary market subsequently slowed and premiums declined.

One sight participant claimed that the market for second-hand boxes is dead as the price increase made boxes very expensive. Rapaport estimates that rough prices have increased by approximately 7% to 10% since the beginning of 2014. Guy Harari, the CEO of Bluedax, observed that the market has slowed for better-quality, clean diamonds, while high-premiums remain only on low-end goods.

Other observations from the trade indicated that there are a lot of goods in the pipeline, liquidity is tight and turnaround times from the GIA are slow. Sightholders said they weren’t surprised by price increases since De Beers maintained prices at its previous February sight and premiums on boxes steady on the secondary market during March. They also noted continued strong demand for dossiers but argued that trends in other goods didn’t warrant a rough price increase that affected most boxes and categories.


RETAIL & WHOLESALE



LVMH Jewelry Division Sales Flat

LVMH's jewelry and watch division reported revenue of $841 million (EUR 607 million) for the first quarter that ended on March 31, basically the same as one year ago. However, comparable-store sales for the division rose 5%.

Overall LVMH group revenue rose 4% year on year to $9.9 billion in the first quarter. At constant-exchange-rates, comparable-stores sales rose 6%. The group noted continued growth in the U.S. and Asia, with strong growth specifically in Japan during the quarter. LVMH stated that the market in Europe demonstrated resilience despite a still challenging economic environment.

Sotheby's Jewels Sale at $107M

Sotheby's Hong Kong sale of magnificent jewels and jadeite achieved $106,615,865 and was 82.2% sold by lot. The top lot was the Hutton-Mdivani necklace, a highly important jadeite bead, ruby and diamond necklace singed Cartier, circa 1933, which sold for $27,441,026 to The Cartier Collection. Sotheby's confirmed the sales price was a world record for any Cartier jewel.

The Red Emperor, a Burmese ruby and diamond necklace that was set with 60 pigeon's blood rubies totaling 104.51 carats sold for $9,923,077, setting a record for any ruby and diamond necklace, according to Sotheby's. The sale also set a world record price for a 29.62-carat, oval Burmese ruby and diamond ring, mounted by Cartier, which sold for $7,338,462. The sale also featured a 30.57-carat, D, flawless unmounted brilliant-cut stone that sold for $6,548,718 and a 102.61-carat, cushion-shaped royal blue sapphire and diamond necklace that sold for $4,179,487.

Next month, three exceptional diamonds will highlight Sotheby's Geneva sale of magnificent jewels and noble jewels on May 13. Sotheby's will auction the historic Victory Diamond, which was named in honor of the allied victory in World War II. The original rough diamond weighed 770 carats and it was discovered in 1945 in the African Woyie River. Thirty diamonds were cut from that stone, the largest of which was the 31.34-carat, D, potentially flawless, type IIa step-cut Victory Diamond. Sotheby's priced this lot to sell for between $5 million and $8 million.

The Graff Vivid Yellow diamond also highlights the Geneva sale. This 100.09-carat diamond ring is described as "daffodil yellow" in color with exceptional beauty and extraordinary fire and brilliance, and it has a presale estimate of $15 million to $25 million. A third diamond, also by Graff, is a 103.46-carat, brilliant-cut diamond ring with a presale estimate of $3.5 million to $5 mill

Chow Tai Fook's Sales +22%

Chow Tai Fook reported unaudited group revenue grew 22% year on year, without citing hard totals, for the fourth fiscal quarter that ended on March 31. The retailer cited strong retail sales of mass luxury jewelry products especially gem-set jewels and steady recovery in wholesale revenue in Mainland China. The company noted that sales at new stores in Mainland China and Hong Kong and Macau made a meaningful contribution to group revenue. Group sales in Mainland China jumped 44%, while sales in Hong Kong and Macau fell by 3%. Group same-store sales during the quarter increased 4% year on year.

Independents: Who needs them?

Watch Now: Martin Rapaport, the chairman of the Rapaport Group, shares key measurements of success for the independent jeweler during a special presentation at the Centurion Show. Topics touch upon prices and trends, relationships with customers, merchandising and branding, and the way forward in a changing consumer environment.


Xcel Acquires Judith Ripka

Xcel Brands Inc. acquired the Judith Ripka brand and its intellectual property for approximately $22.5 million of which $14 million was paid in cash along with $6 million in interest-free promissory notes and 571,500 shares of common stock. In addition, Xcel will provide for up to an additional $5 million in contingent future payments, payable in cash or stock, based upon the achieving certain net royalties generated by the Judith Ripka brand during annual periods from October 2015 through September 2018.

The acquisition is expected to be accretive to Xcel's 2014 earnings. The Judith Ripka brand embodies Xcel's core mission of delivering products of uncompromising quality, according to the firm. Ripka will serve as chief designer under the new ownership.

Pandora Opens New Concept Stores

Pandora Jewelry opened two concept stores, one in the Baltimore and another in Washington, D.C., to serve visitors and communities at the Baltimore Washington International Airport (BWI) and the Georgetown shopping areas. The new store locations in Concourse B at BWI and Georgetown join the company's three existing owned and operated outlet stores in Hilton Head Island, South Carolina; Potomac in Woodbridge, Virginia and Rehoboth Beach, Delawa

Jostens Unveils Red Sox Rings

During opening day festivities at Fenway Park, the Boston Red Sox presented players and uniformed personnel and staff with their 2013 World Series Championship Rings that were created by Jostens. The rings were crafted in 14-karat white gold, featured 126 diamonds, 16 custom-cut sapphires and nine custom-cut rubies. The left side of the ring pays homage to Boston, while the right side of the ring features the individual person's name and number. It is also customized to highlight the number of World Series titles the individual has won with the Red Sox by portraying either multiple trophy images or the Fenway Park façade. The inside further memorializes the season with a Bearded Brothers image and 10-30-13, the date that the Red Sox brought the World Championship back to Fenway Park.


Israel Adopts 'Natural Is Real'

Israel's diamond industry is branding itself as the world's prime center for trading natural diamonds, according to Shmuel Schnitzer, the president of Israel Diamond Exchange (IDE). "By adopting the slogan 'Natural Is Real,' we are sending a clear message to the market that Israel's diamond trade is all about natural diamonds," he said during the U.S. & International Diamond Week in Ramat Gan. IDE's board banned trading of synthetic diamonds from the house floor.

Foreign Traffic Light at Diamond Week

The U.S. & International Diamond Week in Israel ended with "good" diamond trading opportunity, but nothing stellar with only a limited number of foreign buyers. Two reasons for light foreign traffic were heard on the trading floor: trade show fatigue and visitor visa issues. The industry just came off three tradeshows in Basel, and the Israel Foreign Ministry strike prevented many foreign buyers from receiving visas in time to attend diamond week. Nonetheless, attendees emphasized that goods were moving, especially for specialty diamond firms.

CIBJO, CIFA Sign Agreement

CIBJO and the Council of Independent Financial Advisors (CIFA) signed a cooperation agreement, the "Global Partnership for Development," which calls for the creation of a joint program to educate their respective members about the UN's post-2015 development agenda. The signing ceremony took place at UN headquarters. The partnership will focus on society, where the groups aim not only to eliminate negative elements from their industries, but ensure that the jewelry and gemstone industry delivers a peace dividend, according to Gaetano Cavalieri, CIBJO's president. "We are committed to the well-being of all our stakeholders. Nobody should be left behind," Cavalieri said.

In addition, CIBJO published a new report this week, prepared by the CIBJO Diamond Commission, which addresses the challenge posed by the influx of synthetic diamonds into the pipeline. There will be a special conference on this topic on the first afternoon of CIBJO's Moscow Congress, on May 19.

Roberto Coin Obtains New Trademark

The U.S. Patent & Trademark Office (USPTO) issued the trademark "The Perfect Diamond Hoop" to Roberto Coin Inc. of New York on April 1 with the registration number 4508353. The trademark refers to earrings and it was originally filed on April 16, 2013 at which time it was also first used in commerce.

The USPTO also assigned the trademark "TCC" on April 8 to Hong Kong Galaxy Jewelry Limited for goods and services including boxes of precious metals, bracelets, charms, diamond jewelry, gemstones, gold thread and precious metals.


MINING

ALROSA, DDE, GJEPC Sign Agreements

ALROSA signed cooperative agreements with both the Dubai Diamond Exchange (DDE) and India's Gem & Jewellery Export Promotion Council. ALROSA and DDE will further strengthen their relationship by jointly contributing to the development of a competitive rough and polished diamond market in Russia. ALROSA and the DDE will also frequently exchange expertise and information regarding the implementation of the Kimberley Process Certification Scheme and responsible sourcing of diamonds. Furthermore, both parties will participate at global industry events and seminars, to share market intelligence and identify new trends and technologies.

ALROSA and GJEPC agreed to exchange information on how to engage their sectors, share diamond trade statistics and market research, address Kimberley Process issues and jointly work to ensure separate sales of natural diamonds, diamond jewelry and synthetics.

Lucara Tender Achieves $50M

Lucara Diamond Corp. sold 1,191 carats of rough diamonds from its Karowe mine during an exceptional stone tender on April 10 and generated $50.47 million or $42,347 per carat. The company offered 20 single stone lots and all were sold. The highest value stones sold were a 167.10-carat and an 86.80-carat diamond that achieved $75,821 per carat and $58,627 per carat, respectively. Lucara held two regular diamond tenders during the first quarter of 2014 and the year to date total from the three sales was $84.06 million.

Marange Diamond Tender Totals $29M

The Dubai Diamond Exchange (DDE) reported that its inaugural Zimbabwe diamond tender, which was held from March 23 to 30, achieved a sales total of $29.2 million at an average price of $76 per carat. The highest price per carat reached $5,000, according to the DDE. The rough diamond tender was facilitated by Global Diamond Tenders in cooperation with the Dubai Multi-Commodities Centre (DMCC) and included diamonds from Anjin, Jinan, DTZ-Ozgeo, Diamond Mining Company (DMC), Marange Resources, Mbada Diamonds and Kusena.

Zimbabwe's Mine's Minister, Walter Chidhakwa said the tender earned $4.3 million for the government through royalties. The Minerals Marketing Corporation of Zimbabwe (MMCZ), Zimbabwe Mining Development Corporation (ZMDC), Marange Resources and Mbada Diamonds are listed on the U.S. Office of Foreign Assets Control (OFAC), which means that U.S. residents and businesses may not trade or purchase diamonds in any form from these firms.
Lucapa Raises $6M

Lucapa Diamond Company raised $5.5 million, less costs, through a share placement to advance its Lulo diamond concession in Angola. The placement is subject to the clearance of funds and involved issuing approximately 917 million new ordinary shares, together with approximately 458 million listed options at no further consideration on the basis of one option for every two placement shares. The options, which are to be listed and exercisable at 1 cent each on or before August 29, 2015, remains subject to shareholder approval.

Debmarine's Production +5%

Debmarine Namibia, a seabed diamond miner, reported diamond production rose by 5% year on year to 1.16 million carats in 2013. The company anticipates a similar volume this year. Debmarine generated revenue of $479 million from rough diamond sales. Debmarine plans to purchase a second seabed crawler for one of its five mining vessels at a cost of $9.6 million.

Stornoway Secures Funding Agreement

Stornoway Diamond Corporation entered into a financing agreement to raise $866.9 million (CAD 944 million) for construction at its Renard diamond project in Quebec. The agreement includes $360 million from private equity group Orion Finance, $202 million from Ressources Québec, a wholly-owned subsidiary of Investissement Québec and $96.4 million from Caisse de depot et placement du Quebec, a large institutional fund manager in the province.

The agreement also includes a public share offering and an equipment financing facility with Caterpillar Financial. Each element of the financing transaction is conditional on the completion of the others and the successful completion of the marketed subscription receipt offering. Construction at Renard is slated to begin in June this year with commercial production expected to commence in the third quarter of 2016.

North Arrow Begin Survey Program

North Arrow Minerals Inc. began its program of ground geophysical surveys for the Redemption diamond project in the Northwest Territories of Canada. The property is located 32 kilometers southwest of, and 47 kilometers west of the Ekati and Diavik diamond mines. Twenty-one grids are planned for the program, covering approximately 40 individual targets and North Arrow expects to complete the program in approximately 28 days. Survey results will be used to select targets for follow up exploration, including drilling.


STATS

Hong Kong

2013 $Mil. YOY %Chng.
Polished imports $18,015 9%
Polished exports $12,154 6%
Net imports $5,861 16%

Rough imports $1,932 14%
Rough exports $2,546 35%
Net imports ($614)

Net diamond account $5,8%

ECONWATCH

Diamond Industry Stock Report

Weak consumer spending sent U.S. retail shares lower, except for Zale, which was unchanged. European shares were mixed with LVMH (+6%) and Swatch (-2%) defining the spread. Indian shares higher except for Goldiam (-1%) and Titan (-2%). Mining stocks were largely unchanged except for Gemfields (+12%). View the extended stock report.
Apr. 10 Apr. 4 Chng.
$1 = Euro 0.720 0.729 -0.009
$1 = Rupee 60.09 60.19 -0.1
$1 = Israel Shekel 3.46 3.47 -0.01
$1 = Rand 10.47 10.64 -0.17
$1 = Canadian Dollar 1.09 1.10 -0.01

Precious Metals
Gold $1,318.10 $1,286.70 $31.40
Platinum $1,449.00 $1,438.00 $11.00

Stock Indexes Chng.
BSE 22,715.33 22,509.07 206.26 0.9%
Dow Jones 16,170.22 16,572.42 -402.20 -2.4%
FTSE 6,641.97 6,649.14 -7.17 -0.1%
Hang Seng 23,186.96 22,565.08 621.88 2.8%
S&P 500 1,833.08 1,888.76 -55.68 -2.9%
Yahoo! Jewelry 1,034.56 1,046.76 -12.20 -1.2%
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grofik napsal
Polished markets stable...

No to jsem si oddechl, uff... :roll:
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turtleoverhead napsal
grofik napsal
Polished markets stable...

No to jsem si oddechl, uff... :roll:


Som rád , že si v kľude. :twisted:
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Spoločnosť Krajiny Výmena Ticker Mena
Exchange Cena Rozdiel.
(%) Kapitalizácia
(výmenou meny) Kapitalizácia
(USD)
ALROSA
Rusko MICEX-RTS ALRS RUB 37404 -2091 275,479,174,425.00 7,659,965,644.00
ALROSA Nyurba
Rusko MICEX-RTS ALNU RUB 71000.000 0.000 56,800,000,000.00 1,579,379,093.00
Afri-Can Morské minerály
Kanada CVE-AFA AFA CAD 0.025 -16667 2,288,250.00 2,082,689.00
Diamond Fields International, sro
Kanada TSX Venture DFI CAD 0.025 0.000 2,962,500.00 2,696,368.00
Dominion Diamond Corporation
Kanada NYSE DDC USD 12.650 -3729 1,075,503,000.00 1,075,503,000.00
Firestone Diamonds PLC
Spojené kráľovstvo LON FDI GBX 3.600 2857 2,713,500,000.00 45,301,938.00
Gem Diamonds
Spojené kráľovstvo LON GEMD GBX 164250 -2954 22,710,847,500.00 379,158,062.00
Gemfields PLC
Spojené kráľovstvo LON GEM GBX 40375 -2917 21,802,500,000.00 363,993,182.00
KWG Resources Inc
Kanada CVE KWG CAD 0.070 -6667 48,830,600.00 44,443,979.00
Merlin Diamonds Limited
Austrália ASX MED AUD 0,075 -16667 13,183,500.00 12,375,387.00
Provincia Mountain Diamonds sro
Kanada NYSEAMEX MDM USD 4690 -1883 441,657,300.00 441,657,300.00
Peregrine Diamonds Limited
Kanada TSE PGD CAD 0,435 -1136 60,530,250.00 55,092,609.00
Petra Diamonds Ltd
Spojené kráľovstvo LON PDL GBX 145.500 -3833 74,146,800,000.00 1,237,882,337.00
Zdrojov a investície NL
Austrália ASX RNI AUD 0,095 4396 28,072,500.00 26,351,732.00
Rockwell Diamonds sro
Kanada TSE RDI CAD 0,320 -5882 15,660,800.00 14,253,936.00
Šmyková Diamonds Ltd
Kanada CVE SRM CAD 0,045 0.000 2,399,850.00 2,184,263.00
Shore Gold, sro
Kanada TSE SGF CAD 0.240 -15789 53,937,600.00 49,092,200.00
Stornoway Diamond Corporation
Kanada TSE SWY CAD 1.050 2941 147,882,000.00 134,597,251.00

Poznámka:
Tento zoznam zahŕňa spoločnosti, pre ktoré je ťažbou diamantov je hlavná činnosť.
citácie sa menia raz za týždeň.
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Kua budem to musieť zmenšiť , nevyšlo to. :x
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Rapaport Weekly Market Comment Apr. 18, 2014

Polished trading quiet due to holidays. Cutting center demand slows with weaker market conditions and high rough prices. ALROSA 2013 production +7% to 37M cts., revenue +12% to $4.7B, profit -5% to $885M. Rio Tinto 1Q production +13% to 3.7M cts. Luk Fook 4Q same-store sales -10%. Christie's NY jewels sale achieves $61M (82% sold by lot) with 22.60ct. & 22.31ct. D, IF pair of circular-cut diamonds selling for $191K per/ct. and a 6.10ct., VVS1 fancy intense-pink rectangular-cut diamond selling for $5.8M or $945K per/ct. U.S. jewelry store sales +4% to $3B in Feb. U.S. jewelry price inflation -3% in March. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED ON APRIL 18 DUE TO THE JEWISH HOLIDAY OF PASSOVER.


RapNet Data: Apr. 17

Diamonds 1,023,914
Value $6,525,356,932
Carats 1,130,065
Average Discount -26.64%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS
Apr-May
29-8
Tue-Thu
Rapaport Melee Auction

New York & Dubai

View Details.
May
7-14
Wed-Wed
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com
QUOTE OF THE WEEK
By the time you try to follow [a laundered] KP certificate, it has gone through so many layers and has been exchanged numerous times; you'd never be able to get to the country of origin. And the origin would, ultimately, show that licensed diamond dealer who was hired to get that certificate -- he or she would be on the certificate -- not the actual owner of the diamonds.

Eric Ives | FBI's Intl. Organized Crime Task Forces

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The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp, Mumbai, Dubai and Shanghai. View jobs now.

INDUSTRY

ALROSA's Profit -5%

ALROSA's profit fell 5% year on year to $885.3 million (RUB 31.8 billion) ‎in 2013 as foreign-exchange losses mounted due to a weakening ruble. Revenue from diamond sales grew 11% to $4.01 billion and total ‎group revenue, including non-diamond business unit sales, rose 12% to $4.69 billion. The quantity of gem-quality diamonds sold during the year rose 15% to 38 million carats. Group ‎production rose 7% to 36.9 million carats. ALROSA's cost of sales increased 19% to $2.27 billion, while group debt increase 13% to $3.85 billion. ALROSA noted that the average price of its gem-quality diamonds ‎fell 9% to $176 per carat during the year. Prices peaked at $192 per carat in the fourth ‎quarter rising from $185 per carat in the third quarter.‎


U.S. Jewelry Store Sales +4%

U.S. jewelry store sales rose 3.7% year on year to $2.914 billion in February, which included Valentine's Day. The rate of sales growth was identical to that of one year ago. Meanwhile, the consumer price index (CPI) for jewelry fell 2.6% during February. The CPI fell 2.5% in March. Jewelry store sales for the first two months of 2014 have risen 5.3% to $5.041 billion.

As previously reported by Rapaport News, preliminary jewelry sales across all retail segments in February improved 6% year on year to $5.842 billion, while watch sales jumped 8.9% to $783 million. In broader retail news, advanced estimates for U.S. department store sales in March fell 5.7% year on year to $13.47 billion, marking a steeper decline than February when sales fell 4.7% to $11.843 billion.


RETAIL & WHOLESALE

Luk Fook's Same-Store Sales -10%

Hong Kong-based jeweler Luk Fook Holdings reported that group same-store sales growth at its retail business dropped 10% year on year in the fourth quarter that ended on March 31. Without providing hard totals, the company reported same-store sales growth in Mainland China rose by 1%, while comparable-store sales declined 12% in Hong Kong and Macau. The group's gold product same-store sales growth fell 15% during the quarter and gem-set jewelry sales declined 2%.

Christie's Jewels Sale Garners $61M

Christie's New York sale of magnificent jewels achieved $60,561,125 and was 82% sold by lot. The top lot garnered $8,565,000 for a pair of circular-cut, D, internally flawless diamonds of 22.60 carats and 22.31 carats. Other top lots included a 40.43-carat, D, potentially flawless, oval-cut diamond that sold for $7,669,000; a 6.10-carat, VVS1, fancy intense pink, rectangular-cut diamond ring by Harry Winston which sold for $5,765,000 and a 20.10-carat, D, VVS1, rectangular-cut diamond by Harry Winston that sold for $2,461,000.

In May, Christie's Geneva will auction "The Blue," a 13.22-carat diamond with a presale estimate of $21 million to $25 million. The diamond is internally and externally bereft of any imperfections and it has been in the owner's possession for a long time. The Blue will be auctioned during the same sale as "The Ocean Dream," a 5.50-carat, fancy vivid blue-green diamond, with a presale estimate of $7.5 million to $10 million and "The Rajah" diamond, which has a presale estimate of $3 million to $5 million.

Michael Hill's Comps +5%

Michael Hill International reported that preliminary revenue increased 10.5% year on year to $350 million (AUD 372.1 million) for the nine months that ended on March 31. Comparable-store sales rose 5.4%. In local currencies, revenue in Australia increased 5.4%, while same-store sales rose 1.4% and in Canada, revenue surged 30.6%, while same-store sales jumped 9.4%. In New Zealand, sales fell 2.6% and same-store sales contracted by 2.6%, while in the U.S, revenue fell 7%; however, comparable-store sales increased 2.8%.


OFAC Adds Sino Zim, Sam Pa

The U.S. Treasury's Office of Foreign Assets Control (OFAC), which lists specially designated nationals and blocked persons, all of whom U.S. citizens and businesses must avoid, added Sino Zim Development Ltd. and Sam Pa on April 17, both of which are alleged to have ties with the diamond trade. OFAC sanctions already forbid U.S. citizens and business alike from conducting trade with, among many non-diamond entities, Marange Resources, Mbada Diamonds, Oryx Diamonds, the Zimbabwe Mining Development Corporation (ZMDC) and the Minerals Marketing Corporation of Zimbabwe (MMCZ), along with dozens of politicians, including President Robert Mugabe and most of his family.

Sino Zim Development also operates as Sino Zim Holdings and Sino Zimbabwe Cotton Holdings on the third floor of Livingstone House, 48 Samora Machel Avenue, Harare, Zimbabwe with a P.O. Box 7520 and a local telephone number of 04.710.043. Pa's aliases include Sam King, Samo Hui, Xu Jinghua, Tsui Kyung-Wha, Ghiu Ka Leung and Antonio Famtosonghiu Sampo Menezes. Pa was born on February 28, 1958, his nationality is from China, citizenship is from Angola and he has an alternate citizenship from the U.K. under the passport number C234897(0).


Tracking Crime, Supply Chain Threats

Crime against the U.S. diamond and jewelry industry has been greatly reduced in the past decade as a result of increased vigilance and a cooperative working relationship between Jewelers Security Alliance (JSA), the FBI and the Gemological Institute of America (GIA); however, threats do remain to both the safety of industry personnel and to the integrity of the supply chain.

Eric Ives, the unit chief for the FBI's international organized crime task forces, told Rapaport News that the free-flow of information between industry groups enables immediate tracking of crime patterns and suspicious activity. "JSA is the bridge between law enforcement and the jewelry industry," he said, and it fulfills training requests to local authorities as well as the FBI to keep on top of and identify crime patterns and suspicious activity to prevent crime.

Emerging industry threats that the FBI, JSA and the GIA are monitoring include numerous imports of fake colored gemstones and counterfeit jewelry, although there are no real clear trends yet to establish a pattern or source of origin. A second issue Ives noted, global authorities are observing Kimberley Process (KP) certificate laundering, whereas rough diamonds are removed from their original location, destined for another country and it is there they are presented for the first KP certificate.

But then these diamonds are transferred to yet another country for a second KP certificate so that the parcel's country of origin will be shown as mixed. Ives noted, too, that a corrupt KP licensed diamond dealer may obtain a certificate that reflects a substantially lower value for the goods, for example listing the diamonds' value at $10,000 when in fact the value may be $100,000, which then lowers the export tax due. In both cases, by the time the certificate goes through other corrupt cycles in the supply chain, the parcel of diamonds eventually reflects closer to market value but no clear indication of origin by time they reach Antwerp or New York, Ives stated.

He reminded the trade to be diligent, vigilant and to survey the environment for abnormal activity and to call police if anything appears to be suspicious. "Many jewelry crimes have been thwarted because they have read the JSA's crime alerts and call police before a crime happens to them," he said.

London Bourse Presents Membership to Shine

The London Diamond Bourse granted Varda Shine an honorary membership in recognition of her long standing service to the diamond industry. The recognition marks one of very few times the bourse granted this privilege. Shine stepped down from her role as CEO of the De Beers Group's Diamond Trading Company (DTC) at the beginning of 2014, after joining the company in 1984.

Victoria McKay, the chief operating officer of the London Diamond Bourse, said, “The London Diamond Bourse is delighted to present honorary membership to Varda Shine. Varda is a valued member of the diamond community. She brings to everything she does experience, astuteness, an incisive and clear mind, a respect for colleagues and, above all, a belief in innovation within the diamond industry. We are delighted to count her amongst our members.”

Saul Gottlieb Passes Away

Saul Gottlieb the founder of Gottlieb & Sons passed away at the age of 88. Originally from Ladomirova, Czechoslovakia, Gottlieb survived the Holocaust, was liberated in March of 1945 and after learning the craft of jewelry making in Antwerp, resettled in Cleveland, Ohio, with only $90 and limited knowledge of the English. He eventually built one of the largest and most well respected international diamond and jewelry manufacturing companies in the U.S. Gottlieb is survived by his wife, three sons and their wives, eight grandchildren and two great grandchildren.

Friends may contribute to the Gottlieb Family Holocaust Memorial Fund c/o B'nai Jeshurn, 27501 Fairmount Blvd. Pepper Pike, Ohio, 44124 or The Survivors Initiative c/o The Jewish Community Federation of Cleveland.


Court Upholds Most of Conflict Minerals Law

Companies covered by the Dodd-Frank Act continue to prepare Securities & Exchange Commission (SEC) filings on the origin of conflict minerals, according to the Jeweler's Vigilance Committee (JVC). The conflict minerals are tin, tantalum, tungsten and gold. In addition, companies covered by the law must exercise due diligence regarding their supply chains if the conflict minerals they use may have originated in the Democratic Republic of the Congo (DRC) or an adjoining country. Companies will only be able to comply with the requirements if they have the cooperation of their direct and indirect suppliers. Therefore, businesses in the supply chains of covered companies will continue to be called upon to provide information about mineral origin and to implement responsible supply chain processes.

