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RAPAPORT NEWS SERVICE | July 15, 2011 www.rapaport.com | news@rapaport.com


Industry Retail EconWatch India Mining Stats




Rapaport Weekly Market Comment July 15, 2011


Terror attack shakes Mumbai's diamond district. Indians vow to continue business as usual ahead of important IIJS show. Rapaport calls on diamond industry to support India through visits and increased business. Gold hits new record ($1,595.60/oz) as dollar weakens amidst U.S. and European debt concerns. Polished trading quiet but prices remain firm. Strong demand for very small, G+, VVS+ diamonds from branded high-end watch manufacturers. Rough prices continue to rise as large dealers hold back inventories. Rio Tinto's 2Q diamond production -24% to 2.733m cts. Belgium's June polished exports +38% to $1.5b. U.S. May polished imports +59% to $2.5b, polished exports +38% to $1.4b.


RapNet Data: July 14

Diamonds 722,544
Value $5,176,257,839
Carats 800,896
Average Discount -24.37%





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RAPAPORT ANNOUNCEMENTS


August
15-25
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com

Aug-Sep
29-1
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com





QUOTE OF THE WEEK:
We must be strong enough to minimize the impact the terrorists have on our lives and give support to those that have been affected. It will take a few days but soon things will be back to normal.

Sanjay Kothari | Gem & Jewellery Export Promotion Council (GJEPC)






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


Kothari Calls for Resilience

India’s diamond sector will be closed July 15 in honor of the victims of the July 13 terror attack on Mumbai. The government confirmed 17 people died and 131 were injured with 23 of those in serious condition. Listen to a firsthand account of events from Opera House.

Sanjay Kothari, vice president of the GJEPC, announced plans to host a condolences gathering on July 16 to honor those affected by the attack. Kothari added that the summer program of trade events would continue as planned and that every effort would be made to ensure the safety of all visitors.

The GJEPC is preparing to host its largest trade event of the year when large delegations of diamond dealers from Belgium, Israel and the Far East are expected to attend the India International Jewellery Show (IIJS) in Mumbai at the beginning of August. Kothari added that security would be increased to ensure the success of the event.





Rapaport News Broadcast

WATCH NOW: The Diamond Dealers Club (DDC) of New York is undergoing a transformation by reaching a wider group of members and offering value-add services at the club. DDC president Moshe Mosbacher, member services director Lou Rohde, and TransGuardian's president Jim Moseley explain initiatives that were launched this month.









RETAIL & WHOLESALE


Merit Sues SK Diamonds Over Sirena Copyright

Merit Diamond Corporation filed a lawsuit in the U.S. District Court for the Southern District of Florida against SK Diamonds of Texas for copyright infringement and trade dress infringement of signature pieces from its Sirena&reg; Collection. Merit Diamond stated that it "once again proves its willingness to go all out policing and protecting its internationally renowned Sirena Collection and the interests of all Sirena authorized dealers."





U.S. Retail Sales in June Improve

Department store sales rose 3.3% year on year in June to $14.9 billion on an unadjusted basis, according to U.S. government figures. Retail trade sales rose 8.5% and total retail and food services sales, excluding motor vehicles, rose 8.2% to $324.7 billion.





'Uplifting Earth' Reviews 10 Jewelry Brands

Lifeworth Consulting released a benchmarking study on the ethical performance of luxury jewelers and concluded most of the 10 brands analyzed - Boucheron, Bulgari, Buccellati, Cartier, Chanel, Chopard, Graff, Harry Winston, Piaget and Van Cleef & Arpels - failed to meet basic consumer expectations for sourcing of metals and gemstones. The report, titled "Uplifting Earth: The Ethical Performance of Luxury Jewellery Brands," was published by nonprofit group Fair Jewelry Action, and argued that while luxury jewelry brands hold the power and prestige to make a difference in the industry, all the brands except Cartier and Boucheron have been slow to demonstrate responsible business practices.

Some of findings revealed that even though some top brands belonged to the Responsible Jewellery Council (RJC), they lacked transparency, which is one pillar for membership. The brands also failed to state “how they supported” the Kimberley Process in effort to ensure that diamond mines operated without human rights abuses. The brands did not disclose how they combated corruption, which is another key pillar of RJC's best practices.

''Today, the efforts of responsible jewelry pioneers are outlining a vision of ethical excellence. By comparing the actions of 10 luxury brands with this new vision, the report finds luxury jewelry firms risk being left behind in an increasingly aspirational marketplace,” the report concluded.





Faberge Introduces New Collection

The Fabergé brand unveiled its first couture egg pendants since 1917 and named the collection ''Les Fameux de Fabergé.'' The pendants mark the beginning of a series of 12 one-of-a-kind jewelry egg pendants, retailing at up to $600,000, that include the Diaghilev Egg, an egg comprising diamond circles shimmering with rubies with a secret drawer containing a surprise, and the Diamond Egg, a high-tech titanium egg entirely invisibly‐set with white diamonds in which the diamonds outweigh the titanium frame, a feat never before achieved.

The collection will be exhibited at Fabergé in Geneva from July 18 through August 21. The eggs also pave the way for private commissions, rekindling the tradition of Fabergé as gifts for special occasions.





Blue Nile Updates Mobile App

Blue Nile launched its new mobile shopping application available in Apple's App Store. The new app has been updated with an enhanced engagement ring shopping platform and access to the company's full jewelry line. In addition, consumers from the more than 40 countries to which Blue Nile ships can purchase in their local currency directly through the app's shopping cart. The company's full line of bracelets, necklaces, pendants, and earrings are now available for purchase on the app as well.









STATS


Belgium

Figures rounded June $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,500 38% $7,340 37%
Polished imports $1,480 39% $6,890 37%
Net exports $32 9% $453 46%

Rough imports $1,420 60% $7,060 44%
Rough exports $1,610 34% $7,740 36%
Net imports ($197) ($678)

Net diamond account $228 -34% $1,130 3%






U.S.A.

Figures rounded May $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $2,520 59% $9,400 34%
Polished exports $1,360 38% $7,000 39%
Net imports $1,170 96% $2,400 50%

Rough imports $70 15% $280 26%
Rough exports $40 -9% $183 50%
Net imports $30 76% $97 0%

Net diamond account $1,390 39% $2,490 15%






Botswana

May $Mil. %Chng. YTD $Mil. %Chng.
Diamond exports $464 82% $1,800 44%










MINING


Rio Tinto Launches Pink Tender 2011

Rio Tinto launched its Argyle Pink Diamonds Tender 2011, a collection showcasing 55 pink diamonds, weighing 47.61-carats in total. The collection will be previewed from August through October. Rio Tinto collaborated with fashion illustrator David Downton who captured the pink diamonds for the 2011 Tender Catalogue.

In other news, Rio Tinto’s diamond production fell 24% year on year to 2.733 million carats in the second quarter of 2011. Argyle’s production dropped 39% to 1.58 million carats, Murowa mine production increased 110% to 80,000 and Diavik's production in total rose 11% to 1.79 million carats with Rio's share at 1.074 million carats. Harry Winston owns 40% share in Diavik to Rio's majority stake. Diavik's full-year target production remains at 6.9 million carats.





Lucara Secures Funds

Lucara Diamond secured a $50 million credit facility from Zebra Holdings and Lorito Holdings, each an investment company owned by the Adolf H. Lundin trust. The facility has a maturity date of December 31, 2013, and requires quarterly repayments of principal commencing September 30, 2012. No interest is payable during the term of the facility, but an interest rate of 5% will accrue if the facility is not repaid by the maturity date or there is an event of default. The facility was secured by a pledge of shares in the subsidiary that controls the mining company's AK6 diamond mine in Botswana.





Stellar Parcel to Fetch $191 Per Carat

Stellar Diamonds has valued its first parcel of diamonds from the Tongo dyke project in Sierra Leone at $191 per carat. The company is planning to sell 639 carats of the Tongo goods soon along with stones from its Mandala project at a tender in Antwerp.





Namakwa Tender Nets $5M

Namakwa Diamonds said it is on track to launch commercial mining at its Lesotho-based Kao kimberlite project in September, but warned that production at its other projects would fall below expectations in the current fiscal year. Namakwa generated an estimated $5 million at its June tender with average prices rising more than 50% since its previous sale in March. The tender included 5,494 carats from Kao, which sold for an average price of $372 per carat, 2,438 carats from its alluvial operations in South Africa’s North West Province, which sold for $724 per carat, and 7,269 carats from the Kasai Central Node in the DRC, at an average of $161 per carat.





BlackRock Increases Stake in Gemfields

BlackRock Inc. increased its stake in Gemfields International nearly a whole percentage point to more than 5% this week. BlackRock is third largest investor in the colored stone mining company just behind Standard Life Investments. Rox Ltd. owns majority share in Gemfields at 63%. Gemfields recently acquired a stake in an "important ruby deposit" in Mozambique.









ECONWATCH


For the week ending July 14

Most industry stocks were down this week with the exception of DGSE (+9%), Damiani (+2%), Theo Fennell (+2%), Gitanjali (+6%), Peregrine Diamonds (+15%), Rockwell Diamonds (+27%), Shore Gold (+2%), and Gemfields (+43%). Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe. July 14 July 7 Chng.
$1 = Euro 0.707 0.697 0.010
$1 = Rupee 44.57 44.27 0.3
$1 = Israel Shekel 3.43 3.39 0.04
$1 = Rand 6.84 6.67 0.17
$1 = Canadian Dollar 0.96 0.96 0.00

Precious Metals
Gold $1,586.00 $1,531.80 $54.20
Platinum $1,764.00 $1,741.00 $23.00

Stock Indexes Chng.
BSE 18,618.20 19,078.30 -460.10 -2.4%
Dow Jones 12,437.12 12,719.49 -282.37 -2.2%
FTSE 5,852.30 6,054.55 -202.25 -3.3%
Hang Seng 21,940.20 22,530.18 -589.98 -2.6%
S&P 500 1,308.87 1,353.22 -44.35 -3.3%
Yahoo! Jewelry 1,152.04 1,177.41 -25.37 -2.2%
_______________
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Rapaport Weekly Market Comment July 22, 2011


De Beers raises rough prices by an average 10% with very large DTC July sight estimated at about $850m. Some rough dealers still hoarding goods in anticipation of future price hikes despite forecasts for stable 3Q. Trading centers quiet as summer vacations approach in Belgium and Israel. Petra Diamonds revenues +24% to $221m as production -4% to $1.12m cts. while average prices +19%. BHP Billiton’s FY4Q diamond production -22% to 576,000 cts. due to lower grades at Ekati mine. India’s June polished exports +1% to $2.2b., rough imports +38% to $1.6b. Gold record tops $1,600/oz. barrier as U.S. debt debate continues to create currency uncertainty.



RapNet Data: July 21

Diamonds 734,922
Value $5,207,042,908
Carats 812,057
Average Discount -24.30%





Get Current Price List | Subscribe to Rapaport | Join RapNet



RAPAPORT ANNOUNCEMENTS


August
4-8
Thu-Mon
Rapaport at IIJS 2011
Bombay Exhibition Center, Mumbai
Booth: AL 5EX013-15 I-II

Meet the diamond suppliers at IIJS and view the diamonds they are exhibiting now!
Go to: www.rapnet.com/showlistings

August
15-25
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com

Aug-Sep
29-1
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com


September
12
Mon
Rapaport Int'l Diamond Conference 2011
The Times Center
242 W. 41st., New York
9:00 a.m. - 5 p.m.

•The Market for Luxury Jewelry
•Diamonds and Social Responsibility – Real Solutions to Real Problems

Free and open to all, but give a donation to Jewelers for Children.
Register now. Seating is limited.






QUOTE OF THE WEEK:
Retailers understand consumers are extremely focused on value and are taking this opportunity to offer substantial savings on merchandise.

Matthew Shay | NRF President






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


DTC July Sight Estimate $850M

The Diamond Trading Company's (DTC) July sight had an estimated value of $850 million as demand for rough diamonds remains robust before the August vacation period. Sight participants reported that prices rose by an average of 10%.

DTC acknowledged there were some adjustments to prices, but disputed that the increases reached double digits. Sight observers said the hikes affected all DTC boxes but mainly colored goods and white commercial goods. Rapaport estimates indicate that rough diamond prices have increased by more than 40% so far in 2011. Rapaport estimates that DTC sales in the first seven months of the year --through the July sight-- have increased 24% to about $3.85 billion. De Beers releases mid-year results next week.





Gold Hits New Record

Spot gold rose to a record of $1,611oz. on July 19, which was nearly 35% higher than one year ago. Gold continued to act as a safe haven for investors and speculators as the U.S. and E.U. debt crises remain unresolved.