The U.S. Court of Appeals for the District of Columbia Circuit issued an opinion that requiring certain companies to publicly report their products have “not been found to be ‘DRC Conflict-Free’” violates the First Amendment by unconstitutionally compelling speech. The ruling does not change the requirement that a disclosure must be made to the SEC if a company determines that its products contain minerals tainted by conflict. The disclosure, however, may be in language that the company chooses. The case has been returned to the District Court for further proceedings.



MINING

Rio Tinto's Production +13%

Rio Tinto's diamond production grew 13% year on year to 3.650 ‎million carats in the first quarter that ended on March 31. The increase was mainly the result of greater production at the company's Argyle diamond mine in Australia. Production at Argyle rose 24% to 2.461 ‎million carats due to higher-grade ore from the underground mine and processing of highly concentrated tailings.

Rio Tinto’s 60% share of production from the Diavik mine in Canada decreased 4% to 1.119 million carats. Rio Tinto’s 78% share in production at the Murowa mine in Zimbabwe decline 12% to 69,000 carats during the period as a result of lower grades, slightly lower ore processed and the impact of wet weather on mining operations, which were partially offset by processing previously stockpiled material. The company expects to produce 16 million carats in 2014.

Diavik Production -4%

Dominion Diamond Corporation reported that its share of production at Canada's Diavik mine dropped 4% to 746,000 carats in the first quarter that ended on March 31. The company, which owns a 40% stake in the mine, attributed the lower amount of carats produced to mining and processing a larger amount of lower-grade ore from the A-154 North pipe during the period. On a 100% basis, Diavik produced 1.9 million carats from 600,000 tonnes of ore during the quarter compared with 1.9 million carats produced from 500,000 tonnes one year ago.

Trans Hex Tender Achieves $10M

Trans Hex reported that the March tender of its South African diamond production garnered $10 million (ZAR 106.5 million) or an average $1,684 per carat from the sale of 5,886 carats of diamonds. Nine diamonds sold for over $10,000 per carat, including a 22.50-carat diamond from the Baken mine, which sold for over $49,000 per carat. Trans Hex's South African operations produced 52,081 carats for the year that ended on March 31, with 30,232 carats being produced just between October 2013 and March. The group will report its financial results in June.

ECONWATCH

Diamond Industry Stock Report

Mixed trading across the retail and wholesale sector with JCPenney (-12%) under pressure to perform better in the U.S., while Classic Diamond (+13%) and Goenka Diamond (+21%) show strong gains in India. Diamond mining shares all lower except for Firestone (+3%) and Stellar (+15%). View the extended stock report.
Apr. 17 Apr. 10 Chng.
$1 = Euro 0.723 0.720 0.003
$1 = Rupee 60.31 60.09 0.2
$1 = Israel Shekel 3.48 3.46 0.02
$1 = Rand 10.49 10.47 0.02
$1 = Canadian Dollar 1.10 1.09 0.01

Precious Metals
Gold $1,295.10 $1,318.10 -$23.00
Platinum $1,411.00 $1,449.00 -$38.00

Stock Indexes Chng.
BSE 22,628.84 22,715.33 -86.49 -0.4%
Dow Jones 16,408.54 16,170.22 238.32 1.5%
FTSE 6,625.25 6,641.97 -16.72 -0.3%
Hang Seng 22,760.24 23,186.96 -426.72 -1.8%
S&P 500 1,864.85 1,833.08 31.77 1.7%
Yahoo! Jewelry 1,027.83 1,034.56 -6.73 -0.7%
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Dokonca už aj v Angole sa trochu snažia. ;)

Angola arrests 37 illegal diamond miners



24.04.2014

The Angolan police have arrested 37 immigrants who were illegally mining diamonds in the central Bié Province.
State-owned news agency, ANGOP quoted a police spokesperson in Bié, chief superintendent António Hossi, as saying that the immigrants were from the Democratic Republic Congo (DRC), Mali and Congo Brazzaville.
Angola had recently introduced a programme to register and formalise activities of artisanal diamond miners to stem illegal mining.
The country’s minister of Geology and Mining, Francisco Queiroz told Rough&Polished last February that illegal immigrants were flooding mining regions.
He said that had brought management difficulties.
“We want to legalise [local] artisanal miners, however, they are several illegal immigrants. They created links, trading links, logistical and operational networks to avoid paying taxes and smuggle the money out of our country,” Queiroz said.
He said it was estimated that $150 million was being lost through illegal diamond mining and trading per annum.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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Rapaport Weekly Market Comment Apr. 25, 2014



Diamond trading very quiet during Passover and Easter holidays. Far East demand slow ahead of May 1 retail season. U.S. market stable. Good demand for GIA-dossiers with shortages due to grading delays. Liquidity problems developing in India as banks tighten credit conditions. De Beers 1Q production +18% to 7.5M cts. Petra Diamonds 3Q revenue +55% to $164M, production +15% to 743,424 cts. Lazare Kaplan 3Q revenue -6% to $14M. RapNet Melee Index (RMI) +5.4% to 137.6 in 1Q. GIA appoints Matt Crimmin VP of laboratory operations.


RapNet Data: Apr. 24

Diamonds 1,003,330
Value $6,394,010,240
Carats 1,110,593
Average Discount -26.72%

www.rapnet.com
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RAPAPORT ANNOUNCEMENTS
Apr-May
29-8
Tue-Thu
Rapaport Melee Auction

New York & Dubai

View Details.
May
7-14
Wed-Wed
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com
June
1
Sun
Rapaport Breakfast & Conference at JCK Vegas
Mandalay Bay Resort

8 a.m. to 10 a.m. | South Seas Ballroom
Breakfast and Martin Rapaport's ''State of the Diamond Industry'' presentation.

10:30 a.m. to 12:30 p.m. | Banyan Ballroom
Rapaport Certification Conference with RapNet insights into grading reports.

2 p.m to 4:30 p.m. | Banyan Ballroom
Rapaport Fair Trade Conference

Register; or email conference@diamonds.net or call 1.702.893.9400. These events are free but seating is limited.

QUOTE OF THE WEEK
There was increased inter-dealer trading and market liquidity in the first quarter as dealers sought to source diamonds while prices continued to rise. Prices have stabilized over the last few weeks and we anticipate the market to remain steady going into the second quarter.

Ezi Rapaport | Rapaport Group Trading

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INDUSTRY

RMI +2% in 1Q14

The Rapaport Melee Index (RMI™) for small diamonds increased by 5.4% to 137.60 during the first quarter of 2014, and rose 1.9% year on year in March. In addition, Rapaport Diamond Auctions sold over 125,000 carats of diamonds for $27.4 million during the first quarter. The diamond market had a positive first quarter as polished prices firmed throughout the period.

Polished demand was spurred by jewelers restocking after Christmas and Chinese New Year holidays. The March Hong Kong show demonstrated firm Far East demand with Chinese and Indian buyers back in the market. Trading activity is expected to stabilize in the second quarter now that wholesale and retail jewelers have replenished their inventories and may restrain their buying at current higher price points. Nevertheless, sentiment remains positive after a relatively strong first quarter.


De Beers Production +18%

De Beers production rose 18% year on year to 7.532 million carats in the first quarter, an increase that was largely attributed to easy comparisons given the impact of plant maintenance at the Orapa mine in Botswana and the ongoing recovery of a slope failure at the Jwaneng mine one year ago. This quarter, production at Orapa increased 54% year on year to 3.204 million carats, while production at Jwaneng rose 4% to 2.376 million carats.

Mining across South Africa was slowed by heavy rainfall, resulting in lower results, with Venetia's production down 17% to 531,000 carats and the Kimberley mine down 28% to 159,000 carats. Production at the Voorspoed mine rose 72% to 242,000 carats. Namdeb's production rose 1% to 432,000 carats and De Beers Canada production from the Snap Lake and Victor mines rose 3% to 409,000 carats. De Beers maintained guidance for the year at production levels between 30 million and 32 million carats.

ALROSA's Production +6%

ALROSA’s diamond production rose 6% year on year to 7.9 million carats in the first quarter that ended on March 31. The company noted that increased output stemmed from mining higher-grade ore at the Jubilee mine and expanded production at its Aikhal, International and Arkhangelskaya mines. Revenue from rough diamond sales rose 24% to $1.5 billion. The company sold 12.7 million carats, including 9.5 million carats of gem-quality diamonds at an average price of $155 per carat and 3.2 million carats of industrial diamonds with an average price of $12 per carat. Overall, rough prices rose 4% since the beginning of the year.

RETAIL & WHOLESALE

Wealthy Hold Jewelry Spending Steady

The American Affluence Research Center's (AARC) survey of wealthy U.S. household spending expectations for 2014 suggested a very minimal decrease for the jewelry and watches category. The survey focused on 11.4 million households, representing the wealthiest 10%. To varying degrees, slight declines were also indicated for spending expectations on non-designer and designer apparel and cameras and photographic equipment. AARC expected slight increases in spending for domestic vacation travel, home furniture/furnishings, major home appliances and home computer equipment, based upon index readings.

Of those who purchased jewelry or watches in the past 12 months, the survey found that 3% plan to spend more in the coming year, while 56% expect to spend about the same and 42% plan to spend less on this category. The AARC's propriety rating system resulted in an index reading of 61 points for the jewelry and watch category, which was down two points from the fall 2013 survey, one point lower than a year ago and the lowest index reading since the fall of 2010.

The demographic results revealed that the jewelry spending index was highest (at 69 points) for the age group under 50, while it was 61 points for those in the 50 to 59 age group and at 58 points for those over 60 years old. Surprisingly, the jewelry and watch index by gender was its lowest for all product categories with a score of only 53 points for women and 66 points for men. The jewelry spending index scored its best results for households with a net worth of $1.5 million to $5.9 million at 69 points and its lowest score fell into households in the $800,000 to $1.49 million range at 56 points.

Sotheby's to Narrow Loss

Sotheby’s reported that preliminary net auction sales rose 40% year on year to $730 million for the first quarter that ended on March 31. The improvement was primarily due to a $113 million, or a 34% increase in sales of impressionist and contemporary art. Nonetheless, Sotheby’s expects to report a pre-tax loss of $6 million for the period, compared with a pre-tax loss of $32 million one year earlier. Due to the seasonal nature of the art auction market, Sotheby's first quarters have historically represented a small proportion of annual sales, resulting in a net loss for the period. The company will report official results on May 7.

Simply Diamonds Acquires M.A. Reich

Simply Diamonds, a division of Jay Gems in New York, acquired color stone and diamond jewelry manufacturer and wholesaler M.A. Reich & Co. The terms of the deal were not disclosed. M.A. Reich is one of the oldest manufacturers of colored stones and men's fine jewelry dating back to its founding in 1919. Vinnie Davis and Bill Reich have stayed on with the company, which will be based out of 590 Fifth Avenue, New York City and will have a satellite office in Buffalo, New York. Simply Diamonds own the brands "Steal Her Heart"™ and "Heartbeat™".

Zale Plans Shareholder Meeting

Zale Corporation set a date for a special meeting of its shareholders to consider and vote on the proposed acquisition by longtime rival Signet Jewelers Ltd. The special meeting will be held on May 29 at 8 a.m. at Zale's principal executive offices, 901 West Walnut Hill Lane, Irving, Texas 75038. Zale's shareholders of record as of the close of business on April 30 will be entitled to notice of, and to vote at, the special meeting. The proposed acquisition is subject to approval by Zale’s stockholders and certain other customary closing conditions.

Hit a Home Run for the Millennial Wallet

De Beers marked a long winning streak for the jewelry industry when "Diamonds Are Forever" convinced post-WWII consumers in the U.S. to celebrate an engagement milestone with a diamond. And while this tagline worked very well for years to come, signs that the millennial generation don't buy into it presents an opportunity for jewelers to change the conversation, according to Unity Marketing.

"Millennials just aren't buying the traditional jewelry marketing paradigm that worked for previous generations. They need messages that are relevant to their lifestyles and a generation that is delaying, even foregoing, marriage in growing numbers doesn't necessarily care about researching the 4Cs or spending three month's salary on a chunk of pressurized charcoal," said Pam Danziger, the president of Unity Marketing.

Speak the language of the future -- jewelers today must know what type of jewelry looks great with a tattoo and they must convince millennial shoppers that a $700 piece of jewelry will bring as much pleasure as the latest tech toy. Fine jewelry need not be confined to hushed studios, hidden price tags and complicated information for it must become a fun and engaging experience, or the millennial consumer will walk right past the jewelry store and on to the next tech device, Danziger concluded.

Fairtrade Gold Opens New Scheme

The Fairtrade Foundation launched a new scheme for small jewelers, goldsmiths, silversmiths and artists in the U.K. to use ethically sourced Fairtrade gold and silver in their jewelry. A new Goldsmiths Registration Scheme represents the single most significant development in ethical sourcing since the launch of Fairtrade gold in 2011. Goldsmiths are being encouraged to register and help Fairtrade transform the lives of marginalized artisanal and small scale miners.

The Fairtrade system enables small jewelers to purchase certified Fairtrade gold and precious metals from a master licensee in a semi-finished form, such as sheet, wire, tube casting grain and use it in their work. Those who join the scheme agree to abide by certain terms and conditions that include, not being able to stamp your jewelry with the Fairtrade stamp, only using certain predetermined marketing materials and agreeing to the annual limits.

USPTO Assigns 'Le Vian Exotics'

The U.S. Patent & Trademark Office (USPTO) issued the trademark "Le Vian Exotics" to Le Vian Corporation of Great Neck, New York on April 15 with the registration number 4514707.

Le Vian first used "Le Vian Exotics" in commerce in March 2012 and it filed for the trademark on September 18, 2013. "Le Vian Exotics" refers to bangles, bracelets, cufflinks, diamond jewelry, earrings, gemstone jewelry, necklaces, pendants, pins, rings and watches.

GENERAL

DGSE Appoints New CEO

DGSE Companies Inc. appointed James D. "Dusty" Clem as chairman, president and CEO. Clem immediately replaced James Vierling, who resigned as CEO and director of the Dallas-based precious metal and jewelry wholesaler and retailer to accept a position with Elemetal LLC, DGSE's largest shareholder. Clem has served as the company's chief operating officer (COO) since December 2012. He was also vice president of sales and marketing from 2008 to 2012. The company also named its chief financial officer (CFO), Brett Burford, to the board of directors to take over Vierling's spot on the board.

In other news, DGSE completed the planned closure of all Southern Bullion locations this week. DGSE will continue to operate 12 retail locations, including nine Dallas Gold & Silver Exchange locations in Texas, one Bullion Express location in Illinois and two Charleston Gold & Diamond Exchange locations in South Carolina along with Fairchild International, the company’s wholesale watch division.


GIA Promotes Crimmin

The Gemological Institute of America (GIA) appointed Matt Crimmin as its vice president of laboratory operations. He will report to Tom Moses, GIA's executive vice president and chief laboratory and research officer, and be responsible for overseeing regional laboratory operations with a focus on Africa and the Middle East.

Crimmin helped lead operational aspects of GIA’s international lab expansion from 2006 to 2009 and has valuable experience with global management and strategic initiatives to the role. He joined GIA from multi-national consumer goods company Procter & Gamble and served as GIA’s director of laboratory strategic initiatives from 2010 to 2011.

Scio Introduces Lease Program

Scio Diamond Technology Corporation created a lease-a-diamond reactor program that essentially allows clients to guaranteed lab-created diamond supplies at regular intervals. Scio stated that it is prepared to offer up to a 5% discount over normal production costs, depending on the number of reactors leased and duration. Earlier this month, Scio announced its new 4" diamond growth technology, which claims to produce type IIa, single crystal CVD diamonds and will increase the production platform for the company's product line.


MINING

Petra's Revenue +55%

Petra Diamonds reported that revenue rose 55% year on year to $163.9 million during the third quarter that ended on March 31 as production rose and rough prices firmed. The company sold 905,781 carats, representing a year-on-year increase of 36%. Seven special stones sold for over $1 million, achieving a total of $39.9 million. These included the 29.60-carat blue diamond from the Cullinan mine, which fetched $25.6 million.

Group production rose 15% to 743,424 carats due to an increased contribution from the company's Finsch mine. The rise in production came despite higher than average rainfall in South Africa, which impacted ore treatment at the Finsch, Cullinan and Williamson mines. Petra noted that rough prices have risen about 10% since the first of the year.

Mwana's Production Doubles

Mwana Africa reported that diamond production at its Klipspringer slimes retreatment project in South Africa more than doubled to 12,383 carats during the fourth quarter that ended on March 31. The project achieved an average price of $21 per carat during the period. The company treated 16,000 tonnes of fine residue tailings at an average grade of 77.4 carats per hundred tonnes from the old Marsfontein mine through the plant. Work began at the project in October 2013.


Zimbabwe to Consolidate Marange Miners

Zimbabwe's state-run newspaper, The Herald, reported that the government may reduce the number of miners in Marange to just one or two, following a history of improper accounting for diamond operations and revenue. The winning firms would operate as joint ventures with the government.

Currently, seven operating diamond miners in the area are Anjin Investments, Diamond Mining Company, Gye Nyame, Jinan, Kusena, Marange Resources and Mbada Diamonds. The newspaper speculated that Marange Resources could survive as it is the only government-owned firm, managed through the Zimbabwe Mining Development Corporation (ZMDC). Mines and Mining Development Minister Walter Chidhakwa said he met the diamond miners and informed them that the changes were imminent. The decision is expected to be made by the middle of May.


ECONWATCH

Diamond Industry Stock Report

U.S. shares mainly flat except for Charles & Colvard (-9%), JCP (+9%) and Sotheby's (+7%). Hong Kong lower led by Luk Fook (-5%), Europe flat except for Kering (+3%) and India mixed with Goenka (+16%) pulling ahead and Winsome (-6%) leading declines. Mining shares mostly lower led by Stellar (-8%). View the extended stock report.


Apr. 24 Apr. 17 Chng.
$1 = Euro 0.720 0.723 -0.003
$1 = Rupee 61.13 60.31 0.8
$1 = Israel Shekel 3.48 3.48 0.00
$1 = Rand 10.62 10.49 0.13
$1 = Canadian Dollar 1.10 1.10 0.00

Precious Metals
Gold $1,292.80 $1,295.10 -$2.30
Platinum $1,408.00 $1,411.00 -$3.00

Stock Indexes Chng.
BSE 22,876.54 22,628.84 247.70 1.1%
Dow Jones 16,501.65 16,408.54 93.11 0.6%
FTSE 6,703.00 6,625.25 77.75 1.2%
Hang Seng 22,562.80 22,760.24 -197.44 -0.9%
S&P 500 1,878.61 1,864.85 13.76 0.7%
Yahoo! Jewelry 1,031.28 1,027.83 3.45 0.3%
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Rapaport Weekly Market Comment May 2, 2014


Diamond trading stable with good U.S. demand for commercial-quality diamonds. Sentiment improves as Dow hits record high. Far East markets quiet with cautious gold jewelry demand ahead of May Day holiday. Expectations for stable rough prices and small De Beers sight next week. Sotheby’s NY sells $44.3M (82% by lot) with 15.23ct., fancy intense orange pink, VS2 diamond sold for $6.1M ($400K/ct.). Blue Nile’s 1Q sales +7% to $104M, profit +30% to $1.1M. Belgium’s March polished exports +9% to $1.3B, rough imports +13% to $1.3B. India’s March polished exports -33% to $1.6B, rough imports -1% to $1.4B. Swiss watch March exports flat at $1.9B. UN lifts diamond ban on Cote d’Ivoire.


RapNet Data: May 1

Diamonds 1,056,965
Value $6,714,712,994
Carats 1,169,150
Average Discount -26.59%

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QUOTE OF THE WEEK
The SEC’s guidance makes clear that companies in our industry covered by Dodd-Frank must be ready to submit filings by June 2, 2014. This will require cooperation from every business in their gold and tungsten supply chains. Suppliers should take steps now to implement supply chain assurance systems.

Cecilia Gardner | Jewelers Vigilance Committee


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INDUSTRY

Swiss Watch Exports Flat

Swiss watch exports were flat year on year at $1.87 billion (CHF 1.65 billion) in March. Wristwatch exports dropped 1.1% to $1.75 billion, while the number of units shipped decreased by 3.8% to 2.1 million. The value of other products grew by 19% to $45.7 million. Exports to Hong Kong rose 9.3% to $371.4 million, while exports to China decreased 1.7% to $126.3 million. Exports to the U.S. slumped 12% to $201.6 million; however, exports to Japan surged 31.5% to $120.7 million ahead of a tax increase. Exports to the United Arab Emirates rose 1.4% to $99.9 million. During the first quarter of 2014, total Swiss watch exports rose by 4.5% to $5.61 billion, providing a good start to the year for Swiss watchmakers. The number of wristwatch units sold rose 1.5% to 6.4 million units.

Cote d'Ivoire May Export Diamonds

The United Nations (UN) Security Council unanimously approved removing an export ban on rough diamonds from Cote d'Ivoire. The resolution immediately terminated diamond sanctions that were imposed in 2005 and it noted that Cote d'Ivoire had met the minimum requirements of the Kimberley Process Certification Scheme. An arms embargo, however, was extended again until April 30, 2015. The Security Council called upon the government to continue taking measures "to dismantle the illegal taxation networks" but it welcomed "overall progress toward restoring security, peace and stability."

Dodd-Frank Paperwork Due June 2

The U.S. Securities and Exchange Commission (SEC) expects public companies and their supply chains to comply with the Dodd-Frank Act and file forms and reports required by its conflict minerals rules on or before June 2. The Jewelers Vigilance Committee (JVC) informed the trade that the SEC's guidance makes clear that the conflict minerals filings should comply with all aspects of the SEC rules, other than a specific obligation found to violate the First Amendment. Thus, covered companies must still inquire about the country of origin of conflict minerals – tin, tungsten, tantalum and gold. They must also report on their supply-chain due diligence regarding any conflict minerals that originated, or may have originated, in the Democratic Republic of the Congo or an adjoining country. JVC offers a do-it-yourself kit to implement assurance systems in the supply chain.


RETAIL & WHOLESALE

U.S. Jewelry, Watch Sales +2%

U.S. jewelry and watch sales improved slightly in March, according to preliminary statistics, and the rate of growth was revised lower for February. Sales of jewelry and watches combined increased 2.3% year on year in March as measured across all retail segments; however, the rate of growth one year ago was much stronger at 9.5%.

Government figures reflected sector growth of only 2.3% in February, following a preliminary increase of 6.4%. The revision was somewhat more in line with U.S. jewelry store sales, which increased 3.7% year on year to $2.914 billion in February. Jewelry sales in March increased 2.2% year on year to $4.968 billion, while watch sales rose 2.8% to $665 million, according to Rapaport News estimates. Meanwhile, the U.S. consumer price index (CPI) for jewelry declined 2.6% and the CPI for watches rose 0.6% in March.


Blue Nile's Profit +30%

Blue Nile reported that sales rose 6.8% year on year to $103.7 million for the first quarter that ended on March 30, while cost of sales increased 6.5% to $84.6 million. Profit jumped 29.7% to $1.1 million or 8 cents per share. U.S. engagement jewelry sales rose 8% to $59.7 million, while non-engagement sales increased 7.6% to $26.1 million. International sales improved 1.9% to $17.9 million; however, the rate of growth was 6.4% at constant exchange-rates. Gross profit margin was 18.4% of sales compared with 18.2% one year ago.

Looking ahead, Blue Nile anticipates sales of between $108 million and $113 million during the second quarter, which reflects little change from the second quarter of 2013. Earnings per diluted share are projected in the range of 18 cents to 21 cents, or slightly better than one year earlier.

Charles & Colvard Reports a Loss

Charles & Colvard Ltd. reported that revenue fell 7% year on year to $6.1 million in the first quarter that ended on March 31. However, U.S. sales rose 12% to $5.7 million, primarily due to an increase in the brand's direct-to-consumer business. International sales fell to just $400,000 compared with $1.4 million one year ago.

Loose jewel sales, including moissanite and Forever Brilliant&reg; moissanite, fell 15% to $3.7 million, while finished jewelry sales rose 11% to $2.4 million. Revenue from its wholesale business fell to $5.2 million compared with $6 million one year ago. Operating expenses rose 16% to $3.6 million and Charles & Colvard reported a loss of $1.1 million or 5 cents per share, compared with profit of $300,000 or 2 cents per share in the first quarter of 2013.

Platinum Jewelry Sales +11%

Platinum Guild International (PGI) recorded strong sales growth across the platinum jewelry sector in 2013 and the group extended a positive outlook for 2014 as well. PGI's Retail Barometer report, measuring sales from retailers to consumers, indicated that platinum jewelry sales in the U.S. rose 11% year on year in 2013. PGI anticipates that platinum jewelry sales will grow 11% again in 2014.

Retail demand for platinum jewelry is forecast to grow by 5.3% combined across the four key global markets (China, India, Japan and the U.S.). PGI expects the platinum jewelry market to grow 5% in China, the industry's largest market, India’s retail platinum market is expected to increase by 35% and Japan is forecast to grow by 1.2%.


Kashmir Sapphire Sets Record Price

Sotheby’s New York auction on April 29 continued the trend of level prices for top-quality diamonds, while lower color diamonds — J,K,L — between 5 carats and 15 carats saw remarkably strong prices. These stones are still affordable for both the trade and the consumer and are a lot of look for the money. The sale tallied up $44,313,500 and was sold 81.8% by lot.

The top lot of the day was a 15.23-carat fancy intense, orangey pink diamond that sold to a U.S. private for $6,101,000, or $400,590 per carat, against a presale estimate of $6 million to $7 million. Of particular note was the second top lot of the day, a 28.18-carat Kashmir sapphire and diamond ring that sold to an anonymous buyer for $5,093,000 or $180,731 per carat, setting a world auction record per carat price for a Kashmir sapphire. Bidding throughout the day was swift and decisive with prices staying within the estimates.


Prepare for a Tough GenZ Crowd

While executing a marketing strategy to connect with the millennial shopper, start preparing for Generation Z because they will be one tough, but lucrative, crowd. Even though GenZ loosely defines teenagers today, Match Marketing determined that 29% of this age group lives in U.S. homes with annual incomes in excess of $100,000 and these young consumers have a lot of cash to spend on fashion and accessories.

However, connecting with teens could break retailers who attempt using the millennial way. Abercrombie & Fitch, American Eagle and Aéropostale, for example, are all experiencing their greatest sales declines on record, in part because GenZ are nonconformists. GenZ is multicultural, they consume hours of digital video and are fascinated with celebrity fashion but desire uniqueness in everything they wear.

“Some of the most important vehicles for retailers in this space have become haul videos, celebrity photos and bloggers’ picks,” Liz Crawford, the vice president of Match Marketing, told STORES Magazine. Two-thirds of teens shop on websites and “cherry-pick items from any number of retailers.” Digital entertainment is “emerging as a new retail channel. Teens are shopping contextually and sharing [and] celebrities have become the new mannequins.” Furthermore, the research found that given a choice between technology and fashion, teens would spend $500 on tech toys because the accessories industry fails to excite and engage them.


Mother's Day Jewelry Sales Weaken

The National Retail Federation (NRF) and Prosper Insights & Analytics determined that U.S. consumers will celebrate Mother’s Day by staying practical in their spending patterns. Overall, 84.5% of U.S. adults plan to celebrate Mother's Day and expect to spend an average of $162.94 on gifts this year, down from $168.94 one year ago, according to the survey results.