U.S. Jewelry CPI Hits a Record

The U.S. consumer price index (CPI) for jewelry in the month of June jumped 9.5% year on year to record high of 176.29 points, marking the sixth consecutive month with a reading greater than 170 points, and the 41st consecutive month where the CPI has been above 150 points. Meanwhile, the CPI for all product categories rose 3.6% year on year in June to 225.72 points.









RETAIL & WHOLESALE


Rapaport Broadcast

Watch Now: JOVELLA 2011, Israel’s eight annual international jewelry and diamond exhibition, was held in Tel Aviv and included a diamond pavilion for the first time. The diamond area was sponsored by the Israel Diamond Institute Group of Companies (IDI). The annual exhibition was organized by the Stier Group, with the sponsorship of the IDI, the Israel Ministry of Industry, Trade and Labor, the Israel Export and International Cooperation Institute, the Israel Jewelry Manufacturers’ Association and the Federation of Israeli Chambers of Commerce.





India Signals Strong Retail Growth

The annual value of India’s local gems and jewelry trade is expected to jump 75% from now through 2015 to $47.9 billion, according to a study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). The group reported that rising purchasing power, lifestyle changes and overall increasing affordability among Indian middle class are significant reasons for higher jewelry demand.

ASSOCHAM also reported that at the current rate of growth, India’s gem and jewelry exports could exceed $50 billion in the current fiscal year that ends March 31, 2012. Growth is expected to be boosted by the annual festive season, which runs from August through October.

CRISIL Ratings added that India's small and mid-tier towns will help boost branded gold jewelry sales. Buoyed by increasing affluence and preference for branded jewelry, CRISIL said that retailers are expected to generate more than half of their revenues from these smaller population centers by fiscal period 2012-2013, compared with around 40 percent in fiscal period 2009-2010. The wide variety of design, aggressive marketing and promotional strategies, and innovative offers such as gold deposit and buy-back schemes, will also bolster the growth from these smaller towns.





Royal Asscher Opens in Tokyo

Royal Asscher opened a flagship store in Japan, on Ginza Street in Tokyo. The interior of the store is decorated in white, contrasting with Royal Asscher’s signature blue, and showcases a wide variety of Royal Asscher diamond engagement rings and jewelry. In commemoration of the opening, a Royal Asscher diamond tiara has been created containing a total of 10 carats of diamonds set in platinum and worth $385,000. The tiara will be loaned as a special treat to brides who purchase a Royal Asscher engagement ring in the Ginza store.





Damas Opens at Dalma Mall

Damas International inaugurated a new store in the Dalma Mall, Abu Dhabi. Damas incorporated its latest interior design concept to provide a sophisticated and welcoming ambience for customers.





Diamdel Advances in Business Competition

Diamdel Antwerp was selected as one of 10 businesses in Belgium to represent that nation in the European Business Awards competition, marking the second consecutive year that the company made the first cut. Diamdel will now compete for the coveted Ruban d'Honneur in the next round of the competition for the category of business of the year. Award winners will be unveiled in Barcelona on November 22, 2011.









STATS


India

Figures rounded June $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $2,220 1% $15,660 30%
Polished imports $1,760 20% $12,770 62%
Net exports $462 -36% $2,890 31%

Rough imports $1,590 38% $7,600 29%
Rough exports $151 66% $772 65%
Net imports $1,440 36% $6,830 26%

Net diamond account ($976) ($3,940)










MINING


BHP FY Production -18%

BHP Billiton fiscal year production fell 18% to 2.506 million carats following a fourth quarter drop of 22% at 576,000 carats. Output was negatively impacted by lower average ore grades at Ekati.





Petra Diamonds Sales +24%

Petra Diamonds reported that fiscal year revenue rose 24% to $220.6 million and production fell 4% to 1.117 million carats. The sales volume rose 4% to 1.174 million carats and the average price of goods sold jumped 19% year on year. Production is expected to increase in fiscal 2012 as the Finsch mine, which Petra bought from De Beers in January, comes into play. Output at Finsch is expected to reach 125,000 carats per month once the deal closes in the coming weeks which will help boost annual production to around 3 million carats.





Shore Estimates 34M Carats at Star, Orion South

Shore Gold announced that Star and Orion South kimberlites have "probable mineral reserves" of 279 million diluted tonnes, at a weighted average grade of 12.3 carats per hundred tonnes (cpht), containing 34.4 million carats at a weighted average price of $242 per carat over the 20-year life of the mine. Based upon this information, Shore Gold's senior vice president of exploration, George Read called Star and Orion a "world class diamond mine.”





Firestone Recovers High-Quality Stones

Firestone Diamonds recovered high-quality diamonds out of its Liqhobong mine in Lesotho. The most notable rough stones recovered included a 33-carat and 8-carat diamond. Two color stones included a 9-carat fancy vivid yellow and a 1.70-carat pink diamond. These diamonds will be offered during an August tender to be held in Gaborone, Botswana. Firestone expects the August sale to be "significantly larger" than the one held in June.





Gemfields Auction Nets $32M

Gemfields achieved $31.6 million from an auction of 740,000 carats of predominantly high-quality rough emeralds. The sale represented a 63 percent increase in quality-for-quality prices since a similar sale in December 2010.

Additionally, and following the success of ''Emeralds for Elephants'' in London one year ago, Gemfields is again leading an awareness campaign to raise funds to protect the elephant habitat in India. Gemfields chose 10 jewelry design firms that would use ethically mined emeralds from Zambia in the creation of a jewelry collection to be auctioned by Sotheby's in October. A percentage of profits from the sale will help fund the World Land Trust’s ''Indian Elephant Corridor'' project.

The Emerald for Elephants' other sponsors include Jaguar Land Rover, The Taj Hotels Resorts and Palaces, Sotheby’s, CanazWest Pictures, Mumm Champagne, BVC, Show Stuff and the Gemological Institute of America India.





Stornoway Welcomes New Board Members

Stornoway Diamond Corporation appointed Monique Mercier, John LeBoutillier and Michel Blouin to its board of directors pursuant to the mining company's recent acquisition of DIAQUEM's interest in the Renard diamond project. The new directors were designated by DIAQUEM's parent organization Investissement Quebec and were classified as independent directors.





NUM Calls for De Beers Strike

The National Union of Mineworkers (NUM) in South Africa served its notice to strike against De Beers Consolidated Mines after negotiations failed to reach a wage settlement. The strike is set to officially begin on July 22. NUM demanded a 15% increase, and De Beers offered a 7.5% increase.





Steinmetz Invests $5M in Rockwell

Rockwell Diamonds confirmed that the Steinmetz Diamond Group, through its subsidiary Daboll Consultants, subscribed to $5 million in the current private placement at 75-cents per share, or 5-cents per share prior to a 15:1 consolidation. The placement closes on July 22. According to a valuation by Evans & Evans Inc., the range of fair market value for Rockwell Diamonds was determined to be between $62 million and $69.1 million. Rockwell's properties, in aggregate, were valued in a range of $149.5 million and $165 million.









ECONWATCH


For the week ending July 21

Industry stocks were largely mixed this week with the exception of: DGSE +16%, Man Sang +35%, Zale +21%, Rockwell Diamonds -14%, and Shore Gold -27%. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.
July 21 July 14 Chng.
$1 = Euro 0.690 0.707 -0.017
$1 = Rupee 44.42 44.57 -0.1
$1 = Israel Shekel 3.39 3.43 -0.04
$1 = Rand 6.78 6.84 -0.06
$1 = Canadian Dollar 0.94 0.96 -0.02

Precious Metals
Gold $1,590.30 $1,586.00 $4.30
Platinum $1,783.00 $1,764.00 $19.00

Stock Indexes Chng.
BSE 18,436.19 18,618.20 -182.01 -1.0%
Dow Jones 12,724.41 12,437.12 287.29 2.3%
FTSE 5,903.50 5,852.30 51.20 0.9%
Hang Seng 21,987.29 21,940.20 47.09 0.2%
S&P 500 1,343.80 1,308.87 34.93 2.7%
Yahoo! Jewelry 1,149.82 1,152.04 -2.22 -0.2%
_______________
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Registrovaný uživatel
Rapaport Weekly Market Comment July 29, 2011


High hopes for next week's Mumbai show to signal strong post-summer polished trading. Mining companies report record 1H results as high rough prices compensate for lower volume sold: De Beers rough sales +33% to $3.5B, profit +72% to $694M, production flat at 15.5M cts., prices +35%; ALROSA sales +9% to $2.2B, profit +450% to $598M, production +8% to 19M cts., prices +41%; Gem Diamonds rough sales +84% to $194M as average Letseng prices +77% to $3,052/ct. Zimbabwe Treasury reports 1H Marange production of 2.329M cts., diamond exports of $103.9M. LVMH 1H watch and jewelry sales +30% to $835M. Bulgari 1H jewelry sales +44% to $347.5M. Gold prices hit record $1,629/oz.



RapNet Data: July 28

Diamonds 739,643
Value $5,289,086,859
Carats 820,646
Average Discount -24.28%





Get Current Price List | Subscribe to Rapaport | Join RapNet



RAPAPORT ANNOUNCEMENTS


August
4-8
Thu-Mon
Rapaport at IIJS 2011
Bombay Exhibition Center, Mumbai
Booth: AL 5EX013-15 I-II

Meet the diamond suppliers at IIJS and view the diamonds they are exhibiting now!
Go to: www.rapnet.com/showlistings

August
15-25
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com

Aug-Sep
29-1
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com


September
12
Mon
Rapaport Int'l Diamond Conference 2011
The Times Center
242 W. 41st., New York
9:00 a.m. - 5 p.m.

•The Market for Luxury Jewelry
•Diamonds and Social Responsibility – Real Solutions to Real Problems

Free and open to all, but give a donation to Jewelers for Children.
Register now. Seating is limited.






QUOTE OF THE WEEK:
[Minimal GDP] growth represents households that are spending only on necessities. We don't have households reaching for credit. They're still very much mired in that mind set of paying down debt, rather than taking on debt. And that, on top of a weak labor market, is keeping consumers from spending.

Ellen Zentner | Nomura






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


De Beers 1H Sales Hit a Record

De Beers reported group sales rose 30% year on year during the first half to a record $3.89 billion, while rough sales for the Diamond Trading Company (DTC) jumped 33% to $3.5 billion. Cost of sales rose 26% to $3.07 billion while operating costs, including exploration, marketing and technical services, fell 10% to $200 million. Net earnings rose 72% to $694 million.

Production remained flat at 15.534 million carats with the bulk of production arriving from Debswana where output increased by 10% to 11.320 million carats. De Beers expects to finalize a new marketing agreement with Botswana, governing its Debswana production, in the coming month. Furthermore, De Beers lowered its production forecast for 2011 to 35 million carats from 38 million carats as maintenance and asset management issues, aggravated by heavy rainfall in southern Africa, resulted in lower-than-expected output in the first half of the year. The shortfall was not expected to create a shortage.

In terms of retail, De Beers noted that a full U.S. Forevermark expansion will hit in second half. De Beers Diamond Jewellers (DBDJ) launched in China during the first half and will focus its expansion on the Far East.





ALROSA 1H Sales +9%

ALROSA’s diamond sales increased 9% year on year to $2.16 billion in the first half of 2011 as prices rose 41%. ALROSA sold 19.1 million carats of diamonds for an average $113 per carat during the six months, while in the first half of 2010 it sold 24.1 million carats for $80 per carat. ALROSA’s first half production grew 8% to 19 million carats. First-half profits jumped five-fold to $598 million.





Diamdel’s July Auction 100% Sold by Lot

Diamdel sold all 410 rough lots during its recent diamond auction that ended on July 14. Goods spanned near-gem quality, small sizes, grainers, 2-carat plus, and large product categories. Diamdel stated that 189 businesses took part in the July auction and 89 of those firms won lots. Fifty-five percent of lots by value were sold to those who were not Diamond Trading Company (DTC) sightholders while 45 percent of the lots were won by sightholders.





Gold Hits New Record

Spot gold reached a new high during the late morning hours in New York on July 27 at $1,629.60oz. Gold was up 40% year on year and up 8% in the past 30 days. At the same time, silver was trading mostly flat at $40.53oz. and platinum gained $2 to $1,804oz.










RETAIL & WHOLESALE


Rapaport News Broadcast

Watch Now: The JA New York summer show offered insight to upcoming fall fashion trends for diamond jewelry. Take a look at the following new collections from ISTA, Cristina V., and Baharra. Additionally, learn how Armand Jacoby sets diamonds in its high carbon compound.





Titan’s 1H Jewelry Sales +72%

Titan Industries Ltd. reported sales rose 63% year on year to $463.65 million, during its first quarter of 2012 that ended on June 30. Net profit grew 76.4% to $32.46 million. The company, which owns the Tanishq jewelry brand, attributed strong growth to improved sales across all its divisions and retail chains, but the jewelry business performed exceptionally well. Jewelry sales surged nearly 72% to $369.88 million, while watch division sales rose 23% to $70.88 million.





LVMH 1H Jewelry Sales +30%

LVMH reported that sales for the watches and jewelry segment improved 30% year on year to $835 million, during the first half of fiscal 2011. Total sales for LVMH rose 13% to $15 billion and net profit rose 25% to $1.9 billion . The LVMH Group continued to enjoy sustained growth in the U.S., Europe and Asia.





Bulgari Turns a Profit in 1H

The Bulgari Group reported that sales for the first half of 2011 increased 23% year on year to $784 million. The company also reported profit of $13 million compared with a loss of $11 million one year ago. Jewelry sales jumped 20% to $347.6 million, due to strong sales of its high-end jewelry line B.zero1, and its Sassi line; watch sales rose 25% and perfume sales leaped 28%.





Charles & Colvard 1H Sales -3%

Charles & Colvard reported first-half sales fell 3% to $6 million. Loose moissanite gemstone sales decreased 7% to $5 million, but finished jewelry sales increased 18% to approximately $932,000. The company recorded a loss of $340,000 compared with profit of $635,000 one year ago.





Amazon’s 2Q Profit -8%

Amazon.com reported that revenue rose 51% year on year to $9.91 billion and net profit fell 8% to $191 million during the second quarter that ended on June 30. The online retailer recorded a $477 million favorable impact from foreign exchange rates for the second quarter. Amazon's cost of sales rose 52 percent to $7.53 billion. During the second quarter, Amazon.com launched MyHabit.com, a member-only fashion destination and it also permitted "Marketplace" sellers to list products across the European websites using one single seller account, allowing sellers to make their inventory available across Amazon.co.uk, Amazon.de, Amazon.fr and Amazon.it.





U.S. Affluent Consumer Spending -18%

Unity Marketing's measure of consumer confidence among the highest earning U.S. consumers, the Luxury Consumption Index (LCI), took the steepest quarterly plunge since the Great Recession. The LCI dropped 16.8 points to reach 66 points in the second quarter, which is significantly lower than the previous quarter's 82.8 points. The LCI stands close to the level attained at the onset of the Great Recession, according to Unity Marketing. Corresponding to the decline, the average amount spent by affluent consumers on luxury goods and services in the second quarter 2011 declined 18.4% year on year. Learn more about these trends when Unity Marketing's Pam Danziger presents at the Rapaport IDC on September 12.





Arjav Diamonds Hosts Online Auction

Arjav Diamonds will host its second online auction of rough diamonds on August 12, offering 60 lots of rough diamond with sizes ranging from 5 carats to greater than 100 carats in a mix of single stones and assorted parcels.





Gitanjali Incorporates Subsidiary

Gitanjali Gems incorporated a wholly owned subsidiary named Leading Italian Jewels, made up of brands it acquired in the fall of 2010 from Italy's DIT group, including Valente, Stefan Hafner, Nouvelle Bague, Io Si, and Porrati. The new subsidiary, which Gitanjali has stated would help the group expand in Europe, will primarily deal in the trade of precious stones, diamonds, jewelry and pearls. Gitanjali is one of the largest jewelry retail brands in India.





Ulysse Nardin Targets New Campaign for U.S.

Swiss watch manufacturer Ulysse Nardin is launching a new marketing campaign targeting U.S. consumers through the brand's advertising agency, Mad 4 Marketing, which will use rVue technology, a demand-side platform, to plan, buy, and manage digital out-of-home (DOOH) and place-based media. The platform connects advertisers with DOOH networks to streamline campaign management and analytics and billing, so advertisers can research and create media plans and purchases across a diverse group of participating digital networks to reach some 115 million impressions per day, according to rVue Holdings.





Esmerian Fined $20M, Sentenced to Six Years

Ralph Esmerian, the former owner of Fred Leighton, was sentenced to six years in prison and ordered to pay $20 million to his creditors for three charges of wire fraud, bankruptcy fraud, and concealment of assets. Charges stemmed from his illicit pledging of collateral used to back $217 million worth of loans acquired from 2005 to 2006 from Merrill Lynch and Acorn Capital Group LLC while running the luxury jeweler. The $20 million fine represents the amount of collateral he illegally sold without reporting it to his creditors.





Surat Seeks More Air Travel Options

Surat's diamond trade will close July 29 in effort to draw attention to the lack of air travel options into the city. The Surat Diamond Association (SDA) stated that only three flights a day arrive in Surat, so the lack of regular flights from major cities remains a big hurdle.









MINING


Zimbabwe 1H Production Tops 2M Cts.

Zimbabwe’s diamond production stood at 2.329 million carats in the first half of 2011, according to the country's finance minister, Tendai Biti. The bulk of production was from the Marange fields. The Treasury expects full-year production of 8.2 million carats, slightly lower than 2010 production of 8.435 million carats. Biti added that Zimbabwe exported 716,959 carats from the Marange fields during the first half.





Catoca's Production -4% in 2010

Production at the Catoca mine in Angola fell 4.5% year on year to 6.741 million carats in 2010 as diamond recovery fell from 0.72 carats per ton to 0.64 carats per ton. Catoca sold 6.852 million carats for an average price of $76.95 per carat, representing an increase of 24% from the previous year. Sales rose 20% to $527 million and net profits grew 59% to $111 million.





Letšeng's Rough Diamond Prices Soar in 1H

Gem Diamonds reported that Letšeng sales rose 124% year on year to $160.6 million during the six months that ended on June 30, with average prices up 77% to $3,052 per carat. Production at Letšeng increased 18% to 52,798 carats.





Firestone Raises $22M

Firestone Diamonds has conditionally raised $22 million through the placing of 48,649,000 new ordinary shares with investment institutions and other investors. The financing will accelerate development work at its Liqhobong mine in Lesotho and complete the grid power connection at its BK11 mine, and commence evaluation of BK16 and other Orapa kimberlites in Botswana.





Lucara Lists in Botswana

Shares of Lucara Diamond, which is developing the AK6 mine in Botswana and the Mothae mine in Lesotho, began trading on the Botswana Stock Exchange (BSE). Lucara will continue to trade on the Toronto Stock Exchange.





Rockwell Raises $7M

Rockwell Diamonds raised $6.9 million through the sale of three non-core assets in South Africa. The assets sold included the Makoenskloof property for $1 million, the PC3000 excavator located at the Wouterspan mine for $3.2 million, and the Holpan DMS plant for $2.8 million.









ECONWATCH


For the week ending July 28

U.S. retailers were trading lower as consumer spending comes under pressure. The biggest losers this week were Movado Group (-11%) and Zale (-17%). European jewelers and Indian diamond firms were little changed. Diamond mining firms were mixed with Rockwell Diamonds (+9%), True North (+9%) and Petra Diamonds (+6%) showing the biggest gains, and Harry Winston (-7%) and Gemfields (-9%) closing the week in negative territory. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe. July 28 July 21 Chng.
$1 = Euro 0.698 0.690 0.008
$1 = Rupee 44.07 44.42 -0.4
$1 = Israel Shekel 3.43 3.39 0.04
$1 = Rand 6.75 6.78 -0.03
$1 = Canadian Dollar 0.95 0.94 0.01

Precious Metals
Gold $1,615.19 $1,590.30 $24.89
Platinum $1,786.00 $1,783.00 $3.00

Stock Indexes Chng.
BSE 18,209.52 18,436.19 -226.67 -1.2%
Dow Jones 12,240.11 12,724.41 -484.30 -3.8%
FTSE 5,873.21 5,903.50 -30.29 -0.5%
Hang Seng 22,570.74 21,987.29 583.45 2.7%
S&P 500 1,300.67 1,343.80 -43.13 -3.2%
Yahoo! Jewelry 1,140.09 1,149.82 -9.73 -0.8%
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Rapaport Weekly Market Comment August 12, 2011


Financial turmoil shaking confidence in consumer markets. India show fails to meet expectations as buyers demand lower prices due to financial uncertainty. Rough prices unsustainable at current levels as liquidity dries up in cutting centers. U.S. 2Q online retail sales +14% to $37.5B. Shrenuj & Co. 1Q sales +45% to $150M, net profit +44% to $4.3M. U.S. June polished imports +6% to $1.9B, polished exports +32% to $2.5B. Belgium’s July polished exports +39% to $1.6B. Gold tops $1,800/oz. Rapaport announces initiatives to establish Ethical Certification, Investment Diamond Price Index and Rapaport Diamond Fund

RapNet Data: Aug. 11

Diamonds 733,540
Value $5,212,362,943
Carats 810,318
Average Discount -24.65%
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RAPAPORT ANNOUNCEMENTS


August
15-25
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com

Aug-Sep
29-1
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com


September
12
Mon
Rapaport Int'l Diamond Conference 2011
The Times Center
242 W. 41st., New York
9:00 a.m. - 5 p.m.

•The Market for Luxury Jewelry
•Diamonds and Social Responsibility – Real Solutions to Real Problems

Free and open to all, but give a donation to Jewelers for Children.
Register now. Seating is limited.

QUOTE OF THE WEEK:
The U.S. Federal Reserve rate signals an extended period of diminished, if not negative, economic growth for quite sometime. This bodes poorly for demand, but may indicate additional easing measures, which we know from recent experience is supportive of asset prices, especially commodities. The acute level of uncertainty, however, will have to be wrung out before energy prices can rebound from the upcoming round of financial machinations.

John Kilduff | Again Capital LLC
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. To get on the fast track, email your resume to careers@rapaport.com.

INDUSTRY


Rapaport Group Initiatives

The Rapaport Group announced three new initiatives this week in Mumbai.

The Diamond Price Index - RAPI will be used by the financial sector to monitor the price of diamonds. The index will be published daily and available online. The Index will be based on the best price per carat for round, D-H, IF-VS2, Rapaport Specification 2 diamonds offered for sale on the RapNet Diamond Trading Network. While the RAPI indices will be available for various size categories, the primary index will be for one carat sizes.

The Rapaport Diamond Fund, a proprietary diamond investment fund, will provide an opportunity for the financial community to invest in diamonds. The fund will offer transparency and efficiency enabling access to investment grade diamonds at fair market values.

The Rapaport Ethical Certification will be created to track diamonds from the source to polished and then to finished jewelry. Different ethical grades will be provided with the highest grade reserved for fair trade diamonds that provide economic beneficiation to artisanal miners. Recycled diamonds will receive the next highest grade followed by ethical diamonds from known sources that comply with ethical mining, production and environmental standards. Initial Rapaport certification centers will be based in Surat, Mumbai, and New York.

Read Martin Rapaport's "After Kimberley … Now What.''
Gold Hits New Record

Spot gold hit a record of $1,813.79oz., during stock market turmoil on Wall Street August 10. At the record price, gold was up 48% year on year and had increased 16% in the past 30 days.