Roughly 31.7% of consumers who celebrate Mother's Day intend to purchase jewelry as a gift this year, which is down 2.7 percentage points from 2013, according to the survey. This segment of the consumer population anticipates spending $94.38 on jewelry gifts, on average, which is down from $100.55 one year ago. The NRF predicted that total jewelry spending for the occasion will amount to $3.65 billion, down from $4.23 billion in May 2013. The survey revealed that men who expect to purchase jewelry for Mother's Day will spend $113.26 on average, while female shoppers planned to spend $68.62. By age group, the NRF found that 35 to 44 year olds expect to spend the most on jewelry with an average amount per buyer of $122.67.


CTF Reiterates Gold Pricing Process

Chow Tai Fook (CTF) reiterated that it is not involved in gold price fixing following allegations in the media. Chow Tai Fook stated that it uses its own gold pricing mechanism, has never been involved in any price fixing activities and gold product prices are set based on numerous measurable factors. The group also explained that it uses the international gold price as a major reference.

This represents a second time the company has been accused of price fixing activities, with the first accusation made in July 2013, when a media report claimed that Chow Tai Fook was being investigated in a probe involving price manipulation by a number of jewelry retailers in Shanghai.

In other news, a Shanghai court ruled in favor of Chow Tai Fook in an intellectual property lawsuit against Shang Hai Li Jin Jewellery Co., and Shang Hai Zhang Liang Jeweller, regarding the brand's Ping An Bao Bao product. The defendants were ordered to cease all infringement activities and pay damages to Chow Tai Fook for producing imitations of the produ

GENERAL



WDC Elects Board

The World Diamond Council (WDC) elected a new board of directors that equally represent five diamond industry sectors.

Mining
• Andrey Polyakov, ALROSA Group
• Andrew Bone, De Beers Group
• James R.W. Pounds, Dominion Diamond
• Jean-Marc Lieberherr, Rio Tinto

Retail
• Kent Wong, Chow Tai Fook
• Roberto Coin, Roberto Coin
• Mark Jenkins, Signet Jewelers
• Ronnie VanderLinden, U.S. Coalition

Wholesale
• Stephane Fischler, AWDC
• Anoop Mehta, Bharat Diamond Bourse
• Shmuel Schnitzer, Israel Diamond Exchange
• Ernie Blom, WFDB

Manufacturing
• Mervin Lifshitz, BDMA
• Vipul Shah, GJEPC
• Avi Paz, IDI
• Elliot Tannenbaum, Leo Schachter

At Large
• Gaetano Cavalieri, CIBJO
• Maxim Shkadov, IDMA
• Nigel Paxman, Malca-Amit
• Edward Asscher, Royal Asscher



De Beers, Rio Tinto Receive Trademarks

The U.S. Patent & Trademark Office (USPTO) issued the trademark "Jeweller of Light" to De Beers Diamond Jewellers Ltd. of London on April 22 with the registration number 4519299. De Beers filed for the trademark on May 31, 2012 and first used "Jeweller of Light" in June 2013. The USPTO also issued the trademark "The Diamond. The Promise." to De Beers with the registration number 4516967.

In addition, the USPTO issued the trademark "Mixed Medium" on April 22 to Rio Tinto London Ltd. with registration number 4519446. The trademark refers to rough and polished diamonds and gemstones, jewelry, watches and parts, as well as wholesale and retail store services, advertising, marketing, analytics and promotion services related to the jewelry Indus

GIA Addresses Service Time

The Gemological Institute of America (GIA) changed how it expresses lab service time by publishing location and service specific “Return Date” in place of “Turnaround Time.” The return date defines when stones and reports will be ready for pickup or shipment, unlike turnaround time where it takes into account weekends and holidays and is divided by weight range. GIA will continue the Fast Track program, with allocations based on 10% of a client’s first quarter submissions. Return dates for colored diamonds and pearls will be published in similar fashion. Given a high intake volume, GIA expects to increase grading staff, expand facilities where possible, invest in new technology and continue to make the process more efficient.


MINING

ALROSA Repays $820M

ALROSA issued an $820 million loan repayment three months early against long-term bank loans of $1.09 billion. Now, bank loans and public debt instruments account for $4 billion, with long-term debt share of 88%. Debt increases of $270 million were justified by creating a liquidity source for $500 million of Eurobond repayment in November 2014.


PL 117 Team Scopes New Kimberlite

Botswana Diamonds completed its initial fieldwork on the PL 117 license, a 2.9-square-kilometer area in the Orapa region of Botswana. The explorer's joint-venture partner, ALROSA, identified PL 117 as a high-priority target and as expected, initial results scoped out new kimberlite pipes, particularly in the north of the block. Two drill targets have already been identified and Botswana Diamonds anticipated that further drill targets will be sought as the second batch of mineralogical samples is fully analyzed. A specific drilling program will then target areas of highest potential.

A team of senior geologists and geophysicists from both companies identified drill targets on the license by conducting magnetic and electromagnetic geophysical surveys to reveal a new map of the magnetic field. In addition, heavy mineral sampling was carried out and some of those samples have been analyzed by ALROSA. A second, larger batch of samples is currently on its way to Russia for priority mineralogical analysis.


KDL Revenue -50%

Kimberley Diamonds Ltd. (KDL) reported that revenue declined 50% year on year to $15.5 million during the company's third quarter that ended on March 31. The company sold 21,431 carats for an average $725 per carat during the period, 39% less than one year ago. Management explained that the company sold fewer carats as it processed lower-grade stock piles from the Ellendale 9 (E9) pit as a result of a rock slippage underneath the main haul ramp in June 2013. Group production dropped 39% to 22,280 carats.

Firestone Extends Lease Agreement

Firestone Diamonds signed an agreement with Lesotho extending its lease on the Liqhobong diamond mine and reducing initial royalty payments, while committing to pay withholding tax. Under the agreement, the initial license period on the company's mine lease has been extended until June 31, 2021.

Firestone also has the option to renew the license for two more stretches of 10 years each, which would extend its ownership of the mine site until 2041. Firestone owns a 75% stake in the mine with the remaining interest held by the government of Lesotho. Lesotho agreed to reduce the royalty rate paid by the mining company on diamond sales of first production from 8% to 4% until the company earns $20 million from the royalty rate reduction. Thereafter, the royalty rate will revert to 8% of diamond sales.


STATS

Belgium

March $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,320 9% $3,920 18%
Polished imports $1,459 15% $3,654 14%
Net exports ($139) $266 108%

Rough imports $1,340 13% $4,050 17%
Rough exports $1,371 -2% $4,037 13%
Net imports ($30) $14

Net diamond account ($109) $253

India

March $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,571 -33% $5,386 -8%
Polished imports $789 -30% $1,865 -15%
Net exports $782 -36% $3,521 -11%

Rough imports $1,410 -1% $4,162 12%
Rough exports $182 -8% $421 -23%
Net imports $1,231 0% $3,741 18%

Net diamond account ($449) ($221)


ECONWATCH

Diamond Industry Stock Report

U.S. shares lower except for JCPenney (+2%), Signet (+2%) and Walmart (+2%). Hong Kong and European shares flat except Kering (+4%). Indian shares mixed with Classic and Goenka (both +20%) leading gains and Winsome (-9%) leads declines. Mining shares lower except for ALROSA (+4%), Lucara (+1%) and Stellar (+4%). View the extended stock report.
May 1 Apr. 24 Chng.
$1 = Euro 0.720 0.720 0.000
$1 = Rupee 60.32 61.13 -0.8
$1 = Israel Shekel 3.46 3.48 -0.02
$1 = Rand 10.49 10.62 -0.13
$1 = Canadian Dollar 1.10 1.10 0.00

Precious Metals
Gold $1,284.30 $1,292.80 -$8.50
Platinum $1,420.00 $1,408.00 $12.00

Stock Indexes Chng.
BSE 22,417.80 22,876.54 -458.74 -2.0%
Dow Jones 16,558.87 16,501.65 57.22 0.3%
FTSE 6,808.87 6,703.00 105.87 1.6%
Hang Seng 22,133.97 22,562.80 -428.83 -1.9%
S&P 500 1,883.68 1,878.61 5.07 0.3%
Yahoo! Jewelry 1,045.32 1,031.28 14.04 1.4%
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Rapaport Weekly Market Comment May 9, 2014

Polished markets stable as dealers prepare for Las Vegas shows. NY Diamond Dealers Club busy during Antwerp Diamond Week. Far East wholesale demand quiet despite robust jewelry sales during May Day holiday. Liquidity problems increasing in India. De Beers plans 5% annual price hike to meet Anglo American profit targets. Rough trading stable following small De Beers sight. April RapNet Diamond Index (RAPI™) for 1ct. -0.5%. Titan Company 4Q revenue +7% to $465M, profit +12% to $34M. U.S. March polished imports +1% to $2B, polished exports +26% to $1.9B. Antwerp Diamond Bank 2013 profit -31% to $7.9 million.

RapNet Data: May 8

Diamonds 1,057,117
Value $6,717,697,404
Carats 1,167,868
Average Discount -26.86%

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QUOTE OF THE WEEK
U.S. Congress should urge the administration to work with the Kimberley Process to send review missions to the United Arab Emirates, Belgium and India for investigating the smuggling of conflict diamonds from Central Africa Republic.

Kasper Agger | Center for American Progress

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INDUSTRY

Polished Prices Drop in April

Diamond markets slowed in April although sentiment remained positive. Demand softened as jewelers reduced their buying after replenishing their inventory during the first quarter. Demand was selective and price sensitive. Far East markets were quiet with cautious gold jewelry demand, while U.S. demand was stable. Diamond trading was sporadic with many dealers taking vacations during the Passover and Easter holidays.

The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 0.5% during the month, while RAPI for 0.30-carat diamonds declined 1.3% and RAPI for 0.50-carat diamonds dropped 0.9%. RAPI for 3-carat diamonds fell 1%. There was good demand for 0.30-carat to 0.50-carat pointer-size, SI-clarity diamonds, with shortages due to continued delays of grading by the Gemological Institute of America (GIA). Liquidity is tight in the manufacturing centers as turnover for polished diamonds has been prolonged by delays at the GIA, and as the Indian banks have tightened their credit conditions.

Rough trading softened in April after prices increased by an estimated 7% to 10% during the first quarter of 2014. Expect the market to stabilize in May and June, but trading is anticipated to remain below levels seen in the first quarter.

Gold, Silver Prices to Weaken

Global gold and silver mine production is set to achieve record highs in 2014, according to Metals Focus’ inaugural Gold & Silver Mining Focus report. In terms of prices, following poor performance in 2013, attitudes toward gold and silver among mainstream investors, have been shifting away from the one-sided selling to a more balanced perspective.

Metals Focus expects broad consolidation for gold and silver and the highest prices for these metals may have already been reached this year. On the downside, further price weakness from current levels is possible. Gold could experience a brief drop to around $1,100 per ounce. It is a broadly similar picture for silver, in part governed by gold’s moves and expect the full year average to fall just short of $20 per ounce.


RETAIL & WHOLESALE

U.S. Chain-Store Sales +6%

U.S. chain-store sales rose 6% year on year in April, boosted by the Easter festival, according to the International Council of Shopping Centers (ICSC). The group estimated that a later Easter subtracted about 1% from retail sales figures in March. Comparable-store sales for March and April combined rose 4.5%, which was still above the trend so far in 2014. ICSC research forecasts that same-store sales in May should increase between 3% and 3.5%.

Kering's Jewelry Sales Rise

Kering, the parent company of several luxury brands, including Gucci, Boucheron and Bottega Veneta, reported that revenue rose 1.2% year on year to $3.3 billion (EUR 2.398 billion) in the first quarter that ended on March 31. Comparable-sales rose 4.1% but luxury division same-store sales jumped 6.3%. The retailer observed that jewelry and watch sales improved toward the end of the quarter and that Boucheron recorded good revenue growth in the first couple of months of the year.

Kering also reorganized its luxury couture and leather goods business under the direction of Marco Bizzarri and created a luxury watches and jewelry sector, which will fall under the responsibilities of Albert Bensoussan.

Retail Sales Decline for Berkshire

Berkshire Hathaway, the parent company of Ben Bridge Jeweler, Borsheims Fine Jewelry, Helzberg Diamonds and the Richline Group among many other diverse product and services brands, reported that net earnings declined 3.8% year on year to $4.7 billion for the first quarter that ended on March 31. Total company revenue rose 3.6% year on year to $45.5 billion, while costs and expenses rose 6.2% to $38.9 billion.

Berkshire’s retail division sales, which include the jewelry ‎companies, four home furnishing businesses, Pampered Chef, Oriental Trading Company and See’s Candies, experienced a 1.7% year on year decline at $970 million. Operating earnings for the retail division plunged 39.7% to $44 million.

Titan's Profit +12%

Titan Company, the parent company of the Tanishq jewelry brand in India, reported that sales rose 7% year on year to $464.6 million (INR 27.86 billion) in the fourth quarter that ended on March 31. Company profit grew 12% to $34.4 million, while the company's expenses increased by 7% to $421.3 million. Jewelry sales rose 3% to $358.4 million, while watch sales grew 20% to $83.6 million. Sales from Titan's other businesses, which include eyewear, precision engineering and accessories, jumped 13% to $24.4 million.

Titan expanded its retail network during the previous 12 months, adding 125 stores to close the year with 1,078 stores, representing 1.5 million square feet of retail space.


Citizen to Open in Times Square

Citizen Watch Company will debut its global flagship store in Times Square, New York City, at 1500 Broadway, marking the brand's first global retail concept store in North America. Citizen hired New York-based architectural firm Mapos LLC for the project and expects to open in November, in time for Christmas-shopping season.

Forevermark Enters Turkey

Forevermark expanded its reach into Turkey with the appointment of local licensee partner, Zen Diamond. Forevermark diamonds will be exclusively available in 25 Zen Diamond stores in the key cities of Istanbul, Antalya, Ankara, Samsun and Mersin. Zen Diamond hosted the media and VIPs at a gala event in Istanbul to celebrate the partnership.

Stephen Lussier, Forevermark's CEO, explained that Zen Diamond shares De Beers passion for beautiful, rare and responsibly sourced diamonds. "We are delighted to have them on board and look forward to introducing Forevermark into this exciting market with them," Lussier said.

Millionaires Bullish on Stocks & Experiences

While U.S. affluents account for about 20% of households, those with investable assets of more than $1 million represent 8% and their spending intentions this year are focused on investment and experiences rather than jewelry, according to a CNBC and SpectremGroup survey. Top spending categories for millionaire households included entertainment, home enhancements, including furnishings, and travel destinations.

The top luxury item on the list for millionaire women was an automobile, while men favored investments. Household investment allocation placed equities first (46%), followed by fixed income (21%), short term offerings (14%), international stocks (7%), real estate (3%), precious metals (2%), hedge funds and collectibles, such as art and jewelry, at only 1%, according to survey results.

Lessons From a $70 Jacket

U.S. income demographics have basically changed forever, and affluent consumers are turned off by yesterday's symbols of wealth, according to Unity Marketing. However, this is far from signaling gloom and doom: Jewelers who capture the changed meaning of consumption in people's lives will flourish. The middle class is severely weakened and will not be a consumption powerhouse anytime soon, and affluents, both HENRYs (incomes of $100,000 to $250,000) as well as ultra-affluents ($250,000+), are turning sympathetic to the plight of income inequality.

Affluents want understated, even modest, expressions from the fashion industry, focusing on substance and quality at a price that respects the customer's intelligence, according to Pam Danziger, the president of Unity Marketing. "There is a new kind of conspicuous consumption today required in a political environment that is demonizing income inequality and the excesses of the 1%. Rather than conspicuous consumption and status symbols that proclaim one's wealth, the affluent are embracing brands that give them bragging rights to how smart a shopper he or she is," she said.

What was the hottest luxury item among U.S. affluents this past winter? The UNIQLO ultralite down jacket that retailed for $70. The successful jeweler of the future will capture this new psychology of consumers and offer understated elegance, with inherent quality and lasting value.

Ahluwalia Creates 'Nurture By Reena'

Jewelry designer and diamond industry insider Reena Ahluwalia created the brand "Nurture By Reena" to showcase her latest designer collections. The Nurture By Reena line of jewelry will be committed to using fully disclosed, certified lab-grown diamonds that are origin-guaranteed, conflict-free and environmentally sustainable.

“The Moments Collection,” the first offering, combines diamond jewelry and wearable technology, merging style and fashion with personal meaning, according to Ahluwalia. Using QR Code technology, this offering creates a new ecosystem that allows the client to attach a precious moment to the jewel. The lab-grown diamond pieces flip to discreetly reveal a QR code that is otherwise hidden from view while the jewelry is being worn.

GENERAL
Rapaport Announces Lab Take-In Service

HRD Antwerp and the Rapaport Group signed an agreement whereby Rapaport will provide global access to HRD diamond grading laboratories in Antwerp and Mumbai. The service will include everything necessary for clients to have their diamonds graded by HRD laboratories and will be initially provided to clients in New York, Ramat Gan, Mumbai, Surat, Dubai and Hong Kong.


NY Hosts Antwerp Trade Event

The New York Diamond Dealers Club (DDC) and Beurs voor Diamanthandel noted healthy trading during the first Antwerp Diamond Week in Manhattan, which enabled members of both clubs to conduct business and build relationships. The DDC orchestrated additional festive events for attendees and both club presidents vowed to host another trade event in the not too distant future.


ADB's Profit -31%

The Antwerp Diamond Bank (ADB), a subsidiary of the KBC Bank, reported that its balance sheet fell 7% year on year to $2.4 billion (EUR 1.692 billion) in 2013. Global net interest income rose almost 13% to $73 million, while interest income from debtors accounted for $69 million as a result of increased margins in the second half of 2013. Profit fell 31% to $7.9 million. ADB confirmed a capital adequacy ratio of 11.29% during the year, compared with 10.05% in 2012. ADB is being divested from KBC through Jiangsu Yinren Group Company Ltd. The transaction is pending and subject to approval.

Sotheby's, Third Point Reach a Deal

Sotheby's and Third Point LLC jointly agreed to expand the board of directors of the auction house following a contentious battle for control in the past nine months. Third Point's founder Daniel S. Loeb and his nominees, Olivier Reza and Harry J. Wilson, have been appointed to Sotheby's board and they will now be included in the company's own slate of director nominees for election at the 2014 annual meeting of shareholders. The annual meeting will be planned later to allow for shareholders to receive updated proxy materials.

Third Point agreed to a customary standstill and voting commitments and terminated its proxy contest against Sotheby's board. Sotheby's will accelerate the termination of its one-year shareholder rights plan, concurrent with the 2014 annual meeting, and Third Point, whose ownership in Sotheby's will be capped at 15%, has withdrawn its litigation with respect to the rights plan.


Tax Office Investigates Dealers

The Mumbai Income Tax (IT) authority confiscated paperwork and merchandise from 17 companies across the bourse following an investigation. Inside sources told The Times of India that the IT team extended a search and seizure operation to the Mahidharpura diamond market in Surat, where some of the diamond firms in Mumbai have their offices. Sources in Surat's tax department added that the investigation may even be continued for some time.

MINING
Lucara's Profit -18%

Lucara Diamond Corporation reported revenue of $32.8 million in the first quarter that ended on March 31, which was unchanged from one year earlier. However, the average price per carat for the rough diamonds sold rose 35.6% year on year to $305. Company profit fell 17.7% to $5.1 million or 1 cent per share.

Lucara noted that proceeds of $750,000 from rough diamond sales were received after the quarter closed and the figure will be added to second quarter results. At an average operating expense of $118 per carat, Lucara's cash operating margin during the quarter was $187 per carat. The company's cash balance on March 31 was $56.8 million compared with a net debt position of $26.2 million one year earlier. Lucara's board of directors declared the company's first semi-annual dividend of 2 cents per share payable on June 19.

Lucara renewed its revolving term credit facility with The Bank of Nova Scotia for a three year term and an increased the limit to $50 million. The facility will contain financial and non-financial covenants customary for a facility of this size and nature.

Gemfields' Production -45%

Gemfields reported that production of emeralds and beryl at the Kagem mine in Zambia dropped 45% year on year to 3.6 million carats during the third quarter that ended on March 31. The decline in output was a result of unseasonably high amounts of rainfall in Zambia coupled with grade-volatility which impacted mining during the period. The company extracted 1.2 million carats of ruby and corundum during bulk-sampling at the Montepuez ruby mine in Mozambique, compared with 500,000 carats in the corresponding period one year ago.

In other news, Gemfields received $13.5 million from the auction of 268,000 carats of predominately high-quality emeralds in Jaipur.


Agnico Eagle Backs Stornoway Vote

Stornoway Diamond Corporation entered into a voting support agreement with Agnico Eagle Mines Limited, which agreed to vote in favor of a previously announced financing package. On April 9, Stornoway secured a financing agreement that includes a series of transactions, totaling $860 million (CAD 944 million) through Orion Co-Investments I Limited, Ressources Québec and the Caisse de dépôt et placement du Québec for the construction of the Renard diamond project.

Agnico Eagle owns 14,752,244 common shares of Stornoway, representing approximately 9.7% of the outstanding common shares and approximately 8.4% of the outstanding common shares and non-voting convertible shares of Stornoway.


Peregrine Completes Maiden Report

Peregrine Diamonds Ltd. estimated inferred mineral resources of 7.47 million carats of diamonds to a depth of 250 meters, based upon its maiden report of the CH-6 kimberlite pipe at the Chidliak diamond property in Canada. Production grade totaled 2.58 carats per tonne of ore and an average price of $213 per carat, modeled from within the range of $163 to $236 that was determined earlier by WWW International Diamond Consultants. The report estimated between 2.6 million tonnes and 3.47 million tonnes of kimberlite ore was worth targeting for further exploration and Peregrine is planning a core drilling program at CH-6 in an effort to convert the tonnage estimate into an inferred resource.


STATS

USA

Mar. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,974 1% $5,456 6%
Polished exports $1,883 26% $4,973 11%
Net imports $91 -80% $483 -28%

Rough imports $82 115% $209 97%
Rough exports $55 150% $142 109%
Net imports $26 63% $65 81%

Net diamond account $117 -75% $548 -22%



ECONWATCH

Diamond Industry Stock Report

U.S., Hong Kong and European shares all lower with the exception of JCP, Tiffany and LVMH all up 1% or less. Indian shares mixed with Goldiam (+26%) and Rajesh Exports (+12%) pulling ahead. Little change in mining shares except for Stornoway (-17%) and Stellar (-25%). View the extended stock report.
May 8 May 1 Chng.
$1 = Euro 0.722 0.720 0.002
$1 = Rupee 59.94 60.32 -0.4
$1 = Israel Shekel 3.45 3.46 -0.01
$1 = Rand 10.34 10.49 -0.15
$1 = Canadian Dollar 1.08 1.10 -0.02

Precious Metals
Gold $1,289.80 $1,284.30 $5.50
Platinum $1,432.00 $1,420.00 $12.00

Stock Indexes Chng.
BSE 22,344.04 22,417.80 -73.76 -0.3%
Dow Jones 16,550.97 16,558.87 -7.90 0.0%
FTSE 6,839.25 6,808.87 30.38 0.4%
Hang Seng 21,837.12 22,133.97 -296.85 -1.3%
S&P 500 1,875.63 1,883.68 -8.05 -0.4%
Yahoo! Jewelry 1,065.21 1,045.32 19.89 1.9%
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Rapaport Weekly Market Comment May 16, 2014

Indian market optimism surging ahead of expected Modi victory. Surat lays foundation for diamond bourse in effort to shift trading from Mumbai. Rough markets stable following estimated $560M De Beers May sight. Auction markets for large stones booming. Christie’s Geneva sells $154.2M (85% by lot) with pear, 13.22ct., fancy vivid blue diamond selling for $23.8M ($1.8M/ct.). Sotheby’s Geneva sells $141.5M (89% by lot) as cushion, 100.9ct., fancy vivid yellow diamond fetches $16.3M ($163K/ct.). Gem Diamonds YTD sales +70% to $82M, average Letšeng price +70% to $2,723/ct. Sarine 1Q revenue +21% to $24M, profit +13% to $9M. Edward Asscher elected president of World Diamond Council.


RapNet Data: May 15

Diamonds 1,059,790
Value $6,770,665,929
Carats 1,176,834
Average Discount -26.57%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS


May-Jun
19-2
Mon-Mon


Rapaport Jewelry Sale

New York & Las Vegas

View Details.

June 1 Sun
Rapaport Breakfast & Conference at JCK Vegas
Mandalay Bay Resort

8 a.m. to 10 a.m. | South Seas Ballroom
Breakfast and Martin Rapaport's ''State of the Diamond Industry'' presentation.

10:30 a.m. to 12:30 p.m. | Banyan Ballroom
Rapaport Certification Conference with RapNet insights into grading reports.

2 p.m to 4:30 p.m. | Banyan Ballroom
Rapaport Fair Trade Conference

Register; or email conference@diamonds.net or call 1.702.893.9400. These events are free but seating is limited.

June
2-11
Mon-Wed
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com
QUOTE OF THE WEEK
The board and I will give new energy to implement the Kimberley Process, which has been so successful in preventing conflict diamonds getting into the trade. Consumers must remain able to maintain confidence in our products and the wellbeing of all who are involved in the diamond trade must be the focus of our mission. That is the legacy which I want to be able to pass onto the next generation of young adults who work in the diamond industry, wherever they are in the world.

Edward Asscher | World Diamond Council

Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

INDUSTRY

De Beers Sight Estimated at $560M

De Beers May sight closed with an estimated value of $560 million as the rough diamond market remains steady. Sightholders reported that prices on some boxes were adjusted slightly; however, on average, prices and assortments were basically unchanged.

Overall market conditions signal high rough price levels, very little manufacturing profit margins but goods are selling and demand is stable. Dealers noted that rough trading on the secondary market has slowed with boxes selling at premiums of around 5%. The rough and polished markets have entered a more typical slow season pattern. Liquidity remains tight but the ability to sell a high volume of polished is also subdued from the backlog at the Gemological Institute of America (GIA).



Rapaport Fair Trade Jewelry Conference

Leading organizations and members of the jewelry industry will be meeting in Las Vegas on June 1 to discuss what can and should be done to improve social responsibility in the diamond and jewelry trade. This is your opportunity to learn about what you can do to ensure the legitimacy of your supply chain and develop strategies that will help you increase your business with socially conscious consumers.

The conference is free and open to all. Rapaport is pleased to announce that Vipul Shah, the chairman of the Gem & Jewellery Export Promotion Council (GJEPC) of India will address attendees for the first time.

Panelists will include:
Ruben Bindra, AGTA
David Bonaparte, Jewelers of America
David Bouffard, Signet Jewelers
Eric Braunwart, Columbia Gem House
Gaetano Cavalieri, CIBJO
Douglas Hucker, AGTA
Ngomesia Mayer-Kechom, DDI
Christina Miller, Ethical Metalsmiths
Kenneth Porter, ARM
Martin Rapaport, Rapaport Group
Vipul Shah, GJEPC
Ronnie VanderLinden, WDC, IDMA, DMIA
Register now to reserve a seat and receive the agenda.


RETAIL & WHOLESALE

Christie's Jewels Sale Tops $154M

Christie's Geneva sale of magnificent jewels achieved a record $154,193,622 and was 85% sold by lot. Harry Winston Inc. bought the top lot, a 13.22-carat, pear-shaped blue diamond that sold for $23,795,372 or $1,799,953 per carat, an auction record price for a blue diamond. Harry Winston named the diamond "The Winston Blue."