Rapaport News Broadcast

Watch Now: The India International Jewellery Show (IIJS) disappointed some traders of loose diamonds, but finished jewelry sales were strong. Exhibitors reported good demand for rounds in pointer sizes up to 3 carats, VS-SI clarities in all colors, given the diversified tastes apparent in various regions of India. Rajiv Jain, chairman of the Gem & Jewellery Export Promotion Council, shared his observations. Also in this broadcast, Shrenju sales in first fiscal quarter rose 45% to $150 million, profit jumped 41% to $4.3 million.
RETAIL & WHOLESALE


U.S. Online Retail Sales +14%

Online U.S. retail sales rose 14% year on year to $37.5 billion during the second quarter of 2011, according to metrics firm comScore Inc. The rate of growth was primarily a function of an increase in the number of buyers, which jumped 16%, with seven in 10 Internet users now making at least one online purchase during each quarter. The top performing online product categories in the quarter, which grew at least 15% year on year, included consumer electronics, hardware and software, and event tickets. The top 25 online retailers accounted for 66.4% of dollars spent online, down from 67.7% one year ago.
DGSE Revenue +60%

DGSE Companies reported that revenue rose 60% to $33.29 million, during the second quarter that ended on June 30. Net earnings, however, plunged 90% to $568,099 due to difficult comparisons. DGSE stated that earnings for the same period of fiscal 2010 included $8.6 million in "other income" related to its acquisition of Superior Galleries Inc.
Laxmi Diamond Secures $70M in Orders

Laxmi Diamond Private Ltd. received diamond and jewelry orders worth $70 million, during IIJS, a total that was up 40% year on year. The Mumbai-based manufacturer and distributor of polished diamonds stated that orders were mostly from the local buyers.
Zale, Vera Wang Launch Bridal Collection

Zale and Vera Wang announced the launch of a new, exclusive collection of diamond bridal jewelry called "Vera Wang LOVE," which includes a variety of diamond engagement rings, matching wedding bands and solitaire bridal jewelry. The collection will be available at Zales stores throughout the U.S. and Puerto Rico in October 2011, and in Peoples Jewellers stores Canada in early 2012.
Kiran Offers Two New Jewelry Lines

Kiran introduced two new jewelry lines designed and manufactured by its own diamond jewelry arm, Kiran Jewelry, at IIJS. One of the collections, ''Unity,'' incorporates a multi-diamond setting that creates the impression of one diamond that is much bigger than the actual weight of diamonds used. The other, ''Tanzanite Dreams,'' is a luxurious blend of diamonds and tanzanite that provide a rich and high class feel.
ORO to Create Gold Jewelry in 18K

The ORO brand will replicate its 22-karat gold jewelry designs in 18-karat to attract a wider range of consumers in India given that gold prices have risen so high. Additionally, the ORO brand expects to introduce new designs using 18-karat. It produces 2,000 pieces daily, but only 10% of the products are in 18-karat. The manufacturer expects to increase that ratio to 25% soon. ORO expects to make its 18-karat designs available throughout India.
Embee Diamonds Partners with Zmurchok

Embee Diamonds has partnered with Doug Zmurchok Agencies to further develop the brand across Western Canada. Embee Diamonds has a network of 70 independent jewelry retailers in Canada, Japan, Korea, and the U.S. and U.K. Embee Diamonds developed the Sirius Star range of diamond shapes.
2012 DTC Sight Dates

The Diamond Trading Company (DTC) sight dates for 2012 are as follows:

January 16-19
February 20-23
March 26-29
May 1-4
June 11-14
July 16-19
August 28-31
October 2-5
November 5-8
December 10-13
STATS

Belgium

Figures are rounded July $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,560 39% $8,900 38%
Polished imports $1,180 47% $8,070 38%
Net exports $381 20% $835 33%

Rough imports $1,420 101% $8,480 52%
Rough exports $1,860 85% $9,600 44%
Net imports ($444) $1,120 -2%

Net diamond account $825 31% $1,960 13%
U.S.A.

Figures are rounded June $Mil. %Chng. YTD $Mil. $Chng.
Polished imports $1,900 6% $11,300 28%
Polished exports $2,380 32% $9,400 41%
Net imports ($482) $1,900 -10%

Rough imports $48 9% $328 23%
Rough exports $40 43% $233 55%
Net imports $8 -50% $105 -9%

Net diamond account ($474) $2,000 -10%
MINING
Feasibility Study Next for Merlin

North Australian Diamonds Limited chose Consulment Pty Ltd. to conduct a definitive feasibility study (DFS) on a 300,000-carat per year operation at its Merlin diamond project in Australia. The DFS will consider a potential larger scale operation, but foremost, it will consider a number of key variables for the Merlin project, some of which are well advanced or completed. Pre-feasibility production trials resulted in the recovery of 10,600 carats of rough diamonds, of which 2,590 carats were greater than 1-carat, representing 24.4 percent of production.
CKGR Residents Get New Water Holes

Gem Diamonds Botswana will transfer four boreholes to residents of the Central Kalahari Game Reserve (CKGR) at the end of August as part of its outreach surrounding development of its Ghaghoo Diamond Mine in Botswana. The company is investigating the sustainable viability of various water purification options to ensure that the boreholes will provide potable water to CKGR communities.
Amaruk Program Begins

Diamonds North Resources launched its 2011 exploration program at the Amaruk property in Nunavut, Canada, which will focus on top priority gold prospects as well as follow-up to a new generation of kimberlite targets identified from electromagnetic airborne data. Diamond exploration on the property will primarily include detailed till sampling in close proximity to high-priority targets identified from the airborne data.
ECONWATCH


For the week ending Aug. 11

Considering how the markets reacted this week to simply "poor economics" in the U.S., a bloodbath was certain for retailers. However, not all of the stocks Rapaport News follows ended lower. Goenka Diamond rose 5%, Rajesh Exports was up 1%, Ren. Jewellery rose 7%, Su-Raj Diamonds up 2%, Titan up 4%, Rockwell Diamonds up 2%, Shore Gold jumped 13%, Mwana Africa rose 2%, and Stellar Diamonds was up 1%. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.

Aug. 11 Aug. 4 Chng.
$1 = Euro 0.704 0.708 -0.004
$1 = Rupee 45.15 44.52 0.6
$1 = Israel Shekel 3.54 3.50 0.04
$1 = Rand 7.21 6.94 0.27
$1 = Canadian Dollar 0.99 0.97 0.02

Precious Metals
Gold $1,756.80 $1,650.80 $106.00
Platinum $1,784.00 $1,721.00 $63.00

Stock Indexes Chng.
BSE 17,059.40 17,693.18 -633.78 -3.6%
Dow Jones 11,143.31 11,383.68 -240.37 -2.1%
FTSE 5,168.24 5,405.76 -237.52 -4.4%
Hang Seng 19,595.14 21,884.74 -2,289.60 -10.5%
S&P 500 1,172.65 1,200.10 -27.45 -2.3%
Yahoo! Jewelry 988.88 1,050.87 -61.99 -5.9%
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Rapaport Weekly Market Comment August 19, 2011


Markets turning cautious as rough prices soften in response to tighter credit and uncertain economic conditions. De Beers rough selling at low premiums, and even discounts, ahead of next week’s DTC sight. Arjav rough auction sells 45% by lot. Polished prices soften. Buyers expecting lower prices but may be disappointed as Far East consumers expected to continue buying diamonds in spite of U.S. slowdown. Hong Kong’s 2Q polished imports +37% to $4.5B, polished exports +44% to $3.3B. Gitanjali Gems FY1Q revenues +39% to $573M, profits +57% to $27M. Sarin Technologies 2Q revenues +9% to $16M, profits +8% to $5M. Diamond industry broker Gerald Rothschild dies age 86.




RapNet Data: Aug. 18

Diamonds 725,637
Value $5,247,086,434
Carats 799,053
Average Discount -24.49%





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RAPAPORT ANNOUNCEMENTS


August
15-25
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com

Aug-Sep
29-1
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com


September
12
Mon
Rapaport Int'l Diamond Conference 2011
The Times Center
242 W. 41st., New York
9:00 a.m. - 5 p.m.

JOIN US AND gain important tools and insights into:
•The Market for Luxury Jewelry
•Diamonds and Social Responsibility – Real Solutions to Real Problems

Free and open to all.
Register now. Seating is limited.






QUOTE OF THE WEEK:
Our revised forecasts show the U.S. and the E.U. hovering dangerously close to a recession --defined as two consecutive quarters of contraction-- over the next six to 12 months. A negative feedback loop between weak growth and soggy asset markets now appears to be in the making in Europe and the U.S. Against this dire growth backdrop, we no longer expect the ECB to hike rates. Instead, we now see the bank cutting rates next year. We lower our refi-rate forecast for the end of 2012 to 1% from 2%.

Joachim Fels | Morgan Stanley






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


U.S. Jewelry Inflation Soars

The U.S. consumer price index (CPI) for jewelry in the month of July jumped 11.9% year on year to record high of 176.46 points and marked the seventh consecutive month with a reading greater than 170 points. The July reading broke the previous record high, which was set in June. Jewelry inflation has been driven higher by continued strong year-on-year price increases for diamonds, gold and silver.





Gold Hits New Record

New York spot gold surged to a new record of $1,827.80oz. and traded solidly near that high as economic concerns weighed on Wall Street. Gold's new record price was up 49% year on year and 14% higher than 30 days ago.

The World Gold Council reported that second quarter gold demand by value rose 5% to $44.5 billion. Global demand for gold jewelry rose 34% to $21.14 billion. The group’s “Gold Demand Trends - Second Quarter 2011” report released today credited gold’s strong performance to China and India, where the combined demand represented 55% of the total value. Gold jewelry demand in terms of weight rose by double-digits in China, India and Hong Kong. However demand fell by double-digits in Japan, Saudi Arabia, Italy and the U.K. The U.S. experienced an 8% drop in gold jewelry demand during the second quarter.









RETAIL & WHOLESALE


Rapaport News Broadcast

Watch Now: ShopNBC sales rose 5% to $132 million in second quarter, helped by jewelry sales, still the group reported a loss of $4.5 million. Bidz.com reported a 22% drop in second quarter sales to $20 million and it loss jumped 712% to $5.3 million. Damas' chief executive, Anan Fakhreddin, was awarded the ''Turnaround Executive of the Year'' for the eighth annual International Business Awards (IBA) 2011. Damas also earned a ''Distinguished Honoree'' medal for the company of the year category in retail. Deloitte's latest consumer survey for July found a mixed bag of economic results, and warned retailers to keep on top of their competitors.





Rajesh 1Q Profit Doubles

Rajesh Exports Ltd. reported that sales rose 10% year on year to $1.04 billion for its first fiscal quarter that ended on June 30. Cost of sales increased 9%to $1.02 billion and net profit more than doubled to $21 million. Rajesh opened 25 Shubh Jewellers during the quarter and is in the process of opening another 50 retail showrooms in the southern Indian state of Karnataka.





Gitanjali 1Q Profit +57%

Gitanjali Gems Ltd. reported that sales rose 39% year on year to $573.0 million for its first fiscal quarter that ended on June 30. Strong growth was driven by the company's diamond and jewelry segments. Net profits grew about 57% to $27.2 million. Diamond business increased 36% to $285.2 million, jewelry sales rose about 37% to $300.6 million.





Shrenuj 1Q Profit +41%

Shrenuj & Co. reported group sales rose 45% year on year to $149.4 million in its first fiscal quarter that ended on June 30. Diamond sales rose 78% to $112.7 million and studded jewelry sales, including branded and retail sales, increased 7% to $42.3 million. Net profits grew 41% to $4.2 million. Shrenuj is targeting sales growth of 25% to 30% through March 2012. Shrenuj estimates that polished prices have declined by around 5% as liquidity has tightened in recent weeks, but the correction is temporary and the company expects prices to stabilize and gradually start increasing again.





July Dpt. Store Sales Flat

U.S. department store sales were basically flat in July at $14 billion. Advance estimates of total U.S. retail and food services sales for July, unadjusted for price changes, rose 8.5% year on year to $390.4 billion. Retail trade sales jumped 8.9% from July 2010.





Saks 2Q Loss at $8M

Saks reported that sales during its second fiscal quarter rose 13% year on year to $670.2 million in the three months that ended on July 30. Same-store sales rose nearly 16%, cost of sales rose 12% to $415.6 million, and the luxury retailer reported a loss of $8.4 million, which was down from a loss of $32 million one year ago. Consolidated inventories on July 30 stood at $689.2 million, representing a 3% year on year increase.





Jewelry Sales Rise in Japan

The Japan Department Stores Association reported that jewelry sales rose 5.3% year on year in July. Overall, department store sales were flat on a same-store basis, compared with one year ago, at $7.8 billion. The group stated that concerns from the economic fallout of the March 11 earthquake and tsunami were easing slightly.





Kingold 2Q Profit +95%

Kingold Jewelry Inc. increased its fiscal-year guidance to a range of $800 million and $850 million from earlier guidance of $720 million and $780 million. The manufacturer, which operates in China, reported second-quarter revenue rose 134% to $252.1 million and profit increased 95% to $8.79 million.





Tough Conditions Impact Arjav Rough Auction

Tight liquidity in India and high rough diamond prices impacted sales at the second online rough auction hosted by Arjav Diamonds (India). The company reported that it sold only 27 out of 60 lots offered, with sizes ranging from 5 carats to larger than 100 carats. The largest stone sold weighed 132 carats.









GENERAL


Rothschild Dies at 86

Gerald Rothschild passed away at the age of 86 in Germany. Industry groups celebrated Rothschild's contributions to the industry, which he was part of for more than six decades. Rothschild started his business in the 1940s and served for many years as a senior executive at I. Hennig & Co., including a lengthy stint as managing director. He left the organization in 1989, but then returned to the industry at the age of 70, in 1995, when he set up his own brokerage house. Soon afterward, his company was successful in obtaining one of the first Diamond Trading Company (DTC) sights for the developing diamond industry in China.





Wessel Joins Lazare Kaplan

David Wessel joined Lazare Kaplan International as director of jewelry. Wessel's professional background includes experience in operations, manufacturing, sales forecasting, inventory control, production and training.





JA Elects Gleim as Chair

Jewelers of America (JA) elected Georgie Gleim, the president of Gleim The Jeweler in Palo Alto, California, as its new board chair succeeding Terry Burman. Gleim is a third-generation jeweler and her father, Arthur, served as JA president from 1981 to 1983. As board chair, Gleim will lead an executive committee created with newly elected officers. View the list of board members. www.jewelers.org/aboutJA/board.html.





CJA Appoints Knight as Chair

The Canadian Jewellers Association (CJA) appointed Chris Knight as its chairman for the 2011 and 2012 cycle. Knight is a founding partner of Platinum Unlimited and serves as its director of commercial activities, including marketing, sales and business development. Knight is involved in charity work and started the Volunteer Builders organization 10 years ago, which constructs buildings for charitable children’s camps.





AnchorCert Launches Carat Weight App

The AnchorCert Gemstone Certification Service has launched a Gemstone Carat Weight Estimator app for smart phones. AnchorCert stated that with just a couple of clicks, the app can easily calculate the estimated carat weight of diamonds and gemstones from measurements. The free demo version, which is currently available for Android phones, shows how to use the app and offers all functions for a small sample of stones and shapes.





Diamond Promo Center to Open in Yellowknife

Crossworks Manufacturing Ltd. is creating a "Diamond Promotion Centre" in the city of Yellowknife, Canada. The Centre will provide a venue where the public can follow the diamond journey along -- from point of exploration and discovery to where diamonds eventually land, with the consumer. Exhibits at the Centre will show key elements of the diamond journey, from early stage core samples to kimberlite, and from the process of planning how a diamond will be cut to the end result. The Centre will also have polishing demonstrations by members of the Crossworks Manufacturing team. The Diamond Promotion Centre is targeted to open in the second week of January 2012, adding a new facet to the aurora borealis viewing season.





Facebook Ads Zip Code Options

Facebook added a zip code target feature for its U.S. advertisers as part of the self-service tools: Power Editor and the Ads Manager. Now, when advertisers create a Facebook campaign, they’ll see the zip code option under location targeting. They can then enter one or more zip code to display ads to users in that location. Previously, advertisers could only target their ads to cities or other geographic-specific regions.





Sarin 2Q Profits +8%

Sarin Technologies reported that revenues grew 9% year on year to $15.6 million in the second quarter that ended on June 30. Group profits increased 8% to $5 million. The company noted that diamond jewelry demand in China and India is expected to grow by more than 20% this year, which will continue to drive global diamond demand and rough and polished prices.









STATS


Israel

Figures rounded July $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $714 57% $4,770 37%
Polished imports NA NA
Net exports NA NA

Rough imports NA NA
Rough exports $351 45% $2,620 40%
Net imports NA NA

Net diamond account -$81 $941 7%






Hong Kong

Figures are rounded 2Q $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $4,500 37% $8,490 36%
Polished exports $3,300 44% $6,500 46%
Net imports $1,200 21% $1,960 9%

Rough imports $686 100% $976 71%
Rough exports $497 57% $794 50%
Net imports $189 $182

Net diamond account $1,040 2% $1,780 2%






Botswana

2Q $Mil. %Chng. YTD $Mil. %Chng.
Rough diamond exports $1,400 97% $2,530 72%










MINING


Rockwell 1Q Loss Widens

Rockwell Diamonds reported revenue for its first quarter of fiscal year 2012 rose slightly to $8.5 million and cost of sales jumped 34% year on year to $8 million for the three months that ended on May 31. Rockwell recorded a loss of $1.2 million, up from a loss of $858,517 one year ago. But the midtier mining company reduced its general administration expenses 19% to $1.8 million. Rockwell reported that accumulated losses as of May 31, were $53.6 million, with current assets exceeding liabilities by $4.9 million and total assets exceeding liabilities by $86 million.

Production during the first fiscal quarter fell 40% to 4,428 carats and along with limited inventories, these factors limited revenue growth. Rockwell sold 4,779 carats of rough in the quarter, representing a decrease of 3%, although price per carat rose to $1,631 from about $1,010 one year ago.





Lucara Extends AK6 Date

An industrial action across South Africa, during the first two weeks in July, affected steel fabricators and several mechanical and electrical contractors among others, causing indirect construction delays at Lucara Diamond Corporation's AK6 diamond mine in Botswana. While construction at AK6 has resumed now, the company confirmed today that its scheduled operational handover from its contractors will be pushed ahead two months to February 16, 2012. The company also had to schedule for the year-end holiday period across the region, which generally runs for one month beginning in mid-December. The AK6 construction project is about 66 percent complete, according to Lucara.





Petra Acquisition of Finsch Nears a Close

South Africa gave its consent for De Beers to transfer the Finsch diamond mining rights to Petra Diamonds' subsidiary, Afropean Diamonds Ltd. Petra Diamonds agreed to acquire Finsch from De Beers in January for about $200 million through Afropean. The only remaining condition now is for Petra to register the transfer and that is expected to happen shortly. Upon meeting that condition, Petra Diamonds will publish a Finsch mine resource statement.









ECONWATCH


For the week ending Aug. 18

Inflation and weak consumer spending is giving stock traders a sour stomach. U.S. retailers took another hit as the market plunged: Birks & Mayors (-16%), Blue Nile (-9%), JCPenney (-11%), Movado Group (-12%), Saks (-10%), Tiffany (-13%), were just some of the bigger losers this week. Walmart was up though. Indian firms experienced heavy losses across the board. Mining stocks were mixed with some of the larger losses coming from Rockwell Diamonds (-14%) and Gemfields (-16%), but True North jumped 17% and Mwana Africa was up 19%. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.


Aug. 18 Aug. 11 Chng.
$1 = Euro 0.697 0.704 -0.007
$1 = Rupee 45.92 45.15 0.8
$1 = Israel Shekel 3.56 3.54 0.02
$1 = Rand 7.20 7.21 -0.01
$1 = Canadian Dollar 0.98 0.99 -0.01

Precious Metals
Gold $1,823.80 $1,756.80 $67.00
Platinum $1,842.00 $1,784.00 $58.00

Stock Indexes Chng.
BSE 16,469.79 17,059.40 -589.61 -3.5%
Dow Jones 10,990.58 11,143.31 -152.73 -1.4%
FTSE 5,092.23 5,168.24 -76.01 -1.5%
Hang Seng 20,016.27 19,595.14 421.13 2.1%
S&P 500 1,140.65 1,172.65 -32.00 -2.7%
Yahoo! Jewelry 961.73 988.88 -27.15 -2.7%
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Rapaport Weekly Market Comment September 2, 2011


Trading slow with buyers avoiding large purchases as diamond markets seek stable price levels. Rough continues to fall in dealer markets with elimination of premiums and some discounting of mining company prices. ALROSA sells $23M at Aug. tenders (90% by volume) with prices +5% over regular selling list. Large jewelers report strong growth in latest quarter: Tiffany sales +31% to $873M, profits +33% to $90M; Signet sales +11% to $798M, profits +71% to $66M; Zale sales +9% to $377M, loss of $33M vs. $29M a year ago. Best wishes “Michhami Dukkadam” to our Indian friends and “Eid Mubarak” to our Arab friends. Human Rights Watch reports ongoing abuse in Marange fields. Buyers Beware.


RapNet Data: Sept. 1

Diamonds 743,511
Value $5,319,310,363
Carats 831,688
Average Discount -24.82%





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RAPAPORT ANNOUNCEMENTS


September
4-9
Sun-Fri

Rapaport Single Stone Auction
Israel & New York

email: auctions@rapaport.com

September
12
Mon
Rapaport Int'l Diamond Conference 2011
The Times Center
242 W. 41st., New York
9:00 a.m. - 5 p.m.

JOIN US AND gain important tools and insights into:
•The Market for Luxury Jewelry
•Diamonds and Social Responsibility – Real Solutions to Real Problems

Free and open to all.
Register now. Seating is limited.



September
13-19
Tue-Mon

Rapaport Melee Auction
Hong Kong

email: auctions@rapaport.com





QUOTE OF THE WEEK:
The Great Recession taught consumers how to juggle their spending in hard times. Shoppers have learned to be resilient. They have lowered their aspirations. The excess may be gone, but the fun and pleasure of shopping is still there. Retail sales are holding.

Candace Corlette | WSL Strategic Retail






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


HRW Finds Marange Abuse, KP Reacts

Human Rights Watch (HRW) holds evidence that police and private security guards employed by mining companies in the Marange diamond fields of Zimbabwe are shooting, beating and unleashing attack dogs on poor, local unlicensed miners. HRW interviewed 10 miners in Mutare and towns close to the Marange diamond fields who had suffered from beatings and attacks. During patrols, police would also fire on the miners.

The BBC also aired a program recently, claiming that there were torture camps located in the diamond fields. In response to that program, the Kimberley Process (KP) chairman, Matthieu Yamba, said it was seeking clarification from Zimbabwe regarding these allegations of ongoing torture carried out in the Marange fields.

Partnership Africa Canada (PAC) and HRW concluded that financial institutions involved with the mine must undertake an audit of their investment in Zimbabwean banks that are facilitating diamond transactions to determine if they breach IFC commitments. If an audit determines a breach, financial institutions should use their shareholder influence to stop illicit diamond related transactions and or disinvest.





ALROSA Tenders Net $23M

ALROSA raised $22.5 million from its rough diamond tenders this week in Moscow, Hong Kong and Tel Aviv. The mining giant sold 90% of the goods on offer and reported that prices exceeded ALROSA’s current selling prices by more than 5%. The tenders indicated a strong demand potential for almost all categories of rough diamonds, prices were stabilized following an "insignificant price correction" for some categories, according to ALROSA.









RETAIL & WHOLESALE


Rapaport Weekly News Broadcast

WATCH NOW: See how quarterly results compared at Zale, Tiffany and Signet -- all in one shot. Additionally, U.S. consumer confidence dropped substantially in August as politics, a seemingly forever weak job market, and inflationary pressures place shoppers in a foul mood.





Tiffany Profits +33%

Tiffany & Co. reported that second-quarter revenue rose 30.5% year on year to $872.7 million, while cost of sales increased by 27% to $358 million, for the three months that ended on July 31. Same-store sales rose 22%. Net earnings jumped 32.5% to $90 million.

By region, Tiffany & Co. reported a 25% year on year increase in sales for the Americas at $438.2 million and that comparable-store sales rose 23%. Sales from the New York flagship store, specifically, increased 41% in large part due to strong foreign tourist demand. In the Asia-Pacific region, sales increased 55% to $173.2 million, while on a constant-exchange-rate basis, sales increased 45%. Tiffany & Co. reported growth in most countries with the largest increase in the greater China region. In Japan, sales rose 21% to $142.5 million, but on a constant-exchange-rate basis, total sales increased 8%. Tiffany & Co. sales across Europe increased 32% to $101.3 million, but on a constant-exchange-rate basis, sales increased 17%.





Zale's Net Loss Widens

Zale's fourth quarter sales rose 9.4% year on year to $377.3 million for the three months that ended on July 31. Same-store sales rose 9.8% and at a constant exchange rate with Canada, comparable store sales rose 8.5%. Zale reported a net loss of $32.6 million, which was up from $28.5 million one year ago, and that translated into a net loss per share of $1.02. Cost of sales during the quarter rose 12.6% to $183.8 million and gross margin as a percentage of revenue declined to 51.3% from 52.7% one year ago. Inventory on July 31, was recorded at $721 million, which was up from $703 million one year ago. Zale held outstanding debt of $395 million, compared with $296 million on July 31, 2010.





LJ Intl. Profit +67%

LJ International reported that second-quarter revenue rose 26% year on year to $41.6 million and cost of goods sold rose only by 5% to $20.9 million for the three months that ended on June 30. Retail revenue from the ENZO jewelry chain in China surged 70% to $28.4 million and comparable-store sales jumped 61%. Wholesale revenue fell 19% to $13.2 million with U.S. sales plunging by 26% year on year and revenue from Europe falling 6%. Wholesale revenue from the company's territory across the Asian continent rose 49%. Company profit rose 67% to $3.85 million or 10-cents per diluted share.