Other top lots included a Belle Epoque diamond devant-de-corsage brooch made by Cartier in 1912 that sold for $17,581,612, and a cut-cornered square-cut light pink, VVS1 diamond necklace of 76.51 carats, by Leviev, which established a new world auction record price for a light pink diamond, selling for $10,000,825, or $130,712 per carat. The "Ocean Dream," a 5.50-carat, SI1 triangular-cut fancy vivid blue-green sold for $8,633,798, a new auction record price for a blue-green diamond.

Sotheby's Jewels Sale Tops $141M

Sotheby's spring sale of magnificent jewels and noble jewels in Geneva achieved $141,492,079 and was 88.7% sold by lot. The top lot was "The Graff Vivid Yellow," a 100.09-carat, VS2, cushion-shaped, fancy vivid yellow diamond ring that sold for $16,347,847, a new world auction record for a yellow diamond. The second top lot was a 70.33-carat, D, flawless, type IIa, cushion brilliant-cut diamond that sold for $14,201,354.

A new world auction record price per carat was achieved by the sale of a 25.32-carat, D, IF round brilliant-cut diamond graded by GIA as type IIa with excellent polish, cut and symmetry, which sold for $6,246,702, or $246,710 per carat. Two other price-per carat records were set with a 12.07-carat, internally flawless, fancy pink marquise-cut diamond ring at $601,228 per carat and a 10.11-carat, VS2, fancy light pink, round brilliant-cut diamond that sold for $393,071 per carat.

Richemont's Profit +3%

Richemont reported that sales rose 5% year on year to $14.6 billion (EUR 10.649 billion) for the fiscal year that ended on March 31. Profit rose 3% to $2.8 billion and included $292 million of currency hedging gains. Jewelry sales at the company's maisons, including Cartier and Van Cleef & Arpels, increased 4% year on year to $6.1 billion as the segment benefited from additional store openings with strong demand for jewelry and moderate demand for watch collections at Cartier tempered by lower wholesale orders. Specialty watchmaker sales rose 9% to $4 billion with improved sales at Baume & Mercier.


Pandora's Profit +61%

Pandora's revenue rose 29.5% year on year to $478 million (DKK 2.59 billion) in the first quarter that ended on March 31. Profit jumped 60.7% to $129.9 million. Gross margin as a percentage of sales improved to 69.1% compared with 65.6% one year earlier. The number of unit sales during the quarter rose 26.6%, while the average sales price per unit increased slightly to $24.17.

In local currency, sales increased 9.2% in the U.S. but surged 42.1% for the other regions of Pandora's Americas division. Sales jumped 16.1% in Australia; however, the increase was in excess of 200% for the other markets across the group's Asia-Pacific region. In Europe, Pandora's sales in local currency rose 52.3% in the U.K. and 12% in Germany, while other markets in Europe jumped 55.2%.

U.S. Jewelry Store Sales +2%

U.S. jewelry store sales rose 2.2% year on year to $2.376 billion in March. The increase was in line with overall U.S. jewelry and watch sales growth during the month, which improved 2.3% to $5.633 billion, according to preliminary estimates reported by Rapaport News on May 1. However, price pressure on jewelry continued to ease in March, as the consumer price index dropped 2.6%. Jewelry store sales have risen 4.7% year on year to $7.335 billion for the first three months of 2014.

Meanwhile, advanced estimates for retail sales at U.S. department stores in April revealed an increase of 3.4% year on year to $13.01 billion. Retail and food services sales in April rose 4% to $434.6 billion. Retail trade sales improved 4.2% and nonstore retail sales jumped 6.5%.

U.S. Online Sales +12%

U.S. online retail sales as measured through desktops rose 12% year on year to $56.1 billion in the first quarter that ended on March 31, according to comScore Inc. Sales that were conducted through a mobile device rose 23% to $7.3 billion. Top performing categories during the period were apparel and accessories, consumer packaged goods, sport and fitness, digital content and subscriptions, and home and garden, all of which experienced at least a 13 percent increase compared with the first quarter of 2013. Desktop ecommerce accounted for 11.7% of consumers’ discretionary spending, which comScore stated was the highest share on record.

The jewelry and watch category, which recorded "strong sales growth," ranked No.12 in dollar value by comScore's measure of total sales, just behind sports and fitness items and ahead of flowers and gifts.

Cash America's Profit +4%

Cash America International Inc. reported that revenue increased 5.3% year on year to $493.1 million in the first quarter that ended on March 31. Expenses rose 8.4% to $210.9 million. Profit improved 4.1% to $45.7 million or $1.55 per diluted share. Overall, there were lower losses from online consumer loans, strong ecommerce revenue and weaker net proceeds from the sale of commercial jewelry. The value of jewelry held for one year or less jumped 26.7% year on year to $108.1 million, while the value of jewelry held for more than one year increased 61.4% to $5.2 million. Total merchandise held for disposition increased 32.2% to $194.2 million.

DGSE Reports a Loss

DGSE Companies Inc. reported that revenue plunged 32% year on year to $19.9 million in the first quarter that ended on March 31 due to significant decreases in both bullion and scrap sales as a result of weak gold prices. However, gross profit margin rose to 22.3% compared with 18.1% in large part due to an increase in high-margin jewelry sales, coupled with improved margins on bullion and scrap sales. DGSE recorded a loss of $523,000 or 4 cents per share compared with a profit of $300,000 or 2 cents per share one year earlier.

U.S. Jewelry CPI -4%

The U.S. consumer price index (CPI) for jewelry declined 3.7% year on year to 169.63 points in April, which was the lowest in 39 months and ended the longest stretch on record of readings in excess of 170 points. The CPI for watches, meanwhile, was basically flat in April, down by 0.3% to 121.12 points. The average price of gold in April was down about 11% year on year, while platinum was down nearly 4%. The RapNet Diamond Index (RAPI), the global benchmark for polished prices, fell 3% year on year for 1-carat diamonds, while RAPI for 3-carat diamonds dropped 2.3%. However, RAPI for 0.30-carat diamonds jumped 10.8% and the index increased 4.2% for 0.50-carat stones.


Tiancheng Plans June Sale

Tiancheng International will hold its spring sale of jewelry and jadeite on June 8 in Hong Kong, featuring a "no reserve" section of 70 lots included in 360 lots of Chinese and Western jewels that are expected to achieve more than $40 million (HKD 300 million). The jadeite section encompasses top old-mine jadeite, designer jadeite and a series of jadeite cabochons.

Some of the highlights include a five-strand natural saltwater pearl and diamond necklace; a 39.24-carat natural, untreated Pamir spinel and diamond ring and a natural jadeite leaf, ruby and yellow diamond and diamond pendant, with a pair of matching pendent earrings.


TIG Seeks to Prevent Zale's Acquisition

TIG Advisors LLC, which owns approximately 9.5% of Zale's shares, seeks to block the jeweler's merger with Signet, citing a "grossly unfair" price per share offering at $21 along with several problematic issues in how Signet valued Zale and proposed the deal. TIG argued that Zale was trading at an EV/EBITDA multiple of 9.1 times 2016 analyst estimates, implying a $31 share price, or worst case $25 before the merger was announced.

Zale and its financial advisor, Merrill Lynch, Pierce, Fenner & Smith Inc. relied on stale financial forecasts prepared before July 31, 2013 in evaluating fairness to stockholders. Additionally, TIG believes Golden Gate’s representative on Zale's negotiation committee created an inherent conflict of interest and that BofA Merrill Lynch was conflicted and not in the best position to provide a fairness opinion on the proposed merger given its prior involvement with Signet. Zale never explored interest in a sale and no parties sought competitive bids. TIG intends to pursue an appraisal claim against Signet to compel additional consideration for its interest.



GENERAL

U.S. Confirms Fake KP Certificates

The U.S. government warned that several scams are involving Kimberley Process (KP) Certificates. Traders were invited to Sierra Leone to view rough diamonds that were later evaluated as fake and were provided with a fake KP certificate numbered Sierra Leone (SL) 004199, issued in either April or May 2014. Variations of certificate SL 004199 have been presented to prospective diamond purchasers in the past three weeks. Diamond traders and business community members are also urged to be on alert for that fake certificate. Report fake certificates to the U.S. Customs and Border Protection at kpmailbox(at)dhs.gov and to the Department of State at uskimberleyprocess(at)state.gov.

In the past year, fake KP certificates have also been arriving in the U.S. from Guinea, Ghana and Sierra Leone through an online advance-fee scheme that defrauds people of thousands of dollars.

WDC Elects Asscher as President

The board of directors for the World Diamond Council (WDC) elected Edward Asscher, a fifth generation diamantaire who heads the Royal Asscher Diamond Company of the Netherlands, as its new president. Additionally, the WDC elected Andrew Bone, the head of government and industry relations for De Beers Group, as vice president and Ronnie VanderLinden, the representative of the U.S. coalition and the president of the Diamond Manufacturers and Importers Association of America (DMIA), as treasurer.

Asscher will serve as president for a single two-year term, following which he will be succeeded by the sitting vice president.

Sarine's Profit +13%

Sarine Technologies Ltd. reported that revenue grew 21% year on year to $24.4 million during the first quarter that ended on March 31. Profit rose 13% to $9.1 million. Sarine noted that revenue rose across most geographic segments and stemmed mainly from increased sales of its Galaxy family of products, as well as increased sales of the company's traditional products.


MINING

Letseng Sales Rise

Gem Diamonds Limited reported that revenue from the Letšeng mine in Lesotho rose 75% year on year to $81.9 million from the first three diamond tenders of the year. Sales by volume rose 4% to 30,060 carats, while the average price jumped 70% to $2,723 per carat. Altogether, 81% of the mine’s revenue during the quarter was generated from the sale of 171 rough diamonds that were greater than 10.8 carats. Production at Letšeng rose 39% to 26,055 carats during the first quarter.


Brazil Minerals Earns $500K

Brazil Minerals Inc. generated $500,000 from the sale of diamonds, common stock and two-year options to four investors. The diamonds, which the company stated were graded by the Gemological Institute of America (GIA), can be delivered through December 31, 2015. Brazil Minerals began selling a portion of its production as polished diamonds this year in an effort to tap higher margins from the market and the company has received more than $1.5 million from this strategy so far this year. Brazil Minerals mines rough diamonds and gold, and owns interests in titanium, vanadium and iron projects in Brazil.


Stellar's Tongo Grade Increases

Stellar Diamonds reported that ongoing bulk sampling at its Tongo kimberlite dyke 1 project in Sierra Leone has yielded a 12% higher diamond grade than previously reported. To date, 730 carats were recovered at a grade of 134 carats per hundred tonnes (cpht). The company expects that the grades will further increase after re-processing the sample material. The JORC resource currently stands at 1.1 million carats at a grade of 120 cpht for just one of four kimberlite dykes within the license area.


Gemfields Partners With Select Jewelry

Gemfields will partner with jewelry manufacturer Select Jewelry Inc. for distribution of specialty jewelry pieces at big box retailers in North America and Canada. Select Jewelry will design and produce jewelry collections with emeralds and rubies that are sourced from Gemfields. The mining company chose the manufacturer for its reputation and track record of creating and delivering high-quality, modern jewelry.


ECONWATCH

Diamond Industry Stock Report

U.S. and Hong Kong shares mixed, with Charles & Covlard (+26%) rising on analyst reports that it was bargain; Signet (-3%), Tiffany (-3%) and Chow Sang Sang (-2%) led declines. Europe mainly higher except for Damiani (-10%). Indian shares mixed with Titan (+14%) and Classic (-15%) defining the spread. Mining shares lower except for ALROSA (+10%), Firestone (+3%) and Rio Tinto (+5%). View the extended stock report.
May 15 May 8 Chng.
$1 = Euro 0.729 0.722 0.007
$1 = Rupee 59.43 59.94 -0.5
$1 = Israel Shekel 3.46 3.45 0.01
$1 = Rand 10.41 10.34 0.07
$1 = Canadian Dollar 1.09 1.08 0.01

Precious Metals
Gold $1,296.40 $1,289.80 $6.60
Platinum $1,462.00 $1,432.00 $30.00

Stock Indexes Chng.
BSE 23,905.60 22,344.04 1,561.56 7.0%
Dow Jones 16,446.81 16,550.97 -104.16 -0.6%
FTSE 6,840.89 6,839.25 1.64 0.0%
Hang Seng 22,730.86 21,837.12 893.74 4.1%
S&P 500 1,870.85 1,875.63 -4.78 -0.3%
Yahoo! Jewelry 1,076.44 1,065.21 11.23 1.1%
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Rapaport Weekly Market Comment May 23, 2014

All eyes on Vegas with expectations that the JCK show will signal healthy U.S. demand. Rough markets steady despite tight liquidity and polished supply backlog. Indian stock markets and rupee strengthen following election, RBI relaxes gold import rules. Jewelers improve margins in 1Q: Tiffany sales +13% to $1B, profit +50% to $126M; Signet sales +6% to $1.1B, profit +5% to $97M; Zale revenue -3% to $431M, profit +75% to $9M. Belgium’s April polished exports -11% to $1B, rough imports -7% to $1.3B. Hong Kong’s 1Q polished imports +10% to $4.9B, polished exports +19% to $3.5B. Dominion sells 841,000 cts. for $175.5M in 1Q. Global 1Q gold jewelry demand -18% to $23.7B.

RapNet Data: May 22

Diamonds 1,098,508
Value $6,901,284,787
Carats 1,215,836
Average Discount -26.59%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS

May-Jun
19-2
Mon-Mon
Rapaport Jewelry Sale

New York & Las Vegas

View Details.

June
1
Sun

Rapaport Breakfast & Conference at JCK Vegas
Mandalay Bay Resort

8 a.m. to 10 a.m. | South Seas Ballroom
Breakfast and Martin Rapaport's ''State of the Diamond Industry'' presentation.

10:30 a.m. to 12:30 p.m. | Banyan Ballroom
Rapaport Certification Conference with RapNet insights into grading reports.

2 p.m to 4:30 p.m. | Banyan Ballroom
Rapaport Fair Trade Conference

Register; or email conference@diamonds.net or call 1.702.893.9400. These events are free but seating is limited.
June
2-11
Mon-Wed
Rapaport Single Stone Auction

New York & Israel

www.rapaportauctions.com

QUOTE OF THE WEEK
The CanadaMark program provides assurance that a diamond was mined in Canada and in a responsible manner. It represents the company’s commitment to category marketing of Canadian diamonds. Through this program, the company aims to highlight the long-term environmental stewardship and social responsibility of the Canadian diamond mining industry, which ultimately will help achieve the highest prices for the company’s diamond production.

Robert Gannicott | Dominion Diamond

Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.


INDUSTRY

Mokaila and Shah to Address Rapaport Event

The honorable Onkokame Kitso Mokaila, Botswana's Minister of Minerals, Energy and Water Resources, will address the international jewelry trade at the annual Rapaport Breakfast at JCK Vegas on Sunday, June 1, from 8 a.m. to 10 a.m. in the South Seas Ballroom, Mandalay Bay Hotel. The minister will provide a brief presentation outlining Botswana’s strategic role and aspirations for the diamond and jewelry industry.

In addition, a brief presentation will also be made by Vipul Shah, the chairman of India’s Gem and Jewellery Export Promotion Council.

Martin Rapaport’s annual “State of the Diamond Industry” address at the breakfast will highlight “The Last 18 Inches,” emphasizing the vital role played by retail jewelers who sell diamonds across their 18-inch showcase to their customers. His talk will include a strategic analysis of the challenges and opportunities confronting jewelers who face a rapidly changing consumer demographic. He will also address what must be done to maintain the “diamond dream” that is fundamental to diamond demand.

RBI Relaxes Gold Import Rules

The Reserve Bank of India (RBI) will allow star trading houses (STH) and premier trading houses (PTH) to import gold under the 20:80 scheme. The decision follows recent presentations made by jewelers, bullion dealers, authorized dealer banks and trade bodies in an effort to ease restrictions on gold imports. RBI initially implemented the 20:80 scheme to help combat the country's current account deficit (CAD) and banned nominated banks and agencies, premier or star trading houses from importing gold for use in the domestic market in June 2013.

The RBI will also permit banks to provide gold metal loans (GML) to domestic jewelry manufacturers out of the eligible domestic import quota of 80% to the extent of GML outstanding on their books as of March 31, 2013. This means that no credit sale of gold in any form will be allowed for domestic use, except for GML.

Gold Jewelry Demand -18%

Global demand for gold jewelry fell 18% year on year to $23.73 billion in the first quarter that ended on March 31, according to the World Gold Council (WGC). The decrease was price related as gold demand for jewelry by volume actually rose 3% to 570.7 tonnes, representing the strongest start to the year for jewelry since the first quarter of 2005.

WGC noted a 10% increase in demand for gold jewelry from China, which became the largest market for gold in 2013. The average weighted price of gold for the period fell 21% year on year to $1,293.10 per ounce. Overall, gold demand, including supplies for jewelry, technology, investment and from central banks, fell 21% to $44.67 billion, while by volume, demand held steady at 1,074 tonnes. Demand for gold jewelry in India dropped 9% by weight to 145.6 tonnes, mainly as a result of ongoing import restrictions coupled with further import obstacles as a result of the country's government elections. By value, India's demand fell by 28% to $6.053 billion.

RETAIL & WHOLESALE

Tiffany's Profit Pops

Tiffany & Co. reported that sales increased 13% year on year to $1.012 billion for the first quarter that ended on April 30. The retailer's cost of sales rose 7.7% to $422.6 million and profit jumped 50.2% to $125.6 million or 97 cents per share. One year ago, Tiffany & Co. recorded a pre-tax expense of $9 million for staff and occupancy reductions, which impacted profit. Gross margin rose to 58.2% compared with 56.2% in the first quarter of 2013. The increase reflected favorable product costs and price increases across all product categories and regions, according to the company.

Comparable-store sales in the retailer's first quarter improved 9% worldwide and by region, same-store sales rose 7% in the Americas, 8% for Asia-Pacific, 21% in Japan and 4% in Europe. The value of inventory increased 6% to $2.42 billion, short-term borrowing rose 11% to $241 million, while long-term debt was reduced by 0.8% to $750.8 million.


Signet's Profit Improves

Signet Jewelers reported that revenue rose 6.3% year on year to $1.06 billion in the first quarter that ended on May 3. Comparable-store sales improved 3.3%, while ecommerce sales surged 24.4% to $38.7 million. Cost of sales increased 6.2% to $648.9 million, while profit improved by 5.2% to $96.6 million or $1.20 per diluted share. Gross margin as a percentage of sales was slightly higher at 38.6% compared with 38.5% one year ago. The value of Signet's inventory increased 6.9 percent year on year to $1.52 billion.

By region, Signet's U.S. division sales rose 5.4 percent to $903.5 million and same-store sales increased 3.2%. The retailer observed stronger consumer demand for fashion diamonds, bridal brands and watches. In the U.K., revenue improved 3.2% in local currency, which at $151.7 million, translated into a 12.4% improvement. Same-store sales rose 4.1% and sales increases were driven primarily by fashion jewelry, bridal brands and fashion watches.

In other news, Signet closed an offering of $400 million senior unsecured notes, due 2024 by Signet U.K. Finance PLC, bearing an annual interest rate of 4.7% and matures on June 15, 2024. Signet intends to use the net proceeds to pay a portion of the consideration for its proposed acquisition of Zale. J.P. Morgan Securities LLC, Fifth Third Securities Inc. and PNC Capital Markets LLC acted as joint book-running managers for the offering.

Zale's Profit Rises

Zale Corporation reported that its revenue slipped 2.6% year on year to $431 million for the third quarter that ended on April 30. Nonetheless, Zale narrowed its cost of sales 9.5% to $189.8 million, resulting in improved gross margin of 56% compared with 52.6% one year earlier. Profit surged 74.6% to $8.8 million. Comparable-store sales rose 0.6%. Inventory levels rose 2% to $845.4 million and long term debt fell 2.7% to $454 million.


Movado's Profit Declines

Movado Group reported that revenue increased 10% year on year to $120.9 million in the first quarter that ended on April 30, led by sales growth in the group's licensed brand category. Cost of sales rose 10% to $55.7 million, so gross margin as a percentage of sales slipped to 53.9% compared with 54.5% one year ago. Movado's profit dropped 9% to $7.4 million. Sales were driven by licensed brands, as well as from the company's retail outlet stores, across all geographies.


Jewelers Sued for Patent Infringement

Tiffany & Co., Zale Corporation and 160 other major retailers in the U.S. were sued for patent infringement as plaintiff eDekka LLC claimed that each defendant derived substantial revenue from their online "shopping cart" function. The complaint centers on United States Patent No. 6,266,674, the "674 Patent," which was filed in March 1992 and reissued on July 24, 2001.

The patent, titled "Random Access Information Retrieval Utilizing User-Defined Labels" covers a method and apparatus for storing information, wherein a user inputs and defines the data structure. However, nowhere in the patent description does it specify website function or a shopping cart, signaling a classic hallmark from "patent troll" litigation, which the National Retail Federation (NRF) claims costs the average retailer an 18 month court battle and roughly $2 million to adjudicate.

The NRF said that patent trolls cost the U.S. economy $30 billion a year, which is why the organization expressed deep concern when the U.S. Senate Judiciary Committee shelved its patent reform bill on May 21.

David French, the senior vice president of the NRF, said, “Trolls’ claims not only affect ecommerce applications and the everyday use of technology, but also the storefront operations of traditional brick-and-mortar retailers. Withdrawing the patent reform bill is a victory for patent trolls. Small business owners, retailers, grocers, banks, coffee shops and restaurants need patent relief now, and without Senate action the problem will only grow worse."


Aaron Group Acquires Armadani

The Aaron Group acquired the assets of Armadani Inc. for an undisclosed sum. Armadani is a designing and manufacturing brand for custom jewelry, specializing in bridal designs and proprietary color fashion jewelry. In a joint statement, Kevin Brosh and Art Jacoby, of Armadani, confirmed that by joining the Aaron Group the brand can leverage sourcing and manufacturing strengths, while utilizing the Aaron Group's existing capital base and infrastructure to enhance the business. Brosh and Jacoby will continue in their leadership roles and join the Aaron Group's executive team.


Dominion Revamps CanadaMark

Dominion Diamond Corporation revitalized its CanadaMark™ diamond hallmark program, which tracks each stage of the diamond's journey. Through an independently audited process, the CanadaMark diamond hallmark provides assurance that a polished diamond originated in Canada, was cut from rough that was responsibly mined in the Northwest Territories, and is natural and untreated. Dominion created an action plan that it believes will significantly raise the CanadaMark profile and increase marketing activity to the diamond trade over the next two years with the aim of establishing the brand as a premier diamond hallmark.

Each CanadaMark diamond is laser-inscribed with the CanadaMark logo, a unique serial number and is accompanied by a CanadaMark diamond certificate card. The unique serial number can be verified on the CanadaMark website. An electronic business-to-business trading platform is also under construction to provide a way for diamond jewelry wholesalers and retailers to source CanadaMark polished diamonds.



A. Jaffe and Don Basch Receive Trademarks

The U.S. Patent & Trademark Office (USPTO) issued the trademark "The Opulent Diamond" to A. Jaffe Inc. of New York on May 13 with the registration number 4530637. A. Jaffe filed for the trademark on February 7, 2013. "The Opulent Diamond" refers to diamond jewelry and it was first used in commerce in February 2014.

The USPTO reissued the trademark "Don Basch Jewelers" to Don Basch Jewelers Inc. of Ohio on May 13 with the registration number 4527946. Don Basch Jewelers also received approval for the trademark "Gabe's Designs" with the registration number 4527933. "Gabe's Designs" refers to jewelry and it was first used in commerce in November 2013.


GENERAL

Killion Joins Libbey's Board

Theo Killion, the CEO of Zale Corporation, was elected to the board of directors at Libbey Inc., a manufacturer of glass tableware that recorded almost $819 million in sales in 2013. Libbey's board numbers nine members, eight of whom are independent directors. The company is based in Toledo, Ohio. Killion joined Zale in January 2008 and he also serves on the board of Express Inc.


DBC Elects Board

The Diamond Bourse of Canada (DBC) reelected David Gavin as president and elected officers to the board of directors on May 8 for a new two-year term. Allen Shechtman was reelected as vice president and Jeffrey Brenner was reelected as secretary. Others elected to the board of directors included Greg Jacobson, Samuel Chmielash and Sampat Poddar and past president Bhushan Vora. Gavin has served on the DBC board since its inception in 2009. He later assumed the office of treasurer and served until his appointment to president in 2012 and subsequent reelection this

MINING

Dominion's Rough Sales Near $176M

Dominion Diamond Corporation achieved a total of $175.5 million from the sale of 841,000 carats from its Ekati and Diavik diamond mines, during the first quarter that ended on April 30. The company sold 259,000 carats from its Ekati mine for $92.8 million and 582,000 carats from the Diavik mine for a total of $82.7 million. Additionally, the company sold 100,000 carats, which were not included in total Ekati sales for the period, from the Misery south and southwest kimberlite pipes for $6.9 million or an average $75 per carat .

Lucara Recovers Several Large Stones

Lucara Diamond Corporation has recovered 13 diamonds since April 1 that were larger than 100 carats, while two even exceeded 200 carats in size. Eight rough diamonds were classified as gem-quality, with the largest at 259 carats, two at 153 carats and one at 133 carats. Since the beginning of the second quarter, Lucara's Karowe diamond mine in Botswana has produced 239 diamonds larger than 10.80 carats, including 27 diamonds within the 50-carat and 100-carat range. The company is planning to host an exceptional stone tender on July 18, with client viewing being scheduled both in Antwerp and in Gaborone.

STATS

Belgium

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,028 -11% $4,949 10%
Polished imports $1,224 21% $4,878 15%
Net exports ($195) $71 -72%

Rough imports $1,328 -7% $5,378 10%
Rough exports $1,490 -3% $5,527 9%
Net imports ($162) ($149)

Net diamond account ($33) $220 -53%


Hong Kong

1Q $Mil. %Chng.
Polished imports $4,928 10%
Polished exports $3,511 19%
Net imports $1,416 -7%

Rough imports $534 15%
Rough exports $550 -21%
Net imports ($16)

Net diamond account $1,400 -16%

ECONWATCH

Diamond Industry Stock Report

The big story of the week was how much shares gained for several Indian firms, led by Gitanjali (+58%). U.S. and European shares were mainly higher, Nordstrom and Tiffany & Co. both up 10%, Damiani up 8%. Losers outnumbered gainers for mining shares, with Rockwell (+12%) and Gem Diamond (-5%) defining the spread. View the extended stock report.
May 22 May 15 Chng.
$1 = Euro 0.730 0.729 0.001
$1 = Rupee 58.39 59.43 -1.0
$1 = Israel Shekel 3.48 3.46 0.02
$1 = Rand 10.33 10.41 -0.08
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,294.90 $1,296.40 -$1.50
Platinum $1,486.00 $1,462.00 $24.00

Stock Indexes Chng.
BSE 24,374.40 23,905.60 468.80 2.0%
Dow Jones 16,543.08 16,446.81 96.27 0.6%
FTSE 6,820.56 6,840.89 -20.33 -0.3%
Hang Seng 22,953.75 22,730.86 222.89 1.0%
S&P 500 1,892.49 1,870.85 21.64 1.2%
Yahoo! Jewelry 1,116.48 1,076.44 40.04 3.7%
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Rapaport Weekly Market Comment May 30, 2014

JCK Las Vegas show opens amid rising U.S. consumer confidence. Dealers hoping the show will set the stage for strong U.S. holiday demand. Diamond markets stable but buyers are very price sensitive. Indian manufacturers slowly returning from vacation while liquidity concerns persist. Indian jewelers hoping new government will ease gold import rules to help stimulate demand. Signet buys Zale for $21 per share. Shrenuj & Co. FY revenue +20% to $775M, profit +22% to $15M. Christie’s HK sells $92M (81% by lot) with pair of 25.49ct. and 25.31ct., D, IF, type IIa diamonds for $9.7M ($191,746/ct.). WDC agrees to finance and operate KP administrative support.