Damiani Loss Narrows

Damiani S.p.A. reported a 24% revenue increase in first-fiscal quarter to about $48 million through June 30 and cost of sales rose 18% to about $49 million. The company recorded a loss of $3.2 million, which was a 50% improvement from one year ago. The brand narrowed its net debt during the period by EUR 2 million to EUR 26.8 million, or $38.7 million, as of June 30.





Charles & Colvard Launch Moissanite.com

Moissanite creator Charles & Colvard Ltd. launched its e-commerce channel, Moissanite.com, where shoppers may now purchase loose stones, rings, pendants, bracelets and earrings. Moissanite.com is using a commerce software platform from Magento Inc., and offers consumer information on how silicon carbide crystals are grown, faceted and polished.





Unique Settings Preps 2011 Catalog

Unique Settings of New York is set to release their new 2011 catalog, which includes more than 350 new ring styles and builds upon the success of the company's November 2010 catalog for bridal jewelry. Unique Settings added new halo petite engagement ring sets, wedding bands and lightweight wedding bands, in addition to its collection of solitaire engagement rings, wedding bands and petite collections. The company is expecting the new catalog to help boost sales by 10% for the final quarter of 2011.





Amazon Launches NYC Local Site

Amazon.com launched its www.amazonlocal.com concept for New York City. This local online marketplace provides discounts of at least 50% and will provide unique deals from Amazon-affiliated websites, including Amazon.com, MYHABIT.com and endless.com. In the coming weeks, New York City customers in downtown, midtown, uptown and Brooklyn will see additional deals and in the months ahead, AmazonLocal is also introducing unique offerings from Amazon-affiliated websites, including discounts on jewelry and watches.





Survey Finds Average Ring Spending Drops

According to The Knot's engagement and jewelry survey, the average engagement ring center stone size was 1-carat, with an average of 1.40 total carat weight of diamonds, and the average price tag was $5,200, which was $600 lower than survey results from 2008. For the engagement ring diamond, 53% of grooms preferred the round cut, while 30% bought a princess cut. The survey found that average price spent on a luxury engagement ring was $13,500 and this often held a center stone of 1.5-carat, on average, but 2.0 total carat weight of diamonds.





Sahar Seeks to Ease Liquidity Crunch

Yair Sahar, the president of the Israel Diamond Exchange (IDE), pledged to work with the banks to increase the credit to the industry as the liquidity crunch continue to weigh on the diamond cutting sector. IDE, together with the Israel Diamond Manufacturers Association (IsDMA), is setting up a think-tank to examine ways to increase industry credit.

Sahar expressed confidence that the market will stabilize as expectations for Diwali celebrations, which begin on October 26, Christmas and then the Chinese New Year in February remain positive. He noted that rough producers have pledged not to increase their prices in the near future and stressed that the recent 20% price reduction seen at the BHP Billiton tender was a technical correction from the irrational price increases previously seen at the tender. Sahar noted too that a softening of prices is being witnessed through a drop in premiums across the secondary market, which is being fueled by the apparent lack of liquidity to buy rough.









GENERAL


Banking Operations Begin at BDB

IndusInd Bank inaugurated the first banking operation at the Bharat Diamond Bourse (BDB). The BDB is a well-guarded facility in the Bandra-Kurla Complex in suburban Mumbai, where about 15 to 20 companies are already operating from the new diamond center. Mehul Shah, vice president of BDB, stated that several other banks including Axis Bank, Corporation Bank and State Bank of India are in the process of starting their operations at the bourse in the coming weeks.





The Great Debate Runs Sept. 5

The Birmingham Assay Office, in partnership with International Jewellery London (IJL), will host the fifth "Great Debate," on September 5 at the Earls Court Exhibition Centre in the Inspiration Theatre from 11:15 a.m. to 12:30 p.m. Featured debaters include designer Stephen Webster, who will also discuss his personal involvement with Fairtrade & Fairmined Gold; Gaetano Cavalieri, the president of CIBJO, who will talk about the group's Corporate Social Responsibility Centre of Excellence in Antwerp; and Catherine Sproule, the director of the Responsible Jewellery Council (RJC) who will profile some companies that have now achieved accreditation to RJC's exacting standards.





Forevermark U.S. Adds Three Reps

Forevermark U.S. named Bruce Lake as the director of sales for the western region, John Salvin as the regional sales manager for the northeast and Michael Rousso as regional sales manager for the southeast. Forevermark will officially launch into the U.S. during the fourth quarter of 2011 through Forevermark diamantaire partners.





Gilad Tache Dies in Accident

Gilad Tache, 18, was killed in an automobile accident in Antwerp on Tuesday night. Nieuwsblad news reports that Tache was alone in his Audi when it struck a guardrail and that he died at the scene. He had just returned from a farewell party at a nightclub where he and some friends were celebrating.

The Rapaport Group mourns the untimely passing of this kind and sensitive young man and wishes the Tache family solace and comfort.









MINING


Gem Discovers 553ct. Diamond

Gem Diamonds recovered a 553-carat, D, type II diamond from the Letöeng mine in Lesotho. The diamond is undergoing analysis in Antwerp. The stone is the fourth historic diamond recovered from the Letöeng mine in recent years, following the recovery of the 603-carat "Lesotho Promise," the 493-carat "Letöeng Legacy" and the 478 carat "Light of Letöeng."





Namakwa Alters Strategy

Namakwa Diamonds Limited said that a $30 million credit facility was no longer available, however, the company is negotiating with the funding provider and is actively seeking alternative funding sources. In an operational review, Namakwa stated that its phase one operations at the Kao kimberlite mine in Lesotho remains within budget and is scheduled to commence in mid-October. But Namakwa has now decided to sell its entire portfolio in the Democratic Republic of the Congo to a group comprising in-country management. For the company's operations in the North West Province of South Africa, the board decided to redefine its course and is considering moving away from an owner operator model to a contractor model.

Namakwa will reorganize its ''Trading & Beneficiation Division'' into an international marketing and distribution platform for the company's diamonds. The change requires Namakwa to wrap-up trading joint ventures, and this includes $17 million charge with respect to capital invested by Jarvirne Limited.

The board of directors was reorganized and Nico Kruger has stepped down from his role as chief executive officer (CEO), and will be replaced by Richard Collocott who was previously the chief financial officer for Namakwa. Those changes followed the resignation of board chairman Hans Smith and audit, risk committee chair Dirk van Staden earlier this month. The company is actively pursuing the appointment of a new chairman of the board and independent chairman of the audit, risk and compliance committee. Namakwa's board now consists of Edward Haslam, Alex Davidson, Martiens Mulder, Tom Kruger and Collocott.





Lucara Shares Move to TSX Main Board

Lucara Diamond Corporation commenced trading on the main board of the Toronto Stock Exchange (TSX).; The company's trading symbol "LUC" was delisted from the TSX Venture Exchange. William Lamb, Lucara Diamond's president, explained that the junior minerís graduation to the TSX is a reflection of the company's growth and its accomplishments to date.









ECONWATCH


For the week ending Sept. 1

Retail stocks appeared more stable this week after a month-long selloff. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.


Sept. 1 Aug. 25 Chng.
$1 = Euro 0.700 0.690 0.010
$1 = Rupee 45.85 46.07 -0.2
$1 = Israel Shekel 3.57 3.62 -0.05
$1 = Rand 6.99 7.23 -0.24
$1 = Canadian Dollar 0.97 0.99 -0.02

Precious Metals
Gold $1,827.20 $1,769.40 $57.80
Platinum $1,849.00 $1,817.00 $32.00

Stock Indexes Chng.
BSE 16,676.75 16,146.33 530.42 3.3%
Dow Jones 11,537.39 11,149.82 387.57 3.5%
FTSE 5,418.65 5,131.10 287.55 5.6%
Hang Seng 20,585.33 19,752.48 832.85 4.2%
S&P 500 1,209.16 1,159.27 49.89 4.3%
Yahoo! Jewelry 1,046.85 1,006.38 40.47 4.0%
_______________
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Industry Retail EconWatch India Mining General




Rapaport Weekly Market Comment September 9, 2011


Diamond markets quiet due to price uncertainties with some suppliers offering goods at low prices. Market waiting for Hong Kong show amid hopes that Far East demand will improve industry sentiment and stabilize prices. One carat RapNet Diamond Index (RAPI) falls 4% to 103.91 in August. Rough trading weak. ALROSA sales +23% to $3.2B in first eight months of 2011. Harry Winston 2Q group sales +45% to $222M, net profit -23% to $10M. U.S. July polished imports +25% to $2.06B, polished exports +20% to $1.42B. Volatile gold sets new record ($1,922.20/oz).


RapNet Data: Sept. 8

Diamonds 695,687
Value $4,952,148,978
Carats 782,172
Average Discount -25.66%





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RAPAPORT ANNOUNCEMENTS


September
12
Mon
Rapaport Int'l Diamond Conference 2011
The Times Center
242 W. 41st., New York
9:00 a.m. - 5 p.m.

JOIN US AND gain important tools and insights into:
•The Market for Luxury Jewelry
•Diamonds and Social Responsibility – Real Solutions to Real Problems

Free and open to all.
Register now. Seating is limited.



September
13-19
Tue-Mon

Rapaport Melee Auction
Hong Kong

email: auctions@rapaport.com


September
21
Wed
State of the Diamond Industry
Martin Rapaport presentation at the Hong Kong Jewellery & Gem Fair
2:30 p.m.
Room 201 A&B - Level 2
Asia-World Expo

Register Now




September
19-23
Mon-Fri
Rapaport at Hong Kong Gem Fair
AsiaWorld-Expo, Hong Kong
Rapaport Booth: AWE 7K32, L32, L33

Find diamonds and companies with the
RapNet Show Listings service





QUOTE OF THE WEEK:
Don't blame S&P for the U.S. downgrade, fix the problem with urgency. It will only get worse with time. Both [Democrats and Republicans in Washington D.C.] are right, and wrong. The government needs to increase revenue and reduce costs, including entitlement and military, without discouraging investment or sacrificing competitiveness. This is not easy, but it is possible.

Tom Albanese | CEO, Rio Tinto






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


RapNet Diamond Index (RAPI) Falls in August

Certified polished diamond prices fell in August as cautious buyers reacted to economic uncertainty and Indian suppliers faced tight liquidity. While trading is generally quiet during the summer months, dealers and retailers also delayed making large purchases while prices declined. The RapNet Diamond Index (RAPIô) for 1.00 ct. diamonds fell 4% in August to 103.91. The 0.50 ct. category declined by 2.2% to 38.24 and 3.00 ct. dropped 5.4% to 371.58.

Rough trading in the dealer market was slow as Indian diamond cutters face liquidity issues. Premiums on mining company prices fell to near-zero with some goods selling at a discount. De Beers increased prices for some items, while BHP Billitonís spot tender prices fell by 15% to 20%.

Read a detailed account of August trends in ''Tentative Trading, Seeking Stability.''





Harry Winston Sales +45%, Profits -23% in 2Q

Harry Winston Diamond Corporation reported sales rose 45% year on year to $222.4 million in the second quarter that ended on July 31, driven by higher retail demand and strong rough diamond prices. However, due to higher costs and expenses, profits fell 23% to $10 million during the quarter.

The company's retail sales rose 98% to $132.8 million, with U.S. sales up 48% to $29.1 million and European sales increasing by about 25% to $30.8 million. Sales in Asia jumped 223% to $72.9 million. Earnings from the retail division rose 84% to $10.1 million.

Sales from the company's mining unit, consisting of a 40% share in the Diavik mine, increased 3% to $89.6 million as a 41% rise in rough diamond prices was offset by a 27% fall in volume of carats sold. The company sold 570,000 carats during the quarter compared with 780,000 carats in the same period of 2010, while its share of Diavik production increased 11% to 720,000. The mining segmentís earnings fell 23% to $33.7 million.

Harry Winston also entered into an option agreement with North Arrow Minerals Inc. and Springbok Holdings Inc. for the development of the Lac de Gras properties in the Northwest Territories. The Lac de Gras property covers 226,000 acres and is contiguous with property held by North Arrow that covers more than 81,000 acres.









RETAIL & WHOLESALE


Movado Group Recovers a Profit in 2Q

The Movado Group reported a 33% year on year increase in second-quarter revenue for fiscal-year 2012 at $113.2 million and the cost of sales rose 28% to $52.3 million for the three months that ended on July 31. Movado posted profit of $4.4 million compared with a loss of nearly $21 million one year ago. Gross profit rose to 53.8% of sales, compared with 52% one year ago. The increase was primarily the result of leverage on certain fixed costs as well as a favorable shift in channel and product mix.