RapNet Data: May 29

Diamonds 1,076,671
Value $6,890,857,602
Carats 1,201,547
Average Discount -26.85%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS
May-Jun 29-2 Thu-Mon

Rapaport Jewelry Sale

Las Vegas

View Details.
June 1 Sun
Rapaport Breakfast & Conference at JCK Vegas
Mandalay Bay Resort

8 a.m. to 10 a.m. | South Seas Ballroom
Breakfast and Martin Rapaport's ''State of the Diamond Industry'' presentation.

10:30 a.m. to 12:30 p.m. | Banyan Ballroom
Rapaport Certification Conference with RapNet insights into grading reports.

2 p.m to 4:30 p.m. | Banyan Ballroom
Rapaport Fair Trade Conference

Register; or email conference@diamonds.net or call 1.702.893.9400. These events are free but seating is limited.
June
2-11
Mon-Wed
Rapaport Single Stone Auction
New York & Israel
www.rapaportauctions.com
QUOTE OF THE WEEK
As an independent, global public-benefit organization, the GIA is in a unique position to foster sustainable development in gem producing regions. I look forward to working with GIA’s stakeholders for the benefit of the ultimate consumer and the people and communities who are such an important part of this industry.

Brad Brooks-Rubin | Gemological Institute of America

Careers@Rapaport

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

RETAIL & WHOLESALE

Zale Shareholders Approve Merger

Zale Corporation's shareholders approved merging with Signet Jewelers Ltd. for $21 per share. Insiders say the shareholder meeting in Dallas was sparsely attended. Neither company had issued a statement as of press time. TIG Advisors, a major shareholder in Zale that opposed the buyout, told the Dallas Morning News that they were disappointed with the merger and had "made a good case to investors that Zale" would grow on its own. "The turnaround story was working," portfolio manager Drew Figdor told the newspaper.

Ike Boruchow, an analyst with Sterne Agee, said in a note to clients that the marriage between Zale and Signet was favorable for both parties, as the combined business will have strong 16% to 17% share of the specialty jewelry retail market, with substantial synergies/accretion for the combined business. "Given elimination of the biggest overhang on the stock and the material earnings power of the new company, $10.50-plus of earnings per share (EPS) by 2017, Signet remains our top pick," Boruchow wrote.


Christie's Jewels Sale Achieves $92M

Christie's Hong Kong sale of magnificent jewels achieved $91.9 million and was 81% sold by lot, but fell short of a presale estimate of $100 million. One of the top lots, a rare Golconda diamond necklace named the "Eye of Golconda," remained unsold. A world record for an intense green diamond was achieved for a 6.13-carat, VS2, fancy intense green cushion-shaped diamond ring at $3.6 million or $594,510 per carat.

The top lot of the sale was a pair of 25.49 and 25.31 carat, D, type IIa diamond ear pendants, which sold for $9.7 million or $191,746 per carat to an Asian private buyer. The second top lot was a 9.38-carat, pear-shaped, fancy intense pink diamond ring which achieved $5.96 million or $636,117 per carat. A jadeite bangle achieved $5.2 million, while a 26.20-carat, D, flawless, type IIa, brilliant-cut diamond fetched $4.95 million or $189,828 per carat. A 12.93 carat, VS2, rectangular, fancy orangey-pink diamond by Harry Winston achieved $3.6 million or $281,852 per carat.

Shrenuj's Profit +22%

Shrenuj & Company Ltd. reported that revenue jumped 20.2% year on year to $774.9 million (INR 46.4 billion) in the fiscal year the ended on March 31. The company's profit increased 22.3% to $15 million. By segment, diamond revenue increased 26.5% year on year to $669 million, while studded jewelry sales rose 9.9% to $127 million. Intersegment sales, which are deducted from total revenue, jumped 217% to $26 million.

The board of directors proposed a dividend of 30%, subject to the approval of the shareholders. Based on the company's fiscal year performance, and a positive outlook for this year, the board also proposed a bonus issue of shares on a 1-for-1 ratio, subject to approval.


U.S. Consumer Confidence Rises

The Conference Board Consumer Confidence Index&reg;, rose to 83 points (1985=100) in May, up 6.8 points from one year ago. The Present Situation Index increased 13.7 points to 80.4 and the Expectations Index edged up 2.4 points to 84.8. Lynn Franco, the director of economic indicators at The Conference Board, observed that the labor market appeared to be more favorable in May, providing a boost to U.S. consumer confidence.


Silver Jewelry Fabrication +10%

The Silver Institute's 2014 World Silver Survey concluded that global silver jewelry fabrication rose 10% year on year to 198.8 million ounces, representing a record high. The report cited stronger economic conditions this past year across the industrialized world, which lifted consumer sentiment and in turn boosted retail sales of silver jewelry products.

Silver jewelry fabrication in India in 2013 increased by an estimated 29% year on year, according to the Silver Promotion Service. China's demand registered double-digit rates of growth, setting a new record, while North America’s silver jewelry manufacturers produced 22.8 million ounces, representing an increase of 11%.

PhotoScribe Receives New Patent

PhotoScribe Technologies Inc. was granted a patent for its light performance system (Patent No. US 8,705,018 B2) accounting for six attributes: brilliance, fire, scintillation, contrast, optical symmetry and coverage. The light performance system quantifies the efficiency of a diamond’s interaction with light, which translates to measurable diamond beauty. David Benderly, the CEO of PhotoScribe Technologies, said, "PhotoScribe is a company dedicated to innovations. We are focused on adding value to our customers by solving real industry challenges. The current patent is a nice validation of this effort."


Kingswood Creates Non-Chemical Solution

The Kingswood Company developed a new private-label cleaning formula, The Kingswood Company’s Natural Jewelry Cleaner, which is an all-biological, eco-friendly jewelry cleaning option. This represented only the fourth formula to be introduced, joining Kingswood’s trade-secret Fine Jewelry Cleaner, Gentle Jewelry Cleaner and Silver Jewelry Cleaner jewelry cleaning formulas. The company embarked on a research and development process that resulted in the non-chemical jewelry cleaning formula to meet strong market demand.


NWT Diamond Centre Opens

Crossworks Manufacturing Ltd. held a grand opening of its NWT Diamond Centre in Yellowknife, Northwest Territories (NWT) of Canada. The facility includes a small theater room and a number of exhibits. Visitors to the facility may purchase diamonds that have been mined, cut and polished in the NWT and the space will also carry Forevermark diamonds. The new center provides an opportunity to raise public awareness of the NWT’s socially and environmentally responsible mining practices and world class diamonds produced in the territory.


CIBJO Pushes to Integrate Fairtrade Gold

Fairtrade International and CIBJO signed an agreement to improve certified Fairtrade gold supplies to the jewelry markets and members of CIBJO-associated organizations. CIBJO commits to facilitating and encouraging its members to adopt and integrate Fairtrade gold and precious metals into their national supply chains.

CIBJO and Fairtrade will work together to provide measurable developmental impact for small-scale and artisanal mining communities, and develop educational programs for CIBJO members and the greater jewelry industry. In working with artisanal mining sector, Fairtrade aims to formalize small-scale mining; eradicate mercury usage, thereby enhancing the state of the environment and public health; ensure that participants comply with internationally agreed-to conflict-free protocols; and eliminate both child and forced labor.


Brooks-Rubin Joins GIA

The Gemological Institute of America (GIA) appointed Brad Brooks-Rubin as global director of development and beneficiation. Brooks-Rubin joins GIA’s development team and will work with nongovernmental organizations, trade groups and government agencies to advance GIA’s beneficiation initiatives in gem-producing regions.

Brooks-Rubin previously served as special adviser on conflict diamonds to the U.S. State Department and he has extensive international experience working with industry, government and civil society on issues related to conflict minerals and gems. He joins the GIA from the law firm Holland & Hart LLP, where he counseled international clients on trade sanctions, export controls and international trade law and regulations.


EGL Intl. Defends Grading Quality

EGL International said that Genesis Diamonds in Nashville, Tennessee was the subject of a TV news report, which claimed that the lab's diamond grading reports overstated the quality of the stones. EGL Intl. was not contacted by the news agency to respond but added that different grades for the same diamond from several different labs does not mean the labs made a mistake as it is simply the nature of the business.

The company added that it works to ISO 9001 and IQ Net standards, it operates with the World Federation of Diamond Bourses WFDB Mark and has, over the years, invested hundreds of thousands of dollars in state-of-the art technology that detects any type of treatment, as well as synthetics and chemical vapor disposition (CVD) stones and determines the origin of fancy color diamonds.

Group CEO Guy D. Benhamou said, "We put a great deal of emphasis on grading the color of the diamond face up because that is how a diamond is seen when it is worn, whereas other labs attribute most of the color grade to the face down position."

MINING

Lukoil Preps to Mine Grib

Lukoil expects to mine the Grib diamond pipe in June, resulting in diamond production in August or September, according to Interfax. Lukoil has invested about $1 billion in the project; but since diamonds are a non-core business, the company would entertain an offer from ALROSA, according to the report. The Grib pipe was discovered in 1996 and is estimated to hold 98.5 million carats.


Paragon Narrows Loss

Paragon Diamonds narrowed its fiscal year loss to $2.2 million (GBP 1.3 million) in 2013, compared with $8.6 million one year earlier. The explorer recorded no revenue for the year, but said it is close to securing funds to commence initial production at its open-pit Lemphane kimberlite in Lesotho in late 2014. Initial mining at Lemphane is projected to generate annual revenue of $8 million over a two-year period and will see the company target 20,000 carats with an estimated average value of $750 per carat.


Zim Directs Diamond Sales to RBZ

Zimbabwe told diamond miners to sell production through the Reserve Bank of Zimbabwe (RBZ). The permanent secretary in the Ministry of Mines, Francis Gudyanga, reportedly stated that RBZ will use the diamonds to secure a government loan. Diamonds must be sorted and evaluated with the Minerals Marketing Corporation of Zimbabwe (MMCZ), which is on the list of U.S. sanctions. The government has indicated it seeks to consolidate diamond operations in the Marange area. Currently Anjin Investments, Diamond Mining Company, Gye Nyame, Jinan, Kusena, Marange Resources and Mbada Diamonds operate in the region.

Rockwell Narrows Loss

Rockwell Diamonds reported that revenue rose 39% year on year to $41.6 million (CAD 45.2 million) in the fiscal year that ended on February 28. The average per carat value of rough diamonds sold rose 13% to $1,484, while the volume of carats sold rose 27% to 26,272 carats. Rockwell narrowed its fiscal year loss to $9.6 million compared with a loss of $12.7 million one year ago. Diamond production during 2013 grew 27% to 27,776 carats.


Botswana Diamonds Secures New Licenses

Botswana Diamonds received five new prospecting licenses in the Orapa region of Botswana, covering 1,357 square kilometers and will be explored as part of the ongoing joint venture between the company and ALROSA. The licensed areas were identified as a high priority. Little exploration has been conducted on these areas with no known kimberlites to date. ALROSA believes the ground has kimberlites and technology will be able to pinpoint exact location.



Stornoway Concludes Offerings

Stornoway Diamond Corporation closed its public offering of 188,600,000 subscription receipts at a price of 70 cents each, for proceeds of $132 million. The subscription receipts are trading with the ticker symbol SWY.R on the Toronto Stock Exchange (TSX). Stornoway also closed a private placement of 345,539,916 subscription receipts at 70 cents each for proceeds of $242 million. The closings were an important milestone and a precondition for completing overall project financing agreement for the Renard diamond project. Stornoway will hold a special meeting on June 26 for shareholder approval.


Firestone to Build Main Plant at Liqhobong

Firestone Diamonds will begin building the main treatment plant at its Liqhobong diamond mine in Lesotho, starting construction of the early earth works on the project in the coming weeks. The work will be funded using $225.2 million the company raised through an Absa debt facility, share subscriptions and a mezzanine facility agreement. The company also entered into a new mining lease with the government of Lesotho, which will govern the terms under which it can mine diamonds at Liqhobong.


ECONWATCH

Diamond Industry Stock Report

U.S., Hong Kong and European shares were little changed this past week with Kohl's (+2%) and Zale (-3%) defining the spread. Indian shares were all lower except for Classic Diamond (+21%) after strong increases the previous week. Gains outnumber losses for mining shares with Peregrine (+7%) and Gem Diamonds (-2%) the noteworthy movers. View the extended stock report.
May 28 May 22 Chng.
$1 = Euro 0.736 0.730 0.006
$1 = Rupee 58.93 58.39 0.5
$1 = Israel Shekel 3.48 3.48 0.00
$1 = Rand 10.46 10.33 0.13
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,258.70 $1,294.90 -$36.20
Platinum $1,447.00 $1,486.00 -$39.00

Stock Indexes Chng.
BSE 24,566.09 24,374.40 191.69 0.8%
Dow Jones 16,633.18 16,543.08 90.10 0.5%
FTSE 6,851.22 6,820.56 30.66 0.4%
Hang Seng 23,080.03 22,953.75 126.28 0.6%
S&P 500 1,909.78 1,892.49 17.29 0.9%
Yahoo! Jewelry 1,106.24 1,116.48 -10.24 -0.9%
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RAPAPORT... ALROSA signed an agreement with the Diamond Dealers Club (DDC) of New York to promote the development of the diamond industry in both Russia and the U.S.

The agreement will see the parties exchange information to facilitate cooperation between the U.S. and Russian diamond sectors in such areas as polished diamond certification, new cutting and polishing technologies and initiatives to identify synthetic and treated diamonds. The memorandum's terms also included cooperation on World Diamond Council (WDC) issues.

The agreement was signed at an official ceremony in Las Vegas on May 30 by Reuven Kaufman, the president of the DDC, and Alexander Malinin, the director of ALROSA's cutting and polishing division Brillianty ALROSA.

”Cooperation between diamond market participants and industry organizations is important for the market transparency. Information exchange will help mining companies, diamond cutters and jewelry producers to get a deeper understanding of actual market trends, supply, demand and especially pricing," Malinin said. "Such cooperation can also provide guarantees of the origin of diamonds to jewelry customers and strengthen their confidence in the diamond market."

Additionally, the parties will aim to maintain separate sales of natural and synthetic diamonds and diamond jewelry, as well as fight against the unethical practice of mixing synthetics with natural diamonds.
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Rapaport Weekly Market Comment June 6, 2014

JCK Vegas show meets expectations despite slower traffic from small independent jewelers. Steady U.S. demand for affordable VS-SI commercial goods but trading weak for larger better-quality stones. Couture did well with strong demand for branded fine jewelry up to $8K. RapNet Diamond Index (RAPI) for 1ct. -0.5% in May. U.S. April jewelry and watch sales +2.4% to $5.7B. U.S. April polished imports +19% to $2B, exports flat at $1.6B. Rough market stable with expectations for small De Beers sight next week. Dominion Diamond Corp. plans shift to contract sales in July. Christie’s London sells $14M (73% by lot) with 18.27ct., fancy brown-yellow, VVS1 diamond selling for $635,842 ($34,802/ct.).


RapNet Data: June 5

Diamonds 1,099,453
Value $7,041,445,050
Carats 1,217,971
Average Discount -26.8%

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RAPAPORT ANNOUNCEMENTS

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QUOTE OF THE WEEK
Having now closed the acquisition of Zale, we have entered a new era of growth and transformation for our company and our people. I am truly excited to have the Zale team joining the Signet family and I, and our leadership team, look forward to building upon the strengths of the entire organization.

Mike Barnes | Signet

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The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.

RETAIL & WHOLESALE

Vegas Week Meets Expectations

Diamond suppliers were satisfied with the level of sales at the JCK Vegas show, even though trading activity was slower than previous years. Exhibitors noted that buyers bought goods to fill orders but they avoided larger scale purchases to fill inventory. Similarly, inter-dealer trading was stable but slightly subdued.

Meanwhile, demand for designer and branded fine jewelry was the strongest in years at the Couture show. Retail buyers sought to increase their inventory of mid-level price points, noting that aspirational consumers signal a readiness to spend on designer pieces and new collections. Mid-market and upscale brands observed improving demand for jewelry under the $8,000 price point as U.S. consumers in higher income brackets are loosening their wallet following a prolonged recessionary mindset.

Diamond trading trends from the Vegas shows: • Good demand for 0.30-carat to 0.70-carat, G-J, VS-SI • Strong demand for non-certified pointer sizes in parcels • Demand on the weak side for certified 1-carat to 2.99-carat diamonds • The market has slowed for large, special stones • Commercial-quality, fancy color diamonds remain strong • Steady demand for fancy shapes with pears and ovals being most popular.

U.S. Jewelry & Watch Sales +2%

U.S. jewelry and watch sales improved by low single-digits in April, according to preliminary statistics, while the rate of growth for March was revised two percentage points higher to 4.1%. Sales of jewelry and watches combined increased 2.4% year on year in April as measured across all retail segments. However, the rate of growth one year ago was very robust at 11.1%.

Jewelry sales in April increased 2.3% year on year to $5.056 billion, while watch sales rose 2.7% to $676 million, according to Rapaport News estimates. Sales totals were unchanged from March, indicating stable consumer interest for jewelry and watches at the nation's retailers. By comparison, advanced estimates for all retail sales at U.S. department stores in April revealed an increase of 3.4% year on year to $13.01 billion.

U.S. Chain-Store Sales +5%

U.S. chain-store sales rose 4.8% year on year in May, according to the International Council of Shopping Centers (ICSC). The pace of growth rose above the rolling 12-month average as consumer spending was given a boost from pent-up demand, ICSC concluded. The growth rate for June, on a comparable-store sales basis, is also expected to be healthy; however, same-store sales will have a tough year-on-year comparison given solid retail sales one year ago. ICSC research forecasts that June's same-store sales will increase 3.5%.

Gitanjali's Profit -94%

Gitanjali Gems Ltd. reported that its revenue fell 24% to $2.1 billion (INR 124.36 billion) in the fiscal year the ended on March 31. Profit dropped 94% to $6.1 million. By segment, diamond sales rose 4% to $1.22 billion, while jewelry sales dropped 36% to $1.1 billion. For three quarters of the financial year, the industry experienced numerous challenges due to regulatory changes in India and, especially, restrictions on gold, forcing Gitanjali to place a permanent focus on marketing diamond and studded jewelry.

The company noted that although a change in focus will take around 12 to 18 months to implement and will require a major restructuring of its operations and financing, it is well positioned to undergo transformation with its strong portfolio and manufacturing capabilities.


TBZ's Profit -35%

Tribhovandas Bhimji Zaveri (TBZ) Ltd. reported that revenue rose 10% year on year to $308.1 million (INR 18.24 billion) for the fiscal year that ended on March 31. Expenses rose 12% to $287.3 million, while profit fell 35% to $9.3 million. TBZ said that its operating performance had been stable during the year despite a business environment marked by an economic slowdown, high inflation, weak consumer sentiment and an unfavorable regulatory environment. To deal with the challenging macro-environment, the company explained that it slowed its expansion plans and focused on improving same-store sales.

Tara Jewels' Profit -32%

Tara Jewels Ltd. reported that company revenue rose 3.4% year on year to $286 million (INR 16.954 billion), excluding bullion sales, in the fiscal year that ended on March 31. Expenses grew 4.3% to $263 million. Profit fell 31.6% to $8.5 million. During the fiscal year, the company observed that its international business grew about 9% year on year with strong demand for jewelry coming from the U.S., China and Australia. In India, however, Tara Jewels realigned its expansion plans given the nation's tighter macro-economic environment, opting to create an "asset light" franchise model and shop-in-shop format for new stores.

Christie's London Sale Nears $14M

Christie's important jewels auction in London garnered $13.6 million (GBP 8.1 million) and was 73% sold by lot. The top lot was a rare enamel and diamond snake wristwatch by Bulgari, circa 1965, which fetched $1.1 million, setting a world record price for a Bulgari snake watch at auction. Other prominent lots included an 18.27-carat, VVS1, fancy brown-yellow diamond set in a diamond bracelet, which sold for $635,842 and a pear-shaped, 5.01-carat, D, IF diamond ring that garnered $364,114 or $73,000 per carat.

Dominion to Begin Contract Sales Program

Dominion Diamond Corporation will soon sell its diamonds via long term contracts as manufacturers seek consistent supplies of rough goods. James Pounds, the president of Dominion Diamond marketing, said that contract sales should supply approximately 30 companies and it expects to conduct 10 contract sales per year.

While Pounds explained that some goods will still be sold via tender in order to assure customers and shareholders that they’re selling at fair market price, about 90% of Dominion’s production will be sold to global contract customers. The remaining 10% will be supplied to manufacturers based in Canada’s Northwest Territories, according to the guidelines provided by the local provincial government.

ALROSA, DDC to Facilitate Trade

ALROSA signed an agreement with the Diamond Dealers Club (DDC) of New York to promote the development of the diamond industry in both Russia and the U.S. The agreement will see the parties exchange information to facilitate cooperation between the U.S. and Russian diamond sectors in such areas as polished diamond certification, new cutting and polishing technologies and initiatives to identify synthetic and treated diamonds. The memorandum's terms also included cooperation on World Diamond Council (WDC) issues.

GJEPC Boosts Business With Americas

The Gem & Jewellery Export Promotion Council (GJEPC) is planning a new business development initiative in an effort to foster trusted relationships between India’s key jewelry industry companies and their counterparts in the Americas. The GJECP will host a series of business development conferences in the Americas as well as develop “best practices” directed at meeting today’s rapidly changing business landscape. The third step will be to foster an atmosphere that reinvigorates relationships among other tasks.

GJEPC will hold several face-to-face business development meetings in the first phase of a three-year-long campaign beginning with the “2014 Indo/U.S. Business Development Conference” in Chicago from September 5 to 8.

Signet Begins Zale Integration

Signet Jewelers Limited became the largest specialty retail jeweler in the U.S. and U.K. through the acquisition of Zale in May, representing $6.2 billion in pro-forma revenue and operating more than 3,600 locations along with a number of kiosks. Now the company is working toward $100 million in expense synergies by the close of its fiscal year 2018. The retailer anticipates $50 million in savings from streamlined product sourcing and purchasing, $30 million in savings from repair services sales and brand cross-selling and $20 million of selling general and administrative cost reduction.

Mark Light was promoted to a newly created position of president and chief operating officer of Signet Jewelers, but he will retain the title of CEO of Sterling Jewelers. Theo Killion will retain the CEO title for Zale but he was also named president of the Zale division. George Murray was named Signet's chief integration management officer. Steve Becker was promoted to chief human resource officer of the entire company. Signet is also seeking two new executive posts, a chief marketing and strategy officer as well as a chief information officer.

Tissot Watch for FIFA

Tissot is tapping into football fever ahead of the FIFA World Cup with a new Tissot Quickster Football watch. Tissot has been the official timekeeper for many sports events for more than a decade. This year, the brand offered its customers and fans a chance to serve as an official timekeeper themselves by creating a movement in the Quickster Football that is designed to time football matches, with half time and overtime chronograph functions.

Hermes to LMVH: Sell, Go Away

Hermes voiced an executive opinion during its annual shareholder meeting this week, telling its largest external shareholder, LVMH, to sell. Hermes expressed its need to operate fully independent and without intervention or threat and it takes great exception to ardent rival LVMH holding a 23% share. LVMH was fined in 2013 for improperly disclosing its share in Hermes, but provided no indication of selling its stake. Luxury group Hermes' market capitalization is about $37 billion, or the third largest luxury brand behind LVMH and Richemont.

MINING

DiamondCorp Narrows Loss

DiamondCorp reported a loss of $4.4 million (GBP 2.6 million) for the fiscal year that ended December 31, 2013, which was down from a loss of $5.9 million in 2012. The company attributed the savings to reduced overhead costs and lower general and administrative expenses. The company noted that during 2013, it finalized funding to develop its Lace mine project in South Africa, installed surface facilities at the site and commenced underground mining and performed operating costs at the site under budget, reaching 95% of plan.

Brazil Minerals Increases Stake

Brazil Minerals Inc. paid $500,000 in cash and issued 675,000 shares to acquire an additional 18.75% of Mineraç&atilde;o Duas Barras Ltda. (Duas Barras) in Brazil, increasing its current ownership to 73.75%. Through its stake in Duas Barras, the mining company posted revenue of $791,780 in 2013 and of this amount, 69% was derived from rough diamond sales, while 31% was collected from the sale of gold. In 2014, the company added polished diamonds to its raw mineral offerings.


Observers Note Diamond Looting in Marange

The executive director of the Center for Natural Resource Governance, Farai Muguwu, told SW Radio Africa that miners in Zimbabwe's Marange are operating around the clock out of fear that operations will be shut, following reports that the government will consolidate the sector. Seven mining companies operate in the area, but the government has indicated that no more than two firms will be permitted.

In addition, panic has swept across the diamond-mining industry, allegedly giving rise to diamond looting by mineworkers, security and army chiefs. Zimbabwe's Mines Minister Walter Chidakwa recently announced plans to consolidate mining companies as a way to minimize corruption. Apart from Marange Resources, which is owned by the government and is under U.S. sanctions, other firms include Anjin Investments, Diamond Mining Company and Mbada Diamonds, which is also under U.S. sanctions. Muguwu said it was a mistake for the government to publicly announce consolidation plans, adding that the minister has the power to simply terminate contracts on the spot, which would have avoided the looting spree underway now.


BT to Upgrade De Beers IT Services

The De Beers Group selected BT for a range of IT and networking services with a six year contract and at a cost of $37 million. BT will orchestrate IT services across 70 De Beers locations, including exploration and mining sites, drawing on capabilities of the BT Connect portfolio that provides fiber optic, microwave and satellite linkages, as well as BT Web -- a virtual private network for Internet access and backup. BT will also manage video and audio-conferencing services for De Beers through BT One Voice telephony. BT will also help De Beers customize its network to meeting changing business needs and prioritize critical business applications that are accessed across global operations.



STATS
USA

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $2,032 19% $7,488 10%
Polished exports $1,606 0% $6,579 8%
Net imports $426 322% $909 19%

Rough imports $60 82% $269 94%
Rough exports $46 77% $188 98%
Net imports $15 100% $80 86%

Net diamond account $441 308% $989 22%

ECONWATCH
Diamond Industry Stock Report

U.S. and Hong Kong shares all higher except for Blue Nile (-1%) and JCP (-1%). Europe shares lower except for Damiani (+3%). India shares mainly higher but large differences remain with Classic (+39%) on the up and C. Mahendra (-8%) on the downside. Mining shares mixed with Rockwell (-10%) and Shore Gold (+19%) defining the spread. View the extended stock report.
June 6 (12 p.m. EDT) May 28 Chng.
$1 = Euro 0.730 0.736 -0.006
$1 = Rupee 58.97 58.93 0.0
$1 = Israel Shekel 3.46 3.48 -0.02
$1 = Rand 10.59 10.46 0.13
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,252.10 $1,258.70 -$6.60
Platinum $1,446.00 $1,447.00 -$1.00

Stock Indexes Chng.
BSE 25,396.46 24,566.09 830.37 3.4%
Dow Jones 16,902.99 16,633.18 269.81 1.6%
FTSE 6,858.21 6,851.22 6.99 0.1%
Hang Seng 22,951.00 23,080.03 -129.03 -0.6%
S&P 500 1,947.88 1,909.78 38.10 2.0%
Yahoo! Jewelry 1,108.60 1,106.24 2.36 0.2%
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Belgium Discovers Possible Shipment of Rough Diamonds From CAR

Jun 6, 2014 5:04 PM By AWDC


Press Release: The Antwerp diamond industry, represented by the Antwerp World Diamond Centre (AWDC), is stepping up its efforts to combat conflict diamonds. The city of Antwerp, largely owing its reputation as the most transparent and strictly controlled diamond trade center in the world that rigorously controls diamond imports and exports at the Antwerp Diamond Office, is determined to continue its strong commitment toward the Kimberley Process. According to the AWDC, the increased vigilance and intensified controls have already resulted in the detection of a shipment likely containing conflict diamonds from the Central African Republic (CAR).

In June 2013, the Kimberley Process Certification Scheme banned rough diamonds originating from CAR. Because of the ban, any import of rough diamonds coming from CAR, even accompanied by a Kimberley Process certificate from CAR would not be allowed to enter the Antwerp market and would be confiscated.

Apart from the strict controls that are applied in Antwerp and the 100 percent physical control of each and every shipment that enters or leaves Antwerp, the Diamond Office procedures go even further. Each suspicious shipment is verified, comparing the contents of the parcels with the so-called production footprints of mining operations in conflict areas. Rough diamonds that are imported legally in Antwerp via other diamond trade hubs will be cross-checked on typical characteristics such as color, assortment and size using visual material from a typical rough production of a certain area, such as the CAR. Thus the Diamond Office experts can assess whether or not diamonds are likely originating from a specific conflict area.

By implementing these strict controls, Antwerp, the industry’s leading trade hub in terms of compliance and transparency, aims to give a strong signal and to prohibit conflict diamonds from entering Antwerp. According to a recent report from the Enough Project, today diamonds from CAR are still illegally entering the market in certain countries. These conflict diamonds enter the legal circuit, mostly through forged Kimberley Process certificates that are insufficiently controlled via other diamond hubs.

The recent discovery of a suspicious shipment of rough diamonds and the strong indications these diamonds originated from CAR, led the AWDC to raise the alarm. The AWDC calls upon all diamond centers to implement the same strict controls on import and export procedures and Kimberley Process requirements. It is clear that the Kimberley Process can only be a powerful tool if all participants take responsibility in the fight against conflict diamonds.

In the Antwerp Diamond Office, the FPS Economy discovered a suspicious shipment of rough diamonds that could potentially originate from CAR, where a civil war is raging. Two weeks ago, during the physical inspection of imports and exports by the experts of the FPS Economy, a suspicious shipment of rough diamonds was discovered. Upon request of the Belgian Kimberley Process authority, the FPS Economy and the working group of diamond experts were immediately asked to advise, comparing digital images of the shipment and images of the CAR footprint, concluding there is a high probability that the shipment of rough diamonds originated from CAR. The FPS Economy immediately notified the judicial authorities.

The European Commission appointed the FPS Economy as the official authority charged with controlling the international Kimberley Process Certification Scheme requirements on rough diamonds. One of those requirements states that each shipment of rough diamonds that is exported or imported worldwide needs to be accompanied by a valid Kimberley Process certificate, issued by an officially authorized body in one of the participating countries.

View the press release issued by the Belgian Federal Public Service Economy
http://economie.fgov.be/en/
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Rapaport Weekly Market Comment June 13, 2014

Diamond trading stable with mixed expectations for the June HK show. De Beers estimates 2013 global diamond demand +3% and expects +4.5% in 2014 from growth in China and the U.S. Indian retail sentiment improves on stronger rupee and lower gold prices. Rough markets stable during De Beers sight. Dominion 1Q revenue +61% to $176M, profit -98% to $11M after previous year’s Harry Winston sale. Suashish 4Q sales -25% to $31M, profit +67% to $3M. Christie's NY sells $28M (83% by lot) with oval, 5.50ct., fancy vivid pink, VVS1 diamond for $9.6M ($1.7M/ct.). Waldman Diamond Co. files Chapter 11 to fend off Bank Leumi. India’s April polished exports +8% to $1.6B., rough imports +3% to $2B.


RapNet Data: June 12

Diamonds 1,103,771
Value $7,133,368,018
Carats 1,230,801
Average Discount -26.78%

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RAPAPORT ANNOUNCEMENTS
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Martin Rapaport's "The last 18 inches - interacting with the jewelry trade" presentation.

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QUOTE OF THE WEEK
If the business is able to see unarticulated or latent needs that customers don't yet recognize, it has a responsibility to educate them about the potential value they are not yet seeing. We have to satisfy those customers in terms of what they want in the moment, while steering them toward better choices over time.

John Mackey | Whole Foods
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INDUSTRY

Polished Prices Steady

Diamond prices were stable in May as the trade focused on the U.S. trade show week in Las Vegas. Polished diamond trading at the show was in line with expectations with steady U.S. demand for affordable VS-SI commercial-quality diamonds. Demand for better-quality large stones was relatively weak. Far East demand was quiet despite robust jewelry sales during the May Day holiday.

The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 0.4% in May, while RAPI for 0.30-carat diamonds was flat, and RAPI for 0.50-carat diamonds rose 0.8%. RAPI for 3-carat diamonds increased 0.4% during the month. Sentiment remained positive, India’s polished trade held a cautious tone amid weak domestic demand and tight liquidity; however, Indian market optimism improved after the election of Narendra Modi as Prime Minister.

Rough trading was firm in the secondary market despite tight liquidity and the backlog of goods in the polished pipeline. Manufacturing levels increased slightly as Indian cutters returned from their summer vacations but manufacturers’ profit margins remain tight. Expect steady but slightly subdued trading moving forward as inventory levels are met and retailers anticipate filling orders rather than buying diamonds to stockpile.

Swiss Watch Exports +2%

Swiss watch exports rose 1.7% year on year to $2 billion (CHF 1.834 billion) in April, spurred by steel watch sales and strong demand from Hong Kong, the U.S. and Japan. Wristwatch exports rose 2% to $1.9 billion, while the number of units shipped decreased by 0.3% to 2.1 million. The value of other products declined by 1.3% to $107.3 million. Exports to Hong Kong rose 9.3% to $412.1 million, while exports to the U.S. increased 2% to $204.3 million. Japan recorded the highest increase and rose 34% to $139.5 million. During the first four months of 2014, total Swiss watch exports rose by 3.8% to $7.55 billion as the number of wristwatches sold rose 1.1% to 8.5 million units.

RETAIL & WHOLESALE

U.S. Jewelry Store Sales +2%

U.S. jewelry store sales rose 2.4% year on year to $2.492 billion in April. The rate of growth was exactly that for overall sales of jewelry and watches during the month, which improved 2.4% to $5.732 billion as reported earlier by Rapaport News. Jewelry store sales for the first four months of 2014 have improved 4% year on year to $9.814 billion. Overall jewelry and watch sales have increased 3.5% to $22.781 billion, according to Rapaport News calculations. Meanwhile, advanced estimates for sales at department stores disappointed analysts by declining 1.5% in May to $13.838 billion.

Suashish's Profit +67%

Suashish Diamonds Ltd. reported that its standalone sales declined 25% year on year to $31 million (INR 1.83 billion), during the fourth quarter that ended March 31. Profit jumped 67% to $2.5 million as expenses decreased 14% to $27.5 million.

During the fiscal year, sales decreased 26% to $120.8 million, while profit grew 11% to $11.7 million as expenses declined 26% to $113.1 million.


Tiancheng Jewel Auction Nears $40M

Tiancheng International's spring auction of jewelry and jadeite in Hong Kong totaled $39,607,456 (HKD 308,938,160) and was 70.6% sold by lot. Two individual lots tied for the highest prices achieved during the sale, with an important natural jadeite and diamond ring along with a magnificent natural jadeite and diamond pendant "Laughing Buddha" both selling for $2,798,718. Other top lots included a natural jadeite and diamond demi-parure that sold for $2,723,077, a jadeite and mother-of-pearl and diamond ring that sold for $1,815,385 and a 15.07-carat, Burmese unheated ruby and diamond ring that sold for $1,664,103.


Christie's NY Sale Tops $27.5M

Christie's New York sale of important jewels achieved a total of $27,534,750 and was 83% sold by lot. The top lot of the auction was a 5.50-carat, VVS1 oval-cut fancy vivid pink diamond that sold to the New York trade for $9,573,000 or $1,740,545 per carat against a presale estimate of $6.5 million to $7.5 million. pink diamond Two additional lots achieved prices in excess of $1 million, including a 20.08-carat, D, VVS1 rectangular-cut diamond that sold for $3,077,000 and a 5.91-carat, VS1, rectangular-cut fancy light pink diamond selling for $1,835,000.

Waldman Moves to Fend Off Bank Leumi

The Waldman Diamond Company in New York filed for Chapter 11 bankruptcy protection in what the company called direct response to legal action by Bank Leumi that demanded immediate repayment of a long-standing rolling credit facility. Waldman Diamond sought court protection to preserve normal operations and restructure financial obligations. The firm listed the top 20 of its largest unsecured claims as part of the proceedings, totaling about $630,000.

The company explained that it has realized annual revenue of between $25 million and $30 million during the past several years and is currently profitable. But a series of business issues with Waldman Diamonds Complete LLC (Complete) allegedly exacerbated by Bank Leumi's unwillingness to work with the firm, led to the demise of that division. Complete is now closed but Waldman Diamond is jointly liable for existing credit with Bank Leumi, which "reneged on its promises" to work with the firm and allow it to seek new funding, according to the filing. Waldman Diamond told the court that its goal is to remain profitable, ensure an orderly liquidation of Complete and propose a restructuring that is in the best interest of all creditors.

Leibish & Co. Partners With Kela

Leibish & Co. partnered with Kela.cn to provide fancy color diamonds to consumers across Asia online. Kela is reportedly accounting for 12% of global jewelry sales, which is expected to increase to 18% in the next three years, the partners stated. Leibish Polnauer, the president of Leibish & Co. stated that this partnership would create a bounty of opportunities for the average consumer in Asia to access high-end natural, fancy colors. Polnauer said, “We are mutually confident that this partnership will benefit first and foremost the clients, but also solidify Kela as the principal provider of diamonds and diamond jewelry in Asia, with Leibish & Co. as its top source for color diamonds.”

Alibaba Prepares U.S. Launch

Online retail powerhouse The Alibaba Group unveiled 11 Main (www.11main.com), a new shopping destination for U.S. consumers that is inspired by a traditional "Main Street" experience to sell jewelry, watches, fashion goods, art, toys and other items. Operating as an invitation-only marketplace, 11 Main will host specialty shops and boutiques that feature a wide range of products, including one-of-a-kind items, not available at mass merchants and other large ecommerce sites.

Alibaba is the largest online and mobile commerce company in the world in terms of gross merchandise volume. The company stated that 11 Main’s vision and its commitment to helping small businesses grow will offer U.S. shoppers something not currently in practiced online.

Budget Increases for Engagement Rings

XO Group, owner of TheKnot and the WeddingChannel, surveyed 13,000 brides and grooms who had hired professional vendors for their wedding and noted that average amount budgeted and spent on an engagement ring by these wealthy consumers rose 3% year on year to $5,598 in 2013. The most popular time to present the engagement ring was Christmastime, according to respondents.

Overall, the average amount spent on a wedding in 2013, excluding the honeymoon, rose 5% to a record high of $29,858, but the amount varied widely by U.S. location. The cost of wedding in New York City averaged $86,916, the most expensive in the U.S., while the average was only $16,159 in Idaho. By far, the most expensive budget item for a typical wedding was the venue, which accounted for 45% of the total. The average age of the bride and groom in the survey was 29 and 31, respectively. While June and September were slightly more popular months to hold a wedding, the springtime and summer months are gaining in popularity for tying the knot, according to the survey.


GENERAL

AWDC Commits to Seize CAR Stones

The Antwerp World Diamond Centre (AWDC) reiterated its commitment to seize rough diamond shipments from non-Kimberley Process (KP) compliant areas following the discovery of a suspicious shipment of diamonds that may have originated in the Central African Republic (CAR). The KP banned diamonds from CAR in 2013. The AWDC called upon all diamond centers to implement the same strict controls on import and export procedures, concluding that the KP can only be a powerful tool if all participants take responsibility in the fight against conflict diamonds.

India Forms Monitoring Committee

The Gems & Jewellery Export Promotion Council (GJEPC) and other important trade bodies created the Natural Diamond Monitoring Committee to help safeguard against accidental or intentional mixing of man-made stones with naturals. The group will lead on four key solution areas:

Regulatory measures will enhance traceability of goods and penalize undisclosed mixing, it will also propose changes to the consumer protection act to better protect purchasers.

Commercial solutions will be designed to ensure greater accountability and trust within trade through the standards set by the World Federation of Diamond Bourses (WFDB).

Processes will be implemented to minimize the potential for undisclosed mixing by implementing rigorous testing protocols, tracking and storing transaction data and creating test logs and declaring findings on invoices.

Technology will be made available for identifying diamonds through a centralized testing laboratory within the Bharat Diamond Bourse. In addition, the committee will hold technology symposiums and seminars to rapidly drive scalable and affordable solutions for the industry.

MINING

Dominion's Sales Rise

Dominion Diamond Corporation reported that revenue improved 61% year on year to $175.5 million in the first quarter that ended on April 30. Cost of sales jumped 69% to $137.7 million and gross margin slipped to 21.6% compared with 25.1% one year earlier. During the quarter, the company sold 259,000 carats of rough diamonds from the Ekati diamond mine for $92.8 million, while it sold 582,000 carats from the Diavik mine for $82.7 million.

The company reported profit of $10.7 million during the quarter, compared with $505.8 million one year earlier, which was higher due to the sale of Harry Winston Inc. Demand for rough diamonds during the period maintained strong momentum and rough diamond prices held steady, according to the company. The diamond market has also overcome earlier concerns about liquidity in the Indian diamond manufacturing industry and it has become increasingly evident that tighter credit will lead to more sustainable growth in both market demand and diamond pricing, the company noted.


New Targets for PL-117

Botswana Diamonds and joint-venture partner ALROSA identified two targets for drilling at its PL-117 license area in Botswana's Orapa region. The first target, AN117/2, will be drilled in September, at the same time, the partners will carry out further work to identify the exact drill site for the second target, AN117/1. Botswana Diamonds and ALROSA each own a 50% stake in Sunland Minerals, the company carrying out the exploration work.

New Deal Signed for Namaqualand

Trans Hex's 40% owned subsidiary, Emerald Panther Investments (EPI) 78 Ltd., signed a sale agreement amendment with De Beers Consolidated Mines (DBCM) to acquire the Namaqualand mines. DBCM initially agreed to sell Namaqualand to Trans Hex for $21.2 million in May 2011 but the deal has been delayed subject to the fulfillment of a number of conditions. The amendment provides for the creation of a special purpose vehicle, which will house the state's 20% interest in the project and in EPI.

Once the sale agreement is completed, Trans Hex will own a combined 60% stake in the project with the state. Asset management companies, RECM and Calibre Limited, will own a 27.2%, Dinoka Investment Holdings will own 8.8%, while the Namaqualand Diamond Fund Trust (NDFT), which represents the interests of various communities in Namaqualand region, will hold a 4%.


STATS India

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,634 8% $7,020 -9%
Polished imports $417 4% $2,282 -12%
Net exports $1,217 -15% $4,738 -4%

Rough imports $1,985 3% $6,147 9%
Rough exports $106 -35% $527 33%
Net imports $1,879 12% $5,620 16%

Net diamond account ($662) ($882)

Synthetic gem imports $5 -7%
Synthetic rough exports $7 106%


ECONWATCH

Diamond Industry Stock Report

Clearly a moody market this week as every U.S. industry stock dropped, led by Blue Nile (-6%). And yet, European shares were higher, led by Kering (+3%) and Indian shares continued to ride a wave of optimism as Classic Diamond (+21%), C.Mahendra (+13%), and Ren. Jewellery (+26%) led the way with double-digit increases. Mining shares mixed as Gemfields (+14%) led gainers and Peregrine (-9%) capped declines. View the extended stock report.
June 12 June 6 Chng.
$1 = Euro 0.737 0.730 0.007
$1 = Rupee 59.29 58.97 0.3
$1 = Israel Shekel 3.47 3.46 0.01
$1 = Rand 10.67 10.59 0.08
$1 = Canadian Dollar 1.09 1.09 0.00

Precious Metals
Gold $1,273.70 $1,252.10 $21.60
Platinum $1,438.00 $1,446.00 -$8.00

Stock Indexes Chng.
BSE 25,576.21 25,396.46 179.75 0.7%
Dow Jones 16,739.75 16,902.99 -163.24 -1.0%
FTSE 6,843.11 6,858.21 -15.10 -0.2%
Hang Seng 23,175.02 22,951.00 224.02 1.0%
S&P 500 1,930.37 1,947.88 -17.51 -0.9%
Yahoo! Jewelry 1,109.80 1,108.60 1.20 0.1%
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Rapaport Weekly Market Comment June 20, 2014

Polished diamond markets quiet ahead of U.S. summer vacation. Hong Kong fair begins with reduced expectations for polished trading following relatively weak JCK Las Vegas show. Rough market firm and prices stable after $640M De Beers sight. Cutters fighting for survival with low profit margins and tight liquidity. Petra Diamonds recovers 122.52ct. blue diamond at Cullinan mine. Chow Tai Fook to buy Hearts On Fire for $150M, reports FY revenue +35% to $10B, profit +31% to $970M. India’s May polished exports +8% to $1.6B, rough imports -6% to $1.6B. World Diamond Congress ends, WFDB adds Canada, South Korea bourses to membership.



RapNet Data: June 19

Diamonds 1,104,060
Value $7,048,921,769
Carats 1,223,183
Average Discount -26.7%

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QUOTE OF THE WEEK
Hearts On Fire is a best-selling luxury diamond brand with strong consumer awareness and its product offerings are ideal additions to our existing portfolio. The acquisition is in line with the group’s strategy to optimize product mix and promote higher value products to match the spending profiles of consumers. Given its proven track record not only in the western markets but also in Taiwan, the group is confident that the Hearts On Fire products will be well received in our major markets, including Hong Kong, Macau and Mainland China, where diamond jewelry is increasingly popular.

Kent Wong | Chow Tai Fook


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INDUSTRY

De Beers Sight Estimate at $640M

The De Beers June sight closed with an estimated value of $640 million as demand for rough diamonds remained firm. Prices and assortments were largely unchanged from the previous sight, although sightholders reported minor price adjustments on select boxes. There were ex-plan goods – rough diamonds in excess of sightholders’ initial application for goods – offered as demand rose during sight week.

While rough demand was healthy, sightholders expressed continued concerns over tight manufacturing profit margins due to persistent high rough prices relative to polished diamonds. Rapaport News estimates that rough prices have increased by between 7% and 10% since the beginning of the year. Dealers reported that boxes were trading on the secondary market at about a 5% premium with approximately half the goods sold for cash and half on credit.

WGC Seeks to Reform London Fix

The World Gold Council (WGC) will host a forum on July 7 in London to explore ways to reform and update the London Gold Fix, or the global reference price for the metal. The Financial Conduct Authority will be in attendance as an observer. The WGC stated that it intends to invite representatives of the bullion banks, refiners, exchange-traded-funds, gold investment product sponsors, exchanges, industry bodies, central banks and mining companies.

The objective of the forum will be to ensure that the full range of analysis and market perspectives are debated, understood and brought to bear on any potential changes. Any reform or replacement of the fix, must serve the needs of all market participants and meet today’s requirements for transparency, liquidity and independent oversight, according to the group.


U.S. Jewelry CPI -4%

The U.S. consumer price index (CPI) for jewelry declined 4.3% year on year to 169.36 points in May, which was the lowest reading since December 2010. The CPI in May was just a touch lower than the reading in April. The CPI for watches, meanwhile, was down 0.9% year on year to 120.37 points. Lower prices for some of the jewelry industry's commodities have contributed to a lower CPI in the past few months.

The average price of gold in May was about 10% lower, while platinum was about 2% higher compared with May 2013. The RapNet Diamond Index (RAPI), the global benchmark for polished diamond prices, fell 3.3% year on year for 1-carat diamonds, while RAPI for 3-carat diamonds dropped 2.6% in May. However, RAPI for 0.30-carat diamonds jumped 8.5% and the index increased 5.1% for 0.50-carat stones.

RETAIL & WHOLESALE

Chow Tai Fook Buys Hearts On Fire

Chow Tai Fook agreed to buy diamond brand Hearts On Fire Company in a $150 million cash deal, subject to regulatory approval. Chow Tai Fook will operate Hearts On Fire as a separate division and within six months be selling Hearts On Fire's products through its existing distribution network in tier I and tier II cities in Mainland China, Hong Kong, Macau and other Asian markets.

Hearts On Fire was founded in 1996 by Glenn and Susan Rothman and offers premium bridal and fashion jewelry products at 500 locations in 31 countries. The company reported that sales increased 6% year on year to $104.8 million in 2013. Chow Tai Fook's chairman, Henry Cheng, noted that the acquisition was a strategic move to complement its product portfolio with an exclusive premium diamond jewelry line and to raise its profile in the industry.

Chow Tai Fook's Profit +31%

Chow Tai Fook's revenue jumped 34.8% year on year to $10 billion (HKD 77.4 billion), while cost of goods sold soared 36.7% to $7.3 billion for the fiscal year the ended on March 31. Same-store sales increased 18.6%, with the strongest improvement out of the Hong Kong, Macau and Taiwan business region where comparable-store sales jumped 20.1%, while comparable-store sales rose 17.2% for Mainland China. Ecommerce sales were up by 90.7%. Profit increased 31.2% to $970 million.

By operating segment, retail sales totaled $8.7 billion and wholesale revenue contributed $1.3 billion. The average unit selling price for gem-set jewelry in Mainland China fell 5.8% to $870, while gold unit prices dropped 16.5% to $452. Similar declines were reported for Hong Kong, Macau and Taiwan with the average gem-set jewelry unit sale down 8.4% to $1,814 and gold product units down 16% to $699. Chow Tai Fook's inventory level rose 55.8% to $5.5 billion at the close of its financial year. The company cut and polished 198,000 carats of diamonds during the period, which was up from 189,000 carats in the previous year.


MDL Introduces Arcticmark

MDL Diamond merchants, a loose diamond supplier in Canada, debuted its new brand of diamonds called Arcticmark. The diamonds are mined in Canada’s Northwest Territories, which abide by rigorous environmental laws. “Arcticmark raises the bar in the Canadian diamond industry. Consumers are becoming more conscious about where their diamonds are coming from; we have responded by introducing our most innovative brand of diamonds to date. We are redefining today’s diamond market,” said George Mimar, MDL Diamond's president and CEO.

Tiffany & Co. Opens on the Champs-Elysees

Tiffany & Co. celebrated the opening of its new store at 62 Avenue des Champs-Elysées in Paris on June 10. The new store was designed to reflect the company’s global reputation as a luxury brand and its 177 year history that includes Paris, where Tiffany first opened a store in 1868. The new store, which spans approximately 10,000 square feet, combines the energy of New York with the elegance of Paris and is constructed on three levels. It includes luxurious private salons and a bridal salon with large windows that afford maximum natural light for viewing diamonds.


Video: Botswana Broadens Role in the Industry

WATCH NOW: Botswana’s Minister of Minerals, Energy and Water Resources, Onkokame Kitso Mokaila, expressed the country's goal to diversify and lure jewelers to invest in the diamond-producing country. Mokaila sees the next step in securing long term growth as establishing jewelry company production facilities, which add value to the rough trade. While he was in the U.S. recently, he visited Tiffany & Co. to understand what is required to be involved in the retail side of the business.

Watch Repair Jobs Face Decline

An Oxford study, "The Future of Employment: How Susceptible Are Jobs To Computerisation," found that 47% of U.S. jobs face extinction due to technological advancements in the coming decade and the study listed watch repairer in the top 10 at No. 6. Even though watch repair is a time-honored tradition, consumers are relying more on other devices for checking time.

"It's become increasingly common for people to check their phones for the time," said Eric Miranda, a career counselor with CollegeAdmissionsReview.com. "People will still buy and wear watches - but more so now as jewelry. If someone is interested in working in watch repair, they'd be wise to combine that skill with jewelry making or jewelry repair." The top five jobs that are slipping away include postal service clerks, motion picture projectionists, embalmers, locomotive engineers and printing press operators.

Shoppers Seek Simple, Integrated Ecommerce

U.S. retailers must develop ecommerce platforms that make the purchasing process simple, while seamlessly integrating with physical store and offering free shipping and returns, according to the third annual UPS Pulse of the Online Shopper Survey by comScore Inc. and UPS.

Earlier this year, comScore asked 5,800 consumers about their online shopping experiences and respondents said they wanted more options in searching for items, checking out, enhanced security and alternate delivery locations. The study also revealed that, at least for now, U.S. consumers do prefer to evaluate and purchase products through a desktop or laptop rather than a mobile device. It is also imperative that retailers develop their omnichannel platform to drive customer loyalty, as the savvy shopper is demanding cross-channel convenience.

The study found that 40% of retail purchases were made crossing channels, whether shoppers searched in store and purchasing online or vice versa. As free shipping continues to drive purchasing decisions, comScore noted that 58% of shoppers actually added items to their shopping carts just to qualify for free shipping and 83% of shoppers were willing to wait an additional two days for delivery as long as the fees were waived. Shoppers expect greater ease with returns as 82% said that they would complete an online purchase if they could return the item to a store or ship the item back to the retailer for free.

Trade Groups Lobby for 'Made in the U.S.A.'

The Jewelers Vigilance Committee (JVC), the Manufacturing Jewelers and Suppliers of America (MJSA), Jewelers of America (JA), the American Gem Trade Association (AGTA) and the Richline Group, suggested to the Federal Trade Commission (FTC) that jewelry comprised of metals recycled in the U.S. could be advertised as “Made in the USA.”

The FTC’s standard for “Made in the USA” is that the product must be “all or virtually all” made in the U.S. and marketers must be able to substantiate the claim. For products made of metal this can be very difficult because metal used in jewelry manufacturing was originally mined in foreign countries and it is generally impossible to determine the original source of a metal after it has been refined or smelted. The trade representatives asked the FTC to focus on products made from metal recycled in this country and to allow those products to be advertised as “Made in the USA.” If the request is granted by the FTC, sellers would be able to make the claim – as long as they could substantiate that the metal was recycled at a domestic refinery.