Diamonds, Jewelry Rank High in eBay's Asian Trade

Online retailers from across Asia reported good business through eBay in the group's ''Asian Exporters' Index'' report. The category for jewelry gems and watches ranked second --just behind clothing-- as the most popular item purchased across the continent. Other top categories included photo, computers, cell phones and accessories, auto parts and toys. While the market is dominated by China and Hong Kong, India as a whole presented the story of "exuberant growth," according to the study's authors. Product sales from India were driven mainly by artisans and small-scale manufacturers, in which eBay opened the world to their shops. Top selling products from India included jewelry, particularly diamonds, followed by photographic equipment, clothing and collectibles such as coins, stamps, Bollywood posters and LP records.





SRK and Kiran Move into Bharat Diamond Bourse

Shree Ramkrishna Export (SRK) and Kiran Gems Private Ltd. opened their new offices at the Bharat Diamond Bourse (BDB) in Mumbai. The SRK offices, which are located in east wing of the eight tower complex, are equipped with advanced facilities and latest technology in addition to a high-tech security system. Likewise, the Kiran offices, situated in the Bandra-Kurla Complex (BKC), house more than 100 professionals across all major functions such as sales and marketing, finance, IT, human resources and administration.





Christie's Sets Date for Elizabeth Taylor's Sale

Christie's announced the first events of a planned four-day series of sales devoted to the jewelry sale of Elizabeth Taylor. Christie's New York will host an evening sale on December 13, featuring 80 of Taylor's jewels before holding two-day sale of 189 of the starís jewels on December 14. The total selection of 269 magnificent jewels from the collection being sold by Christie's in December is estimated to achieve well in excess of $30 million.





Mouawad Launches Fashion Jewelry Website

Glamhouse creator and renowned, fourth-generation jeweler Pascal Mouawad launched www.glamhouse.com as an online destination for shoppers to find fashion jewelry created by celebrities, stylists and fashion designers. There are five collections currently housed under the Glamhouse umbrella: House of Harlow 1960, designed by Nicole Richie; Low Luv x Erin Wasson; Kim Kardashian's Belle Noel; Rachel Leigh and the forthcoming A.L.C. by Andrea Lieberman.





AVON Introduces 'Indian Diva' Jewelry Collection

AVON India launched its ''Indian Diva'' jewelry collection in Delhi this past week, during the finale of its fashion tour 2011. The line offers rings, earrings, bracelets and necklaces and features the look of high-end jewelry, but with lower price points.





Rapaport Weekly News Broadcast

Watch Now: The Hay Group, IBM Coremetrics and the National Retail Federation offer benchmarks for retailers as they prepare their ecommerce channels for Christmas season sales. Check on ways to improve carting and add-on sales, and embrace mobile shopping before the rush begins.





43.51ct. Yellow Diamond Fetches Almost $3M

The U.S. Marshals Service for the Northern District of Ohio auctioned a 43.51-carat, fancy-intense, internally flawless, yellow diamond through Bid4Assets.com and the winning bid was $2,843,623 or about $65,355 per carat. The Gemological Institute of America (GIA) graded the diamond on June 8, 2011 (GIA report 15154097). According to the auction's webpage, bidding went overtime, but closed at 3:15 p.m. EDT today. This diamond's mine source was not determined and there were no U.N. sanctions or Kimberley Process claims against the stone, according to Bid4Assets.









GENERAL


Antwerp Diamond Trade Fair to be Held in January

The Antwerp Diamond Bourse, the Diamantclub of Antwerp and the Antwerp World Diamond Centre (AWDC) announced the dates for their third edition of the Antwerp Diamond Trade Fair. This invitation-only event will be held January 29 through January 31. Since the program's inception in 2010, the number of exhibitors has doubled to 66, and next year, organizers will extend invitations to jewelry manufacturers and retailers from across Asia and North America, as well as Europe.





GJEPC to Hold IIJS in January

The Gem & Jewellery Export Promotion Council (GJEPC) will hold its next IIJS Signature Show from January 6 to 9, at the NSE Grounds, Goregaon East in Mumbai. GJEPC stated that IIJS Signature 2012 participants include manufacturers, wholesalers, retailers, importers and exporters from all sectors of the jewelry industry worldwide.









STATS


India

Figures rounded July $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,922 14% $17,585 41%
Polished imports $1,429 29% $14,203 85%
Net exports $493 $3,382

Rough imports $1,886 100% $9,485 42%
Rough exports $124 96% $895 70%
Net imports $1,762 $8,590

Net diamond account ($1,269) ($5,208)










MINING


ALROSA's Sales +23%

ALROSA sold approximately $3.15 billion worth of rough and polished goods during the first eight months of 2011, compared with $2.57 billion in the first eight months of 2010. ALROSA reported sales of $2.16 billion at the close of its first-half on June 30, 2011. During a working meeting with executives on September 5, when the updated figures were discussed, company president Fyodor Andreev maintained ALROSA's sales outlook of $5 billion for this calendar year. He also noted "a certain price correction in some assortment categories, primarily due to a sharp reduction of speculative pressure on the market.î





Rockwell to Install High-Throughput Tech at Saxendrift

Rockwell Diamonds approved a capital investment of about $1.5 million to install high-throughput X-ray technology at its Saxendrift operations. Currently, the plant is using traditional pan-plant technology. Rockwell anticipates that the new technology will be more efficient in recovering rough diamonds. The new technology can identify type II diamonds. Rockwell will install one high-throughput Bourevestnik (BV) sorter and one BV single particle sorter for the concentration and final sorting of diamond bearing ore at Saxendrift.





Namakwa Secures Credit Facility

Namakwa Diamonds will be able to tap a $40 million, two-year secured loan facility with Jarvirne, with first drawdown of $5 million being available on September 9. Funds will support the kimberlite mining project at Kao in Lesotho. Namakwa will issue 11 million shares to Jarvirne and shareholders will vote to authorize an additional 50,750,000 shares in October. Once approved, Jarvirne will boost its stake in the company to 81,891,438 ordinary shares, representing 28.45% of the then enlarged issued share capital. Jarvirne appointed two non-executive directors to the board as part of the deal.









ECONWATCH


For the week ending Sept. 8

Spot gold set a record of $1,922.20oz. during the early morning hours in New York on September 6. At the record price, gold was up 51% year on year and trading 13% higher from 30 days earlier. Following early highs, gold, silver and platinum experienced a broad selloff, but bounced back as the week progressed. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.


Sept. 8 Sept. 1 Chng.
$1 = Euro 0.720 0.700 0.020
$1 = Rupee 46.26 45.72 0.5
$1 = Israel Shekel 3.70 3.57 0.13
$1 = Rand 7.17 7.00 0.17
$1 = Canadian Dollar 0.98 0.98 0.00

Precious Metals
Gold $1,865.90 $1,827.20 $38.70
Platinum $1,860.00 $1,849.00 $11.00

Stock Indexes Chng.
BSE 17,165.54 16,676.75 488.79 2.9%
Dow Jones 11,295.81 11,493.57 -197.76 -1.7%
FTSE 5,340.38 5,418.65 -78.27 -1.4%
Hang Seng 19,912.82 20,585.33 -672.51 -3.3%
S&P 500 1,185.90 1,204.42 -18.52 -1.5%
Yahoo! Jewelry 1,061.77 1,046.76 15.01 1.4%
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Rapaport Weekly Market Comment October 19, 2011


Trading centers quiet over Jewish holidays with Indian markets cautious ahead of next week’s Diwali festival. Rio Tinto’s 3Q diamond production flat at 3.5M cts. ALROSA’s 1H sales +3% to $2.1B, profits rise five-fold to $841M. LVMH 3Q jewelry & watch sales +161% to $874M. Christie’s NY jewels sells $46.6M (83% sold by lot) with pear-shaped, 32.77-ct., fancy vivid yellow, VS2 diamond selling for $6.6M ($201,000/ct.). India’s Sept. polished exports +4% to $2.49B, rough imports -4% to $936M. U.S. Aug. polished imports +23% to $1.64B. RAPAPORT PRICE LIST WILL NOT BE PUBLISHED THIS WEEK DUE TO SUCCOT HOLIDAY. NEXT RAPAPORT PRICE LIST TO BE PUBLISHED ON OCT. 28. RAPNET PRICE LIST WILL BE PUBLISHED AND EMAILED OCT 24. WITH TRADESCREEN AVAILABLE ONLINE 24/7. We wish everyone a happy Diwali.


RapNet Data: Oct. 18

Diamonds 796,449
Value $5,235,620,092
Carats 857,493
Average Discount -25.84%





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RAPAPORT ANNOUNCEMENTS


November
7-11
Mon-Fri

Rapaport Melee Auction
New York

email: auctions@rapaport.com


November
7-15
Mon-Tue

Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com





QUOTE OF THE WEEK:
We have got a bifurcation that keeps getting bigger and bigger. Ten percent of the consumers account for 40% of the spending, [which is on the increase and making the ecomony seem stronger. But] 80% of consumers are in a depression, so the growing gap between the haves and have-nots is responsible for the Occupy Wall Street movement.

Howard Davidowitz | Davidowitz & Assoc.






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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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


Christie’s NY Auction Reflects Healthy Market

On the surface the Christie’s New York sale of Magnificent Jewels appeared to be a quiet day, however the numbers told another story. The sale garnered $46,599,650, with 83% sold by lot and 93% sold by dollar value. The presale estimate was $35 million to $40 million.

The top lot of the sale, pictured, was a 32.77-carat fancy vivid yellow diamond of VS2 clarity. It sold for $6,578,500 to a buyer who requested anonymity. Diamonds were selling very well with prices that dealers described as “healthy.” Colored diamonds were flying out the door as were white diamonds, perhaps due to the shortage of stones on the market, or demand due to the upcoming holiday gifting season. Privates and dealers were all active in the sale. In a slightly different spin from recent sales where prices went crazy and buyers snatched up anything, this sale saw strong prices that were within a reasonable range and somewhat more selective buying, Signed pieces by Tiffany & Co. sold well as did a selection of hard to find vintage 1970s Bulgari pieces.





ALROSA's Profits Surge

ALROSA reported net profit grew five-fold to $841 million in the first half of 2011. Sales increased 3% to $2.13 billion while cost of sales fell by 39% to $744 million. Revenues were comprised of 27% of goods that stayed in the domestic market, 47% that was exported to Belgium, 11% to India, 8% to Israel, and the remainder to other markets. The company’s diamond inventory was valued at $546 million at the end of the period, compared with $509 million six months earlier. Production rose 10T percent to 19.326 million carats, as previously reported. ALROSA’s reserves stood at 1.2 billion carats in 2010, which, the company stated, is sufficient to maintain current production levels for the next 32 years.





U.S. Inflation Soars

The consumer price index (CPI) for jewelry remained near record-highs in September, jumping 8% year on year to 176.78 points. The reading marked the ninth consecutive month with a total greater than 170 points. The jewelry CPI has now been above 150 points for 44 consecutive months. Meanwhile, the CPI for all product categories rose 3.9% year on year to a record 226.96 points.









RETAIL & WHOLESALE


LVMH 3Q Sales +18%

LVMH reported that company sales for all categories rose 18% year on year to $8.3 billion for the third fiscal quarter. Sales of jewelry and watches for the three months rose to $874 million from $335 million one year ago, helped in large part due to the Bulgari acquisition. Revenue for the jewelry and watch segment during the first nine months of fiscal 2011 rose 76% to $1.7 billion, and on a comparable basis the increase was 26%. The third quarter was also marked by the successful public offer for the outstanding minority shares in Bulgari.





ENZO Reports 91% Jump in Sales

LJ International Inc., parent company of the ENZO jewelry retail chain in China, recorded a 91% year on year jump in sales during that nation's "National Day Golden Week" festival. Comparable-store sales increased 53%. ENZO had 182 stores in operation for this year's festival, which was up from 128 stores one year ago. Golden Week took place during the first week of October.





U.S. Department Store Sales Flat in Sept.

U.S. department store sales were flat year on year in September at $13.7 billion on an unadjusted basis, according to U.S. government figures. Retail trade sales rose 8.1% year on year and total retail and food services sales, excluding motor vehicles, rose 7.6% to $315 billion. Preliminary retail sales data, which is one month behind, revealed that jewelry store sales rose 19.4% year on year in August to $2.23 billion. The government also revised its jewelry sales total lower for the month of July to $2 billion from $2.2 billion reported in the preliminary report. Meanwhile, jewelry inflation for the month of August rose 11%.





Confidence Weakens, Consumers Lose Faith

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 57.5 points in October, which was lower than expected and weaker than at any time during the Great Recession. Furthermore, the consumer outlook for the direction of the country fell to 47 points, or the lowest level since May 1980. With the average income down from one year ago, inflation topping 3%, and lack of political direction in the country, these combine to sour average consumer sentiment and keep wallets shut.