U.S., India Issue Trademarks

The U.S. Patent & Trademark Office (USPTO) issued the trademark "Bouquet by Leo Schachter" to Leo Schachter Diamonds LLC of New York with the registration number 4548084 and the trademark "The Beauty is in the Brilliance" to A. Link Partners Inc. of New York with the registration number 4547926. Additionally, the USPTO renewed the trademark "Le Vian Couture" for the Le Vian Corporation of Great Neck, New York with the registration number 4546853 and assigned the trademark "Intersecting Hearts" to Michael Nashef, the owner of Nashef Designs of Portage, Michigan, with the registration number 4546905.

In India, the Office of The Trade Marks Registry approved the trademark "Emporieo De Jewel" to B B Zaveri Pvt. Ltd. of Mumbai with the registration number 2361367 and it approved the trademark "Mahaveer Jewellery Mart" for the company bearing that name with the registration number 1864508.


GENERAL

BMI Secures Polishing Facility

Brazil Minerals Inc. (BMI) secured a proprietary facility in Brazil for cutting and polishing diamonds that are mined from its subsidiary, Mineraç&atilde;o Duas Barras Ltd. (Duas Barras). The mining company ramped up its polished diamond production this year in an effort to generate higher revenue growth through polished sales.

It is expected that the facility will be staffed by a master diamond cutter and polisher who has more than 20 years of experience, according to Brazil Minerals. The cutter will be supported by an assistant and office support personnel. Brazil Minerals received licenses from the federal government to export either polished or rough diamonds that originated from Duas Barras. So far this year, the company stated it had sold polished diamonds to a multi-store jewelry chain in Brazil.

Antwerp Hosts World Diamond Congress

The World Federation of Diamond Bourses (WFDB) reelected Ernie Blom as president for another two-year term during this week's World Diamond Congress in Antwerp. Members also elected Julien Drybooms as vice president, Rony Unterman as secretary-general with Michel Schonfeld as deputy and Dieter Hahn as treasurer with Harry Levy as deputy.

WFDB's executive members committee includes Rami Baron, Reuven Kaufman, Harry Levy, Nikhil Jhaveri, Anoop Metha, Peter Meeus, Sergey Oulin, Alex Popov, Lin Qiang and Shmuel Schnitzer. During working sessions, WFDB committees finalized an agreement with the Borsa Istanbul to work together in developing the diamond market in Turkey and to launch the World Diamond Mark. The WFDB also formally welcomed the Diamond Bourse of Canada, represented by its president, David Gavin, and the Korea Diamond Bourse, represented by its president, Chang Soo Nam. India's Gem & Jewellery Export Promotion Council (GJEPC), represented by Suresh Shah, was also confirmed as an associate member.

Additionally this week, the WFDB, CIBJO, the International Diamond Manufacturers Association (IDMA) and the World Diamond Council (WDC) established a presidents forum to collaborate, discuss and formulate strategies and policies for the industry on important issues of common interest. The first order of business will be to engage with the precious stones multi-stakeholder working group to discuss the creation of acceptable due diligence guidelines to defend the integrity of the supply chain.
Namibia to Develop Rough Sales Channel

Namibia is considering establishing a company to sell diamonds outside of the De Beers framework that is currently in place. Isak Katali, Namibia’s Minister of Mines and Energy, said the government is negotiating a way in which diamond dealers and manufacturers may buy diamonds direct. Namibia is hoping to develop its diamond industry beyond mining to enable job creation for cutting and polishing and diamond trading. The new state-run trading company would mirror the the Okavango Diamond Company in Botswana, which began selling a portion of Botswana’s production independently of De Beers in 2013


MINING

Gemfields Ruby Auction Nears $34M

Gemfields Plc reported that its inaugural auction of ruby and corundum from its 75% owned Montepuez ruby deposit in Mozambique achieved $33.5 million or an average $18.43 per carat. The auction took place in Singapore on June 12 to 17 and was 92% sold by lot. The company added that following the auction, aggregate consolidated revenue from rough gemstone sales for the financial year ending on June 30 will exceed $143 million.


Petra Recovers Large Blue Diamond

Petra Diamonds Ltd. recovered an exceptional 122.52-carat blue diamond at the company's Cullinan mine in South Africa. The rough stone will require further analysis in order to assess its potential value and upon completion of that process, Petra Diamonds stated that it will evaluate an optimal route to market. Petra Diamonds acquired the Cullinan mine in 2008 and has continued to produce a number of exceptional blue diamonds.

KDL Rough Auction Achieves $5M

Kimberley Diamonds Ltd. raised $5.1 million from a diamond auction of 24,546.69 carats for an average $209.21 per carat, the highest price per carat attained since the company acquired Ellendale in February 2013. Rough diamond demand has remained strong, with the overall price per carat continuing to increase, according to the company. The auction took place through the company's Antwerp office online auction platform, eDiamond.

Mbada Reduces Employee Pay

Mbada Diamonds reportedly lowered worker wages by 50% due to weaker than expected production, according to the New Zimbabwe newspaper. Rival mining company Anjin Resources reportedly laid off many on its staff for the same reason in May. But Mbada, which is a joint venture between South African investment groups and the Zimbabwe Mining Development Corporation (ZMDC), employs about 1,700 and is under U.S. sanctions. Mbada allegedly owes $22.4 million in corporate tax to Zimbabwe and, along with all the miners in the Marange region, faces an uncertain future as the country seeks to consolidate diamond operations in the region.


MPDI Increases Private Placement

Mountain Province Diamonds Inc. (MPDI) increased the size of its previously announced non-brokered private placement from $35 million to approximately $45 million. The first tranche under the private placement closed on June 12 and the second tranche is expected to close on or before June 20. Common shares issued under the private placement have been priced at $5 per share and are subject to a four month hold period.

STATS

India

May $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,636 -8% $8,656 -9%
Polished imports $422 -21% $2,704 -14%
Net exports $1,214 -2% $5,952 -6%

Rough imports $1,550 -6% $7,697 6%
Rough exports $143 6% $670 -27%
Net imports $1,407 -7% $7,027 10%

Net diamond account ($193) ($1,075)

Synthetic stone exports $9 -32%
Synthetic stone imports $9 33%


ECONWATCH

Diamond Industry Stock Report

Gold changed direction on safe-haven buying and more Middle East turmoil, ending the week flat year on year but up 2% for the month. U.S. industry shares improved after two weeks of losses with JCP (+7%) leading the way. European shares higher and Indian shares mostly lower for the first time since the election with 10% declines for Goldiam, Ren. Jewellery and Winsome. Mining shares mostly higher except for Gem Diamonds (-10%). View the extended stock report.
June 19 June 12 Chng.
$1 = Euro 0.735 0.737 -0.002
$1 = Rupee 60.16 59.29 0.9
$1 = Israel Shekel 3.44 3.47 -0.03
$1 = Rand 10.75 10.67 0.08
$1 = Canadian Dollar 1.07 1.09 -0.02

Precious Metals
Gold $1,318.60 $1,273.70 $44.90
Platinum $1,469.00 $1,438.00 $31.00

Stock Indexes Chng.
BSE 25,201.80 25,576.21 -374.41 -1.5%
Dow Jones 16,913.34 16,739.75 173.59 1.0%
FTSE 6,808.11 6,843.11 -35.00 -0.5%
Hang Seng 23,167.73 23,175.02 -7.29 0.0%
S&P 500 1,958.50 1,930.37 28.13 1.5%
Yahoo! Jewelry 1,105.57 1,109.80 -4.23 -0.4%
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ALROSA and GJEPC agreed to expand exchange of information


Last Thursday, Russian diamond miner ALROSA and the Gem & Jewellery Export Promotion Council of India (GJEPC) signed a Memorandum of Understanding, which aims at expanding cooperation between the diamond industries of the two countries. The document was signed by Fyodor Andreev, President of ALROSA and Vipul Shah, Chairman of GJEPC after they exchanged speeches and the Russian and Indian delegations discussed areas of possible cooperation.

Under this Memorandum, ALROSA and GJEPC agreed to exchange information concerning the development of cooperation between the diamond industries in Russia and India, including overviews of the diamond market and diamond market forecasts, diamond import and export statistics, as well as market research reports. Both parties will also cooperate on the Kimberley Process issues and jointly work to ensure separate sales of natural and synthetic diamonds.

During a press conference after the signing ceremony, Vipul Shah, having stressed the importance of the Memorandum of Understanding, said that it would be a huge opportunity for the GJEPC members to establish closer relations with ALROSA. They will be able to get a lot of information that will help them to understand the Russian market. On the other hand, ALROSA will also be able to understand the Indian market better. According to Vipul Shah, having signed this document, GJEPC will share statistics related to the Indian retail market and diamond manufacturing industry in return for information on the Russian retail market. “We will be exchanging information, which we will be sharing with our members, so they can start thinking how to increase trade relations and business between the two countries,” he said.

Mr. Siddharth, Joint Secretary of the Ministry of Commerce and Industry of India, commenting on the signing of MoU said the document institutionalized the exchange of information between GJEPC and ALROSA, which previously was sporadic. "Basically, the idea is that both our countries complement each other. You have the biggest producer of rough diamonds on the one hand, and we have the biggest cutting and polishing industry on the other hand. So, this Memorandum brings in more understanding of each other’s points of view," he said, expressing the hope that this will lead to more business opportunities in the future.

Talking about the problem of market regulation with regard to natural and synthetic diamonds, the members of the Indian delegation confirmed that this was one of the main challenges facing the GJEPC, and said they had ordered a report on this issue from A.T. Kearney, a marketing consultancy, which would be released soon. It was stressed that the GJEPC calls on companies dealing with natural diamonds and companies dealing with synthetic diamonds to do their business transparently disclosing information about their goods to consumers.

The importance of this problem was also highlighted by Vladlen Nogovitsyn, Head of Marketing Department, ALROSA, who pointed to the need for timely action on the issue of synthetics.

Speaking about long-term contracts under which Indian companies are working with ALROSA, Vipul Shah said that it was very much desired for the Indian diamond industry to have long-term contracts, because once you have a long-term contract you can plan your business in a very proper manner, you can assure your retailers about supplies and about demand. “So it is a very good business model. At the Council, we prefer more of long-term contracts coming to India for the members so that they can ever have a consistent supply," said the head of GJEPC.

The Indian delegation also noted that the diamond manufacturing industry in India employs a huge workforce and consistent supply is absolutely necessary, otherwise if it is not there, then the problem is higher speculation, which cannot be permitted at this rough time. And it is good for rough diamond producers as well to have such a commitment even before mining, when such a contract is there.

Describing the situation with the current supply of rough diamonds to India Vipul Shah said it was much better compared to last year and supply was consistent across all the sources. “So, we see a good year ahead of us with demand always exceeding supply. It will be more challenging after 4-5 years because no new mines are coming. That would be challenging in terms of how we are going to tackle it. And this is to be discussed among the producing countries and manufacturers in a forum to understand the future prospects of the market,” he said.

Vladimir Malakhov, Rough&Polished, Moscow
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Rapaport Weekly Market Comment June 27, 2014


Diamond markets seasonally slow as U.S. vacation period approaches. Hong Kong show fails to meet expectations with some price softening. Far East market slow with selective Chinese buying. U.S. demand for inexpensive piqué diamonds very strong with prices firming. ALROSA 1Q revenue +43% to $1.7B, profit -3% to $180M, rough prices +3%. Russia’s 1Q rough exports +21% to $1.4B, volume +22% to 12M cts. Angola reportedly okays Leviev rough sales on open market. Luk Fook 2014 revenue +43% to $2.5B, profit +50% to $241M. U.S. May jewelry sales +5% to $6B, watch sales +7% to $871M. Union Bank of India opens Antwerp branch. Gemesis appoints Lisa Bissell as CEO.


RapNet Data: June 26

Diamonds 1,121,500
Value $7,197,500,645
Carats 1,238,735
Average Discount -26.69%

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QUOTE OF THE WEEK
We’re very keen to see the sightholder brand become more robust. Through our best practice principles and financial governance we’re looking for more transparency and to make sure that sightholders are in a financially strong position to take the industry forward with us.

Paul Rowley | De Beers Group

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INDUSTRY

ALROSA's Profit -3%

ALROSA's revenue rose 43% year on year to $1.66 billion (RUB 56.3 billion) in the first quarter of 2014. Growth was driven by an increase in sales volume, coupled with a weakening of the Russian ruble against the U.S. dollar. ALROSA's profit declined 3% to $179.5 million due to higher costs. The group's cost of sales rose 40% to $820.6 million.

The average increase for rough diamond prices was 3% during the period, but the average price of its gem-quality diamonds that sold fell 2% year on year to $155 per carat due to changes in product mix. The company reported that diamond sales rose 42% to $1.51 billion and the volume of diamond sales increased 23% to 12.7 million carats. ALROSA also receives revenue from other product subsidiaries, including energy and gas. During the quarter, group diamond ‎production rose 5% to 7.9 million carats.

Meanwhile, Russia's rough diamond exports jumped 21.5% to 12.01 million carats in the first quarter, while the value rose 20.6% to $1.41 billion.


De Beers Alters Sightholder Requirements

De Beers will unveil requirements for sightholder applications for the next three-year contract period in July. De Beers seeks greater transparency and financial governance among its sightholders. The new contract period begins in April 2015 and will run through March 2018. De Beers is currently finalizing its requirements before presenting them to sightholders at the next sight, which is scheduled to take place from July 14 to 18.

De Beers has scrapped the contract proposal questionnaire (CPQ) and will require sightholders to adhere to international financial reporting standards (IFRS). De Beers currently has 84 sightholders receiving goods primarily through its global sightholder sales unit, but also through the company’s Botswana, Namibia, South Africa and Canada sights. In addition, the company sells 10% of its production via its auctions sales.

Trading at HK Show Disappoints

Trading at the June Hong Kong Jewellery & Gem Fair, which took place between June 19 and 22, came in below expectations as the event failed to boost sales during the traditionally slow period of the year. Exhibitors noted that buyers were looking for specific items to fill immediate orders but they avoided inventory purchases.

Suppliers reported that they faced price resistance from buyers, who were generally looking for bargains and displayed no real urgency to buy. Sellers were unwilling to lower prices as their profit margins from polished diamond sales have been squeezed by higher rough prices. Exhibitors that focused on selling fine diamond jewelry reported similarly slow activity, claiming visitor traffic was lower than one year ago. Nonetheless, there as good demand for diamonds above 3 carats and firm demand for fancy color diamonds and fancy shapes with ovals being particularly strong.


RETAIL & WHOLESALE

U.S. Jewelry, Watch Sales +6%

U.S. combined jewelry and watch sales in May rose 5.6% year on year to $7.192 billion, according to preliminary government estimates. Sales data for April was unchanged, however, the figures were revised slightly lower for March.

Preliminary jewelry and watch sales for the first five months of the year rose 3.4% to $29.95 billion. Jewelry sales across all retail establishments in May increased 5.4% year on year to $6.321 billion, according to Rapaport News estimates. The U.S. consumer price index (CPI) for jewelry in May declined 4.3% as price pressures eased for supplies. Watch sales increased 6.8% in May to $871 million as the CPI fell 0.9%. Jewelry sales in the U.S. for the first five months of 2014 have risen 3.1% to $26.394 billion, while watch sales increased 3.9% to $3.556 billion.


Luk Fook's Profit +50%

Luk Fook Holdings reported that revenue rose 43% year on year ‎to $2.478 billion (HKD 19.214 billion) in the fiscal year that ended on March 31. Group profit ‎grew 49.8% to $240.8 million. ‎ Growth was given a boost from tourist purchases in Hong Kong and a surge in gold product sales. Luk Fook’s retail business continued to be the main sales driver for the group as sales jumped 48% to $2.085 billion, while wholesale revenue rose 20% to $313.7 million.

By product category, gold and platinum products remained the favorite items among customers as sales rose 53.6% and sales of gem-set jewelry products increased 26%. Same-store sales growth for gold and platinum during the year was 36%, while comparable-store sales growth for gem-set jewelry was 4.8. During the year, the group opened 186 new doors, of which 181 were licensee shops. At the close of its fiscal year, Luk Fook had a total of 1,268 stores globally across Mainland China, Hong Kong, Macau, Singapore, the U.S., Canada and Australia.

Sellers Own the Authenticity of Diamonds

WATCH NOW: The annual Rapaport Certification Conference highlighted how jewelers are responsible for the authenticity of the diamonds they’re selling. Everyone in the pipeline has a responsibility to the purchaser and no one can pass responsibility on to a grading report. The Jewelers Vigilance Committee said the U.S. law considers a "diamond" to be natural, so additional language is required to describe other features, especially man-made.


India is the Industry's Future

WATCH NOW: Vipul Shah, the chairman of India's Gem & Jewellery Export Promotion Council (GJEPC), discusses how business conditions and policies in India are changing. Additionally, he urges U.S. retailers to build direct partnerships with Indian firms to reduce reliance on the middle man and reduce operating costs.

Dhamani 1969 Opens at Dubai Mall

Dhamani opened its signature boutique, Dhamani 1969, at The Dubai Mall. The jeweler stated that it has a deep understanding of the intrinsic value and cultural importance of jewelry in today's world. Dhamani 1969 sells rare gems and diamond encrusted jewelry and the opening of this location marks its first step toward positioning a home-grown brand on the global marketplace. Plans are in place to expand across Oman, Qatar, Singapore and the U.K.


Prepare Now for Profitable 4Q

Prepare now for making the online Christmas-shopping season profitable, according to a joint ecommerce presentation this week by Forrester Research Inc. and IBM. Retailers must find ways to capture a diminishing attention span of the U.S. consumer, reduce cart abandonment rates (which are about 70%) and increase session time with compelling page content. These issues are closely tied to marketing, merchandising and the retailer's omnichannel strategy.

The consultants found that online shopping behavior is largely centered on self-purchases as the holiday season ramps up in November. Roughly half of consumers made a self-gift purchase from just before Thanksgiving and well into Cyber Week, or the days following CyberMonday. Gift spending for others began in earnest over Thanksgiving weekend and stretched into the middle of December. Retailers should design their marketing strategy to capture the self-purchasing shopper, especially through a personalization strategy.

IBM noted that 80% of consumers prefer shopping online simply to avoid chaos and crowded stores over the Thanksgiving weekend and retailers should pounce on this opportunity to attract electronic sales. Email outreach is an extremely important driver for consumers to discover special deals and product announcements, as 40% said they made a purchase due to an email from their favorite retailers. On the other hand, a retailer's social media presence only resulted in 4% of consumers making a purchase.

Forrester concluded that shipping clubs, such as Amazon Prime and Shoprunner, are experiencing tremendous growth, with 21% of consumers saying they will shop more with retailers who belong to those clubs. Great attention is also directed toward mobile shopping. IBM anticipates that during Christmastime 2014, mobile devices will account for 43% of all retail traffic and 20% of all ecommerce sales. Forrester found that smartphone usage is cannibalizing tablets and PCs as consumers spend more time with their phones. This means that retailers must imagine, design and test all apps, websites and email outreach across the various mobile devices. Poor user experience will result in lost sales.

Shopping begins on search engines, according to Forrester, so the most important touch point for retailers this year is to think about how they market and show content that is communicated at the right place and right time. Understand the consumer mindset and compel them, optimize the experience for public access and on an individual, personalize basis, engage in dialog and coordinate the same retail experience across all channels.

GENERAL

Bissell Joins Gemesis

Gemesis Inc. appointed Lisa Bissell as the company's new president and CEO. The company defined Bissell as a highly-regarded name in the industry with 26 years of experience. Bissell was with M. Fabrikant & Sons for 19 years, where she developed proprietary brands and worked with jewelry designers to create new products. Bissell said the industry must work to empower harmonious co-existence, with an aim to benefit the consumer, along with the people and communities who are such an important part of this industry.


IMF Notes Zimbabwe's Progress

The International Monetary Fund (IMF) stated that Zimbabwe remains committed to implementing the policies and reforms that were agreed to with an IMF-monitored program and to stay engaged with international financial institutions. The program marked its first anniversary this month and while the IMF suggested a number of guidelines to stabilize Zimbabwe's economy, the organization also concluded that the government must fully implement controls to boost transparency in the diamond sector and to modernize mining legislation.

One measure the country implemented following general elections in July 2013, was to drive sustainable development and social equity through a new five-year development plan, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIM ASSET). Nonetheless, the IMF found that progress on its monitored program has been mixed, reflecting a long electoral process coupled with a protracted post-election transition. But the monitor's progress report indicated that Zimbabwe is interested in a successor monitor to build on achievements this past year and to support a stronger policy framework moving forward.


Union Bank Opens in Antwerp

Union Bank of India opened a branch in Antwerp, marking the fifth Indian lender operating in Belgium. The bank has been supporting diamond firms with credit and loans for many decades. Arun Tiwari, the chairman of the bank told Bloomberg News that the new Antwerp office will offer one fifth of its $200 million loan book to the diamond sector during its first year of operation. The bank will also lend to companies in other industries and provide trade finance, remittances and syndicated loans. Currently, State Bank of India (SBIN), ABN Amro, Antwerp Diamond Bank and Standard Chartered are among the top lenders to the diamond industry.

GJEPC Seeks Special Trading Zones

The Gem & Jewellery Export Promotion Council (GJEPC) lobbied the newly elected government for Special Notified Zones (SNZ), where global diamond-mining companies could set up rough trading offices. These zones would allow local traders to buy direct without having to travel abroad for auctions. GJEPC in partnership with Bharat Diamond Bourse (BDB) proposed a rough diamond viewing facility in Mumbai. GJEPC also called for a new gold policy to improve imports and supplies, especially for smaller jewelers.

MINING

Rockwell's Revenue +15%

Rockwell Diamonds reported that rough sales rose 15% year on year to $8.76 million for the first quarter that ended on May 31. The company sold 6,677 carats, an increase of 34% from one year ago, while the average price was $1,312 per carat, down 14% from 2013. Production jumped 90% to 9,162 carats, with 4,800 carats derived from the company's royalty mining contractors. The company began its second quarter with 2,966 carats of high-quality rough diamonds in inventory. Rockwell recorded improved performance at its Niewejaarskraal operations, where rough prices achieved $2,408 per carat.

Leviev Group, Angola Reach a Deal

The Leviev Group reportedly reached a deal with Angola that allows the diamond company to sell rough diamonds from the Luminas mine directly on the open market rather than to specific traders in China and Dubai, according to insiders who were quoted by Bloomberg News. The report noted that the Leviev Group would benefit from selling rough diamonds at free market prices, whereas the current arrangement results in selling at a discount. Insiders suggested that the deal would result in rough prices that are 50% higher for the Leviev Group.

Firestone Begins Excavation

Firestone Diamonds began excavating at its Liqhobong diamond mine in Lesotho in preparation for the development and commissioning of the main treatment plant. The company expects construction to span two years, with production anticipated to come online in the first half of 2016. To date, the decommissioning and removal of the existing pilot plant is 30% complete. Firestone also needs to widen and reroute the site access road, build residue slimes retaining walls and other engineering support.

Lucara Prepares Large Stone Tender

Lucara Diamond Corporation will offer 16 lots at its second exceptional stone tender that is planned for July 16. The tender includes large diamonds that were recovered from the company's Karowe mine in Botswana this year. Of the lots on offer, the largest diamond is a 258.69-carat stone (lot 501), with the smallest lot weighing 34.88 carats (lot 516), according to the tender brochure. Additionally, five lots are larger than 109 carats. Diamond viewing will take place in Antwerp from July 3 to 10 and in Gaborone from July 14 to 16.

Brazil Minerals Adds Licenses

Brazil Minerals Inc. added two mineral rights for diamonds and gold to its portfolio, adding 2,371 acres for total exploration program coverage of 3,775 acres. There was no stock issuance related to these transactions, according to the company. The rights are located in the Jequitinhonha River valley, near the mining concession and plant for Brazil Minerals' subsidiary, Mineraç&atilde;o Duas Barras Ltda. (Duas Barras). The company stated that it intends to continue selectively obtaining mineral rights for diamonds and gold near Duas Barras, where production is ongoing.


ECONWATCH

Diamond Industry Stock Report

U.S. stocks all lower except for Movado (+4%), Hong Kong shares higher led by Luk Fook (+10%). European shares fell except for Swatch (+1%) and Indian shares mixed with Rajesh Exports (+25%) and Winsome (-14%) defining a wide trading range. Mining shares mixed but Rockwell (+22%) pulled way ahead. View the extended stock report.
June 26 June 19 Chng.
$1 = Euro 0.734 0.735 -0.001
$1 = Rupee 60.18 60.16 0.0
$1 = Israel Shekel 3.42 3.44 -0.02
$1 = Rand 10.64 10.75 -0.11
$1 = Canadian Dollar 1.07 1.07 0.00

Precious Metals
Gold $1,316.50 $1,318.60 -$2.10
Platinum $1,463.00 $1,469.00 -$6.00

Stock Indexes Chng.
BSE 25,062.67 25,201.80 -139.13 -0.6%
Dow Jones 16,846.13 16,913.34 -67.21 -0.4%
FTSE 6,735.12 6,808.11 -72.99 -1.1%
Hang Seng 23,197.83 23,167.73 30.10 0.1%
S&P 500 1,957.22 1,958.50 -1.28 -0.1%
Yahoo! Jewelry 1,004.09 1,105.57 -101.48 -9.2%
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Rapaport Weekly Market Comment July 4, 2014


Rounds: Diamond markets seasonally slow with limited demand for top quality carat and larger stones. Polished prices soften with RAPI for 1ct -0.5% in June, -1.4% in 2Q as weak trading pressures prices. The GIA backlog has reduced supply which is preventing lower prices. Belgium’s May polished exports -1% to $1.3B, rough imports +12% to $1.2B. ALROSA launches Udachny underground mine with eventual 5M ct. annual capacity. Zale CEO Theo Killion and other top executives resign in Signet management shakeup. Responsible Jewellery Council appoints Ashish Deo as CEO. AWDC reelects Stéphane Fischler as president.


RapNet Data: July 4

Diamonds $1,145,853
Value $7,301,709,093
Carats 1,277,257
Average Discount -26.75%

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July 1-9 Tue-Wed
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July 8-16.Tue-Wed

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QUOTE OF THE WEEK
I sincerely congratulate Mr. Fischler on his reelection as AWDC president. Over the past two years Stéphane Fischler has proven to be a skillful leader of our board of directors. He is highly respected and well known for his dedication toward the Antwerp diamond community and beyond. As CEO of our organization, I look forward to continuing the excellent cooperation with both Mr. Fischler and our board of directors.

Ari Epstein | AWDC

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INDUSTRY
Polished Prices Soften in June

Diamond markets were seasonally quiet in June and polished prices softened slightly. The JCK Las Vegas show signaled steady U.S. demand for commercial-quality diamonds, strong demand for inexpensive piqué diamonds and relatively weak demand for fine-quality and larger size stones. The June Hong Kong show disappointed diamond dealers and reflected a cautious Far East market.

The RapNet Diamond Index (RAPI™) for 1-carat certified polished diamonds fell 0.5 percent during June. RAPI for 0.30-carat diamonds rose 0.5 percent and RAPI for 0.5-carat diamonds increased 0.3 percent. RAPI for 3-carat diamonds declined 0.7 percent during the month.

Polished prices softened throughout the second quarter of 2014, as noted in the Rapaport Monthly Report – “2Q Slowdown.” Profit margins remain tight for diamond manufacturers. Rough prices were stable in June and trading on the secondary market was steady. Despite liquidity concerns, rough demand is firm as manufacturers maintain steady operating levels at their factories.

WDC Issues Warning on Roughs from CAR

The World Diamond Council has issued a warning that, despite the Administrative Decision of the Kimberley Process of May 23, 2013, which ordered the temporary suspension of trading in diamonds from the Central African Republic (CAR), production of diamonds in that country is continuing and there is evidence of diamonds from the CAR reaching the markets.

The WDC seeks to reiterate that, until such date that the temporary suspension is lifted, trade in rough diamonds from the CAR is considered illicit, and members of the industry who are found to be involved in such activities will be subject to sanctions agreed to by the World Diamond Council and the diamond exchanges affiliated to the World Federation of Diamond Bourses.

The WDC urges any member of the diamond industry of who is aware of such activity taking place to report it immediately to the Kimberley Process Authorities in the country in which he or she is operating.

AGS Launches GoTo Guilds

The American Gem Society (AGS) recently launched a virtual Guild, open not just to AGS members, but to any members of the trade interested in coming together—virtually. Peter Yantzer, executive director of AGS Laboratories, will kick-off the first GoTo Guilds meeting with his presentation, “Light Performance 101,” an in-depth primer on the American Gem Society’s ground breaking Light Performance Cut Grade.

The first GoTo Guilds meeting will be held on July 8 at 9:00 am PST.

Strong Rough Trading Continues in Antwerp

The month of May continued the positive streak of this year in rough trading, that is, an improved performance as compared to 2013. There was a slight decline in imports of polished goods this month, largely due to the decrease of stones coming in from the USA, Israel and Switzerland.

The rough trade continues to do well in May and therefore is in line with the first four months of the year. As compared to May 2013, this year’s figures show increases in volume and value for both import and export of rough diamonds. In terms of the former, there was an 11% rise in volume to 7,38 million carats and a 12% increase in value to 1,18 billion USD. Exports increased by 8,72% to 8,94 million carats and amounted to 1,29 billion USD.

Finances Discussed at Indian Summit

The Diamond, Gem and Jewellery Banking Summit 2014 was hosted by the Gems and Jewellery Export Promotion Council (GJEPC) recently in Mumbai. Present at the summit were members from the ministry of finance, leading banks, the council itself, members from the industry and a strong presence of the media.

Citing the aim of the summit, Vipul Shah, chairman – GJEPC shared that through the summit the council wanted to bring together all the parties concerned to discuss aspects and current issues on financing being faced by the sector (gems and jewelry).

Gold Grief for India

A recent report released by PricewaterhouseCoopers (PWC) conveys a startling revelation: that the Indian Government is losing billions due to its current regime on gold doré imports. As the report highlights, under the current tax regime, the Indian government is losing approximately $94 million (INR 5.6 billion) in duty revenue for every 100 tons of doré gold refined in the country.


RETAIL & WHOLESALE
NJ Investigates Cash for Gold

The state of New Jersey's Division of Consumer Affairs and its Office of Weights & Measures recorded 936 violations in “cash for gold” schemes, following a recent investigation of 21 jewelers across the state.

“New Jersey’s cash-for-gold laws serve two important functions. On one hand, they require jewelers to be transparent about their pricing and the evaluation of precious metals when buying from consumers. On the other hand, they help fight the sale of stolen jewelry, by requiring the buyers to maintain a fully detailed record that can be provided to police,” said the state's acting attorney general, John J. Hoffman.

The state also issued a special notice to consumers, calling upon them to "know with whom you are doing business" and they offered public brochures on "Selling Your Precious Metals and Jewelry," "Consumer Brief: Precious Metals and Jewelry" and "Precious Metals: A Guide for Law Enforcement."

'The Last 18 Inches' Vital to Retailers

WATCH NOW: Martin Rapaport's annual "State of the Diamond Industry" presentation provides strategic insights that jewelers need to understand the outlook for demand and supply, as well as a forecast of diamond prices going into the Christmas season. Rapaport focuses on “The Last 18 Inches,” highlighting the vital importance of retail jewelers who move diamonds across the 18-inch jewelry counter to the consumer. He highlights strategic challenges and opportunities facing jewelers, while providing practical suggestions of what jewelers can and should do to improve their business.

Gemesis Renames to Pure Grown Diamonds

Gemesis Inc. rebranded the company as Pure Grown Diamonds Inc. effective June 27. Pure Grown Diamonds will continue to provide man-made diamonds to the retail and wholesale trade. The newly appointed CEO, Lisa Bissell, is leading the new campaign. 

Bissell said, “Each of us in the diamond industry is proud of our values, especially of honesty and disclosure. Lab-grown diamonds are truly innovative and represent an incredible category. The new name reinforces our commitment to disclosure and transparency.” Pure Grown Diamonds operates as a privately held company based in New York and manufactures type IIa, gem-quality laboratory grown diamonds and manufactures jewelry.


Raja Owner Arrested

U.S. attorney Paul J. Fishman announced that Vijay Verma, 46, an Iselin resident, who used his Jersey City jewelry store in one of the major credit card fraud schemes that the Department of Justice has ever charged, has been found guilty to the role he played in the scheme.

Verma was the eighteenth person to plead guilty in the $200 million scheme and owns Raja Jewelers on Newark Avenue. He and was summoned by the U.S. District Judge Anne E. Thompson in Trenton federal court.

RJC Publishes Impacts Report

The Responsible Jewellery Council (RJC) today publishes its first Impacts Report, ‘Building Responsible Jewellery Supply Chains’, which reviews the first four years of RJC Certification programs during 2010-2013.

As the first report on RJC’s Certification programs, this report sets out a baseline for future evaluations. Drawing on audit data, collaboration reports and independent studies, the RJC Impacts Report provides a snapshot of RJC’s mine to retail activities in the jewelry supply chain. It examines progress to date and also reviews the challenges still ahead.

Signet Announces Management Changes

Signet Jewelers Limited, the largest specialty jewelry retailer in the US, UK and Canada, announced Tuesday that Ronald Ristau resigned from his position as Chief Financial Officer (CFO), effective July 31, 2014, and Michele Santana, currently Signet's Senior Vice President and Controller, has been promoted to CFO Designate, effective immediately. Ms. Santana will succeed Mr. Ristau as CFO of Signet following his departure.

Signet also announced today that Theo Killion, the President and CEO of the Zale division, has resigned from his position, effective July 31, 2014. George Murray, Signet's current Chief Integration Management Officer, has been promoted to President of the Zale Division and will succeed Mr. Killion upon his departure.

Swiss Watch Exports Up

Swiss watch exports rose 1.2 percent year on year to $2.1 billion (CHF 1.87 billion) in May, according to the Federation of the Swiss ‎Watch Industry.‎ Growth was spurred by precious metals watch sales.

GENERAL

AWDC reelects Fischler

Board members of the Antwerp World Diamond Centre (AWDC) reelected Stéphane Fischler as its president and appointed Kaushik Mehta as the vice president to represent the trade and Freddy Inzlicht as the vice president to represent the bourses. 

The remaining six board of directors, Kaushik Mehta, Santosh Kedia, Shailesh Javeri, Samir Mehta and Jacques Weisz, elected as trade representatives through direct elections in 2012, remain in their positions for two more years. Fischler was born in Antwerp in 1958 and he is a third-generation diamantaire who started working at Fischler Diamonds in 1979, where he is now a partner. Fischler is currently the treasurer for the International Diamond Manufacturers Association (IDMA), vice president of SBD, and a board member of the WTOCD (a scientific diamond research center), the World Diamond Council, the Diamond & Jewellery Management Institute Antwerp and the Diamond Development Initiative.

CIBJO Congress Set for Brazil

CIBJO, the World Jewellery Confederation, will hold its 2015 annual congress in Salvador, Brazil, May 4 to 6, 2015, with pre-congress meetings on May 2 and May 3. Salvador is the capital of the north-eastern Brazilian state of Bahia.

Rapaport Outlines Core Set of Industry Values

WATCH NOW: The annual Rapaport Fair Trade Conference that took place in Las Vegas in June sought to develop a broad set of values that would promote greater corporate social responsibility (CSR) across the jewelry supply chain. The conference succeeded to reach a consensus of support for 10 to 12 points that would encompass what the industry aspires to in its CSR programs. The discussion purposefully avoided delving into specific actions or legislative measures that might become a burden to the trade.

RJC Appoints Deo as CEO

The Responsible Jewellery Council (RJC) appointed Ashish Deo as its chief executive officer (CEO). Deo will begin his new role on September 8 and will be based in the RJC's London office.

Deo has vast global experience working with leading international consumer and luxury brands. He most recently served as commercial director of the Fairtrade Foundation.

“The board of the RJC and I welcome the appointment of Ashish Deo who will bring a depth of experience in strategic and geographical skills,” said James Courage, RJC’s chairman. “He will strongly complement the current management team to support membership growth and support services in all markets.

Winsome Appoints New Managing Director

Winsome Diamonds & Jewellery Ltd. appointed Jaikumar Kapoor as the company's managing director with immediate effect.

The company's board of directors unanimously approved the appointment at a meeting held on June 23.

Kors Appoints Lafay to Newly Created Position

Michael Kors has appointed Stephane Lafay to the newly created role of president of Asia as the luxury lifestyle company looks to expand in the region. Lafay will assume his new role on July 28 and will report to the company's chairman and CEO, John D. Idol.

Lafay has 25 years of experience working in Asia and has spent nearly two decades building brands in the region. Idol noted that Lafay's appointment points to the brand’s powerful momentum in the region and its sustained focus on growth, as the company continues to invest and work towards building a strategic roadmap for the Asia region. Michael Kors doubled its store count over the past two years to 100 locations in Asia.

Gubelin to Offer Off-Premise Testing

The Gubelin Gem Lab will be providing off-premise gem testing services in New York from July 14 through July 24 at 589 Fifth Avenue, Suite 1205. Gubelin asks that those interested in using its services contact the lab (Tel.+4141 429 1717 or Fax +4141 429 1734) in advance to make an appointment. The testing services will be available from 9am until 6pm.



U.S. Chain-Store Sales Up

U.S. chain-store sales rose 4.6 percent year on year for the week that ended on June 28, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Chain-store sales rose 1 percent compared with the previous week.

MINING

Angola Diamond Production Expected to Rise

Angola, Africa's third largest diamond producer, is set to increase production by more than 20 percent this year, following the start of a massive maintenance project on the country's largest diamond mine.

ALROSA Commissions Udachny

ALROSA commissioned its Udachny underground mine this past week and the mining giant anticipates that the operation will eventually become the largest underground diamond mine in Russia and one of the largest in the world. The underground mine is expected to reach its design capacity in 2019. ALROSA stated that once the design capacity has been reached, Udachny will be able to provide more than 5 million carats of diamonds per year.

ALROSA Shareholders Approve Dividend Increase

ALROSA's shareholders approved a 32 percent increase in dividends to RUB 1.47 per ordinary share for 2013. Shareholders voted to pay a total year-end dividend of $320.8 million (RUB 10.826 billion) at the company's annual general shareholders meeting held in Mirny on June 28.
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Rapaport Weekly Market Comment July 11, 2014



Polished prices coming under increased pressure as some Indian cutters reduce 1ct. and larger prices due to weak demand, oversupply and cash flow requirements. Mumbai IIJS show will provide important indication of price movements. Rapaport Melee Index +1% in 2Q. India proposes to raise polished import duty to 2.5%, extends diamond import credit cycle from 90 to 180 days. Dominion buys Fipke Holdings 10% stake in Ekati for $67M. De Beers sells 26% of S. Africa sales unit to BEE partner. Chow Tai Fook 1Q revenue -32% as Chinese gold rush slows, gem-set jewelry sales +2%. U.S. May polished imports -3% to $3.1B, polished exports +33% to $2B. Israel’s 1H polished exports +6% to $3.6B.


RapNet Data: July 10

Diamonds 1,126,032
Value $7,194,160,004
Carats 1,252,284
Average Discount -26.82%

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RAPAPORT ANNOUNCEMENTS


July
8-16
Tue-Wed


Rapaport Melee Auction

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August
6-13
Wed-Wed


Rapaport Melee Auction

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September
8-9
Mon-Tue


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QUOTE OF THE WEEK
Consistent with so many of our fellow U.S. retailers, we are experiencing a retail funk. We are confident that customer enthusiasm for our brand and employee morale are at all-time highs, yet we continue to experience slight traffic declines in this surprisingly tepid retail environment. While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014 – so we’re not alone in this.

Kip Tindell | Container Store









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The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.
















INDUSTRY



Rap Melee Index +3%

The Rapaport Melee Index (RMI™) for small diamonds increased by 1% to 138.78 during the second quarter of 2014, while year on year the index is up 3.4%. Polished trading slowed during the second quarter following a strong start in the first quarter at which time retail jewelers replenished inventory after the Christmas and Chinese New Year seasons. Diamond buying subsequently focused on filling specific orders during the second quarter; however, despite the slowdown, market sentiment remained relatively positive in June.

The third quarter is projected to be a difficult period for the diamond trade, as it has been in the past few years. At best, polished prices are expected to remain stable, which will put additional pressure on manufacturers’ profit margins and should influence a decline in rough demand.







India's Polished Import Duty May Rise

India's Finance Minister Arun Jaitley proposed a 2.5% customs duty on semi-processed, half-cut or broken diamonds, cut and polished diamonds and colored gemstones to prevent misuse and avoidance of assessment disputes. During his speech to Parliament, he also proposed that pre-forms of precious and semi-precious stones would be fully exempted from basic customs duty in an effort to encourage exports.

In other news, the Reserve Bank of India (RBI) stated that the "Clean Credit" or credit given by a foreign supplier to India-based buyers, without any letter of credit (suppliers) or letter of undertaking (buyers) or fixed deposits from any Indian financial institution for importing rough, cut and polished diamonds, may be permitted for a period not exceeding 180 days from the date of shipment. The previous requirement permitted a period not exceeding 90 days from the date of shipment. RBI issued the new guideline following consultation with the Gems & Jewellery Export Promotion Council (GJEPC) and the Surat Diamond Association.















RETAIL & WHOLESALE



Chow Tai Fook Sales Drop

Chow Tai Fook Jewellery Group Ltd. released unaudited operational data for the first fiscal quarter that ended on June 30 and estimated that group sales plunged 32% year on year. Same-store sales fell 40% group wide with a 28% decline for Mainland China and a 50% contraction for the Hong Kong, Macau and other Asian markets.

Retail sales fell during the quarter due to what the company defined as an "extraordinary high base effect" one year earlier that resulted from much higher gold product sales as gold prices declined in 2013. Nonetheless, gem-set jewelry sales performed well during the period by increasing 2%. Chow Tai Fook opened 46 points of sale in Mainland China during the first quarter; four were opened in Hong Kong, Macau and other Asian markets, increasing the retailer's total number to 2,123 as of June 30.







Michael Hill's FY Sales +10%

Michael Hill International estimated that its global sales rose 9.7% year on year to $454 million (AUD 483 million), while same-store revenue rose 5% to $408 million for the fiscal year that ended on June 30. Sales performance varied widely by region and in local currencies with Canada's sales growth up 30.3% to $65 million (CAD 69 million), while U.S. store sales declined 2.8% to $10 million. Jewelry store sales in New Zealand fell 1.5% to $97 million (NZD 110 million), but in Australia, the company's largest market, revenue increased 4.4% to $284 million.







Amazon Lands in Top 10

Online retailer Amazon.com broke into the Top 10 of STORES Media's annual list of the Top 100 U.S. retailers, which was published in the July issue of STORES Magazine. The top retailer, of course, was Walmart with annual sales of $334.3 billion in 2013. Fred Meyer Jewelers' parent company, Kroger, came in second place with revenue of $93.6 billion and Costco was third with $74.7 billion. Target was in fourth place with sales of $71.3 billion, followed by non-jewelry retailers, The Home Depot, Walgreen, CVS and Lowe's. Amazon.com's revenue jumped 27.2% in 2013 to almost $44 billion, pushing it to ninth place as grocer Safeway closed out the list at No. 10.

Breaking into the top 10 this day in age is an impressive feat that speaks to Amazon.com’s growth, according to the magazine. Kantar Group, which conducted the survey results, concluded that Amazon’s rise into the top 10 is symbolic of a shift in U.S. retail toward a genuinely multichannel future. Top 100 retailers of the future will have an in-depth knowledge of their shoppers across their physical and digital touchpoints, and they'll all have to fend off Amazon’s game changing economic and operating model.

Those retailers in the Top 100 list that sell jewelry included, Macy's (No. 14), Sears (No. 16), Kohl's (No. 22), BJ's Wholesale (No. 29), Nordstrom (No. 33), JCPenney (No. 34), Bed Bath & Beyond (No. 36), Dillard's (No. 67), QVC (No. 73), Neiman Marcus (No. 86), Belk (No. 93) and Signet Jewelers (No. 99).








BJ's Pledges No Dirty Gold

BJ's Wholesale Club endorsed Earthwork's No Dirty Gold campaign in an effort to source metals used for its jewelry and electronic offerings through socially and environmentally responsible methods. BJ's has 202 locations in 15 Eastern U.S states and is the first independent wholesale club company to commit to and endorse the campaign's Golden Rules. The company stated that it actively seeks ways to provide high-quality products that reduce the impact on the environment.

Tiffany & Co., Signet, Target Corp. and Helzberg Diamonds, among others have made the pledge. Earthworks stated that it hopes other jewelers and Costco and Macy's will follow suit.







Sotheby's to Sell 'Henry Graves Supercomplication'

Sotheby’s Geneva will present The Henry Graves Supercomplication timepiece for auction on November 14, which the auction house estimated could sell for more than $16.8 million (CHF 15 million). The watch was made by Patek Philippe in 1933 and is described as a most complicated watch to be made completely by hand. Sotheby’s first sold the Henry Graves Supercomplication in New York in December 1999 for $11 million, well above the presale estimate of between $3 million and $5 million. Now, the watch returns to auction the same year Patek Philippe celebrates the brand's 175th anniversary.







Tanishq Debuts Inara

Diamond jewelry brand Tanishq introduced Inara, an extension of a new line of diamond jewelry that it introduced in 2013. Inara was inspired from marine sea life with textured surfaces, fluid fineness and interwoven designs. Inara was unveiled in New Delhi this past week. The new line is crafted in white and yellow gold with white rhodium plating, which enhances the diamond look, according to Tanishq. The collection also incorporates colored gemstones such as ruby, emeralds, and blue, pink and yellow sapphires. The Inara line includes necklaces, bangles, earrings and finger rings.















GENERAL



Mass Media Misidentifies Antwerp Suspect

The Antwerp Prosecutor’s office confirmed that Rosy Blue's CEO, Dilip Mehta, was wrongfully identified in press reports as the "Dilip M." who had been arrested on their behalf in Dubai on June 18. Additionally, the Antwerp Prosecutor’s office never confirmed or posited that Mehta is involved in the ongoing diamond fraud case for which a suspect is now in custody. The officials called the case of mistaken identity "very regrettable." Rosy Blue demanded news agencies retract the "appalling" error from their reports and print retractions.







Singapore Gem Fair Opens in October

The Singapore Jewellery & Gem Fair, organized by UBM Media (Singapore), will take place for a second year from October 23 to 26, at the Sands Expo and Convention Centre. UBM stated that 283 exhibitors and 8,739 visitors attended the inaugural fair in 2013 and this year they expect to host 300 exhibitors from 30 countries and regions. UBM chose Singapore for this event given the large number of high-net-worth individuals (HNWIs) and a strong market for jewelry.







Antwerp Plans Fair for February

Organizers of the annual Antwerp Diamond Trade Fair (ADTF), an invitation-only loose diamond trade show, have scheduled to open for three days beginning February 1. The dates were coordinated with other industry events in the region, according to ADTF. Roughly 90 of Antwerp's leading diamond firms will be on hand to display a large selection of polished goods. The fair is a joint initiative between the Antwerp Diamond Bourse, the Diamond Club of Antwerp and the Antwerp Diamond Kring exchanges and is held on the bourses' diamond trading floors, which are converted into three exhibition spaces specifically for the event.







IsDMA Elects Koren

The Israel Diamond Manufacturers Association (IsDMA) elected Kobi Koren as its new president, succeeding Avraham (Bumi) Traub.

Koren also serves as chairman of the taxation committee and the consumer committee at the Israel Diamond Exchange (IDE) and is the acting president of IDE when its current president, Shmuel Schnitzer, is absent.







Schaffran Joins Worthy

Online marketplace Worthy.com named Ezzie Schaffran as its first vice president of operations to oversee the company's infrastructure and auction process from the New York office. Previously, Schaffran was the chief operating officer for Ice.com, where his career spanned 13 years beginning with an entry-level position and eventually working up into senior level roles. Worthy.com is an online platform that enables consumers to sell luxury goods, including diamonds, brand-named watches, jewelry, gemstones and precious metals by connecting them with pre-qualified buyers.







De Beers Rolls Out Melee Screening

De Beers International Institute of Diamond Grading & Research began distributing Automated Melee Screening (AMS) instruments to sightholders, with the first installation and training sessions having successfully taken place with Tasaki and Rosy Blue in Japan. Focus has now shifted to installing the AMS in sightholder facilities across key diamond trading hubs such as Antwerp, Mumbai, Hong Kong and Tel Aviv.

This is a phased roll out as technicians work in parallel to ensure timely yet comprehensive installation and training. The AMS instrument can be located in any type of environmentally controlled facility and operates as a single machine or multiple units; it screens near-colorless and colorless round brilliant diamonds from 0.20-carats down to 0.01 carat; is fully automated and will take up to 500 carats at any one time with a throughput of 360 stones per hour.















MINING



Dominion Increases Share in Ekati

Dominion Diamond Corporation entered into an agreement with C. Fipke Holdings Ltd. to acquire its stake in the Ekati diamond mine for $67 million, subject to adjustments to reflect joint venture contributions and distributions since June 30, 2012 when BHP Billiton sold the project. The Ekati mine consists of the core zone, which includes the current operating mine and other permitted kimberlite pipes, as well as the buffer zone, an adjacent area hosting kimberlite pipes with both development and exploration potential.

Dominion Diamond initially held an 80% interest in the core zone, with Fipke and Dr. Stewart Blusson each holding a 10%. Dominion Diamond carries a 58.8% interest in the buffer zone, with Fipke holding a 10% share and Archon Minerals Limited holding a 31.2% interest. The agreement stated that Fipke will sell its share in the core zone for $50 million and its interest in the buffer zone for $17 million.







Lucapa Recovers Six Type IIa Stones

Lucapa Diamond Company recovered six type IIa stones along with six other gem-quality diamonds from preliminary surface sampling at its Lulo diamond concession in Angola. The company noted that the diamonds were recovered from four separate kimberlite pipes. Five of the type IIa diamonds recovered weighed a total of 2.30 carats and ranged in size from 1.05 carats to 0.15 carats.







De Beers Completes Empowerment Mandate

De Beers completed its black empowerment mandate under the South African Mining Charter for both its diamond mining and its diamond trading businesses. Black empowerment partner Ponahalo Holdings, which has held a 26% stake in the mining operations of De Beers Consolidated Mines since 2006, now also holds a 26% stake in De Beers sightholder sales division of South Africa, located in Kimberley, Northern Cape Province. All of De Beers South Africa diamond production, roughly 5 million carats per year, is sorted and valued in Kimberley, where the company holds 10 diamond sales a year supplying South Africa’s leading diamond cutting factories.







Stornoway Finances Renard

Stornoway Diamond Corporation closed its financing transactions with Orion Mine Finance, Diaquem Inc. and Ressources Quebec, which are wholly-owned subsidiaries of Investissement Quebec, and the Caisse de depot et placement du Quebec for all funds related to completing the Renard diamond project.

The financing package totals $886 million (CAD 946 million) through a combination of senior and subordinated debt facilities, equity issuances, an equipment financing facility with Caterpillar Financial and the forward sale of diamonds. Concurrent with the closing, approximately $435 million (CAD 464 million) in aggregate gross proceeds from the public and private offerings of subscription receipts and the private offering of convertible debentures has been released, which will allow Stornoway to immediately begin construction on the Renard project.







Diamcor Completes Upgrades

Diamcor Mining Inc. completed the construction, installation and commissioning work that was associated with expanding an in-field dry-screening plant at the Krone-Endora at Venetia diamond project in South Africa. Plant upgrades included the installation of a second Dabmar Bivitec screening unit as well as the design, construction and installation of significant additional conveyor belt and material handling structures to create a closed-loop automated system. Diamcor Mining has contended for some time that the plant's expansion would enhance the efficient screening of fine material, reduce operating costs and effectively support increased processing capacity over the long term.







North Arrow Completes Till Sampling

North Arrow Minerals Inc. completed its planned till sampling at the Pikoo diamond project in central-eastern Saskatchewan, Canada. North Arrow collected 441 till samples in June, which was a follow up program to the discovery of diamond bearing kimberlite in 2013. The recent samples were sent to a processing laboratory for examination for which results will be used to evaluate selected potential kimberlite targets and provide more detailed regional coverage of the eastern portion of the property in defining individual kimberlite indicator mineral trains. Follow up exploration, including drilling, is tentatively planned for the fall 2014 and during the winter and spring of 2015.















STATS



U.S.

May $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $3,105 -3% $10,593 6%
Polished exports $1,970 33% $8,549 13%
Net imports $1,135 -34% $2,044 -17%

Rough imports $61 15% $330 71%
Rough exports $47 213% $235 114%
Net imports $14 -57% $94 16%

Net diamond account $1,149 -34% $2,138 -16%







Israel

1H $Mil. %Chng.
Polished exports $3,552 6%
Polished imports $2,155 3%
Net exports $1,399 11%

Rough imports $2,053 1%
Rough exports $1,752 6%
Net imports $302 -22%

Net diamond account $1,097 25%















ECONWATCH



Diamond Industry Stock Report

Summer trading doldrums have set in with retail stocks as industry shares were largely unchanged with the biggest movers being Chow Tai Fook, Richemont and Swatch, which were all down 3%. Indian shares were all lower except for Goldiam (+5%) and Goenka (+3%). Mining shares mainly higher, led by Gem Diamonds (+20%). View the extended stock report.
July 10 June 26 Chng.
$1 = Euro 0.734 0.734 0.000
$1 = Rupee 60.07 60.18 -0.1
$1 = Israel Shekel 3.43 3.42 0.01
$1 = Rand 10.69 10.64 0.05
$1 = Canadian Dollar 1.06 1.07 -0.01

Precious Metals
Gold $1,335.70 $1,316.50 $19.20
Platinum $1,510.00 $1,463.00 $47.00

Stock Indexes Chng.
BSE 25,372.75 25,062.67 310.08 1.2%
Dow Jones 16,915.77 16,846.13 69.64 0.4%
FTSE 6,672.37 6,735.12 -62.75 -0.9%
Hang Seng 23,238.99 23,197.83 41.16 0.2%
S&P 500 1,964.70 1,957.22 7.48 0.4%
Yahoo! Jewelry 992.65 1,004.09 -11.44 -1.1%
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