According to a Gallup poll, 80% of consumers believe the U.S. is in a recession, and none of 1,004 adults believed the economy ever even recovered from the Great Recession. Perhaps worse yet, only 1% believes the economy will have recovered from the Great Recession one year from now, while only 37% think the economy will ''show improvement'' without a full recovery. Of top issues facing the U.S., a poll conducted by Pew Research Center found that 43% of consumers cited the nation's lack of jobs as the greatest economic problem, followed by 22% who thought the budget deficit was a top issue and 17% saying inflation was the greatest threat.





Analyst Initiates 'Buy' for Tiffany

Sterne Agee analyst Margaret Whitfield initiated a "buy" rating for Tiffany & Co. with a $90 price target. Sterne Agee considered that engagement ring demand remains fairly "recession proof," and that consumers would continue to buy pricey engagement and wedding rings from the retailer even during a bad economy. Tiffany also sources high-quality diamonds and produces 60% of its item in-house. The analyst added that Tiffany is a "premier luxury" firm and has the potential to grow even where it has a lot of stores while it continues to expand in new markets.





Jewelers Must Capture Lost Market Share

Unity Marketing found that jewelers have been recently hit by a number of factors that have hurt the businesses. Rising product costs have pressured margins and given consumers reason to seek more affordable alternatives, such as new metals and faux gemstones. Consumers have also increasingly favored department stores, Internet websites, artisans and art galleries, TV shopping and discounters for new jewelry pieces. Furthermore, with a new ''value consciousness'' so pervasive in the post-Great Recession, today's jewelry consumer is finding ways to buy a new piece for a great price.

The average amount jewelry shoppers spent on their most recent piece of fine jewelry declined by nearly 60% from pre-recession 2007 when the average price was $734 to only $466 in the most recent survey. Jewelers must work harder and smarter to entice the customers to buy, using all the marketing tools available to them such as social media, local community events, and partnering with other local businesses such as bridal shops. The report also suggested that jewelers stock more items made from lower-price metals, semi-precious stones and materials that might previously have been considered as costume jewelry.





Hearts on Fire Drops Trademark Case

Hearts on Fire dropped the lawsuit it filed against De Beers Diamond Jewellers, according to court documents filed in the United States District Court in Massachusetts. The company initially filed a trademark action suit against De Beers in August, claiming that De Beers infringed on its "Sublime Symmetry trademark,” and contended that any resemblance of the mark used by De Beers would cause confusion with consumers.





Neiman Marcus' Christmas Book 2011

Neiman Marcus unveiled the 85th edition of its annual Christmas Book, which, aside from its usual selection of fantasy gifts, offered a number of jewelry collections. The Roberto Coin jewelry, for example, showcases a collection of heart, cross and solitaire necklaces featuring diamonds in 18-karat gold. In addition, Roberto Coin's colorful Fantasia Fireworks collection, which highlights the designer's use of amethyst orange sapphire, citrine, green topaz, peridot and diamonds, is available as well. Christmas Book 2011 also offers diamond and gold earrings from the David Yurman Starburst collection. Other diamond and gold jewelry includes necklaces, bracelets, earrings and bangles by Jose and Maria Barrera, Aurelie Bidermann, John Hardy, Marco Bicego and Ippolita.





Rajesh Exports to Open 25 Stores

Rajesh Exports Ltd. will open 25 new retail stores in the southern state of Karnataka on Monday on the occasion of Dhanteras, an auspicious day for gold purchases in India. The company, which sells its jewelry under the Shubh Jewellers brand in India, stated that the opening of new showrooms will take the total number of stores to 65 in Karnataka and a total of 73 stores across the country. Rajesh Exports said that it is looking forward to an aggressive retail expansion plan, which would be the main driver for the incremental profitability in the coming quarters. The company plans to establish 500 Shubh Jewellers stores across India by 2014.





L2 Assigns Tiffany & Co. a Digital IQ of Genius

Think tank L2’s Digital IQ index on the jewelry and watch segment assigned Tiffany & Co. a Digital IQ class of "Genius”— the only jewelry brand that achieved that accolade, out of the 35 measured. L2 researchers praised Tiffany & Co. for threading the "needle between brand building and e-commerce" with its website, and for using its microsite "What makes love true" to bring its brand magic to life.

Swarovski AG, was assigned second-best "Gifted" for experimenting and innovating across its website, mobile, and social platforms. All other brands required a lot of improvement for their digital competence, as defined by L2.

Less than half of the brands were purchasing their own brand keywords for search, few offered e-commerce and many failed to engage customers through social media. L2 suggested that linking to social media properties and incorporating product sharing features can provide tangible results, and the amount of traffic coming from and going to a brand site from social media properties significantly correlates with the group's Digital IQ.









STATS


U.S.A.

Aug. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,640 23% $14,990 27%
Polished exports $1,380 22% $12,180 35%
Net imports $258 25% $2,820 0%

Rough imports $31 0% $424 27%
Rough exports $14 -26% $291 62%
Net imports $17 42% $133 -13%

Net diamond account $241 24% $2,680 1%






India

Sept. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $2,490 4% $22,450 19%
Polished imports $1,340 -22% $17,110 36%
Net exports $1,150 70% $5,340

Rough imports $936 -4% $10,070 33%
Rough exports $147 48% $1,180 64%
Net imports $790 -10% $8,890

Net diamond account $361 ($3,550)






Israel

YTD* $Mil. %Chng.
Polished exports $5,830 37%
Polished imports $3,520 35%
Net exports $2,310 40%

Rough imports $3,520 35%
Rough exports $2,980 32%
Net imports $540 54%

Net diamond account $1,770 36%

*This table on Oct. 12 mistated YTD total as 3Q.









MINING


Rio Tinto's Diamond Production Flat in 3Q

Rio Tinto’s diamond production reached 3.534 million carats in the third quarter of 2011, in line with its output one year earlier. Production at Rio Tinto’s Argyle mine in Australia fell 5% to 2.302 million carats, while output at the Murowa mine in Zimbabwe, in which Rio Tinto owns a 78% stake, grew 71% to 72,000 carats. The company’s 60% share of production at the Diavik mine in Canada increased 8% to 1.160 million carats Total production at the Diavik mine increased to 1.9 million carats, with the mine expected to add another 1.8 million carats in the fourth quarter. During the first nine months of the year, Rio Tinto’s diamond production fell 18 percent to 8.766 million carats. The company expects its share of production to reach 13 million for the full year, which would be 6 percent below output in 2010.





Rockwell Diamonds 2Q Revenues -19%

Rockwell Diamonds reported that revenues fell 19% year on year to $9.2 million in its second fiscal quarter as lower inventories impacted sales. The company, however, turned a net profit of $2 million in the three months that ended August 31, compared with a loss of $7.1 million as it reduced costs and gained from exchange rate fluctuations. Rockwell sold 3,233 carats during the quarter for an average price of $2,186 per carat, representing a price increase of 109% from a year earlier. The company’s production fell 47% to 3,611 carats during the quarter due to its closure of the Holpan mine and production issues at Klipdam and Saxendrift.





Stellar Diamonds' Revenue -25%

Stellar Diamonds reported that revenue fell 25% year on year to $1.52 million for the fiscal period that ended on June 30. Stellar recorded an impairment charge of $8.6 million for its Bomboko project and a net loss of $14.9 million up from $5.6 million one year ago. During the fiscal period, the junior explorer raised $9.9 million in equity this past March and as of June it held $6.5 million in cash along with net assets of $21.1 million.









ECONWATCH


For the week ending Oct. 19

Most U.S. retail stocks were slightly higher this week, the exceptions were Birks & Mayors, Charles & Colvard, DGSE, Signet, Sotheby's, and Tiffany. European retailers were mainly lower and Indian firms were mixed ahead of Diwali. Diamond mining companies all registered declines except for Rockwell Diamonds, Mwana Africa and Stellar Diamonds. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.


Oct. 19 @ Noon Oct. 12 Chng.
$1 = Euro 0.726 0.726 0.000
$1 = Rupee 49.19 49.01 0.2
$1 = Israel Shekel 3.65 3.65 0.00
$1 = Rand 8.02 7.81 0.21
$1 = Canadian Dollar 1.01 1.01 0.00

Precious Metals
Gold $1,644.20 $1,675.10 -$30.90
Platinum $1,518.00 $1,539.00 -$21.00

Stock Indexes Chng.
BSE 17,085.34 16,958.39 126.95 0.7%
Dow Jones 11,592.68 11,533.69 58.99 0.5%
FTSE 5,450.49 5,441.80 8.69 0.2%
Hang Seng 18,309.22 18,329.46 -20.24 -0.1%
S&P 500 1,223.74 1,211.62 12.12 1.0%
Yahoo! Jewelry 1,032.82 1,034.53 -1.71 -0.2%
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RAPAPORT NEWS SERVICE | October 28, 2011


Industry Retail EconWatch Mining India General




Rapaport Weekly Market Comment October 28, 2011


Indian liquidity crisis remains difficult with significant increase in discount levels. Goods are available at prices 5-15% lower than two months ago with excellent buying opportunities for cash buyers. Trade and consumer confidence problematic. DTC expected to reduce rough supplies at next week’s sight as De Beers and Russians attempt to maintain a firm pricing policy. De Beers 3Q production +3% to 9.3M cts. Gem Diamonds sells 550-ct., D, type IIa, Letséng rough for $16.5M ($30,000/ct.). Strong Asian demand and higher prices at Argyle pink diamond tender. Signet to buy back $300M in shares. Titan Industries 2Q sales +37% to $421M, net profit +16% to $30M. We wish everyone a happy Diwali.


RapNet Data: Oct. 27

Diamonds 818,416
Value $5,408,636,202
Carats 805,983
Average Discount -26.44%





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RAPAPORT ANNOUNCEMENTS


November
7-16
Mon-Wed

Rapaport Melee Auction
New York & Hong Kong

email: auctions@rapaport.com


November
7-15
Mon-Tue

Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com





QUOTE OF THE WEEK:
The fourth quarter may see some pullback in U.S. economic growth, but the positive details underlying the GDP (+2.5% for third quarter) should help ease fears of a U.S. recession - somewhat.

Jennifer Lee | BMO Capital Markets






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


Gem Diamonds Sells 550-Ct. Letšeng Star

Gem Diamonds sold the 553-carat, D, type IIa, Letšeng Star rough diamond for $16.5 million, or $30,000 per carat, to an undisclosed third party. As part of the deal, Gem Diamonds’ Lesotho-based subsidiary, Letšeng Diamonds, will benefit from a “significant share” of the downstream polished margin resulting from the sale of the polished stone, which will be cut from the Letšeng Star.





Strong Demand at Argyle Pink Tender

Rio Tinto Diamonds closed its Argyle pink diamond tender this past week, reporting strong Asian demand and continued price appreciation for the rare gems. The collection of 55 stones mined at the Argyle mine in Australia were cut and polished in-house by Rio Tinto’s polishers in Western Australia. The collection included a record 11 heart-shaped stones, which generated strong interest, particularly from Australian and Asian bidders, according to Josephine Archer, the manager of Argyle Pink Diamonds. Rio Tinto reported that bidders in Japan found considerable success in the tender, including the acquisition of the Argyle Alanya, an oval-shaped, 1.06-carat, fancy vivid purplish-pink diamond.





Rapaport Weekly News Broadcast

Watch Now: Bain & Co. provides an optimistic outlook for the global fine-jewelry sector moving forward with expected sales growth at 15% this year, and the group expects Christmastime sales increases in the low-single digits. There are nuances for future trends as Asia remains a powerhouse and demands from male shoppers increase. The American Affluence Research Center, which tracks spending of wealthiest 11 million U.S. households, noted very negative sentiment with consumers and observed a decrease in average household Christmas spending plans this year. But as there are more wealthy shoppers entering the market, this will help boost overall holiday sales slightly in 2011.









RETAIL & WHOLESALE


Exhibitors Report Weak JA Special Delivery Show

Visitor traffic at the three-day JA New York Special Delivery Jewelry Show at the Javits Convention Center was tepid, leading to less than impressive sales for many exhibiting companies. Buyers appeared interested only in lower-end jewelry and small diamonds of H to J colors. Inexpensive bracelets, necklaces and beads made of precious stones were in greater demand than diamonds, gold and silver jewelry.





Titan's 2Q Profit +16% to $30M

Titan Industries Ltd. reported net sales rose 37% year on year to $420.6 million during its second fiscal-quarter that ended on September 30. Net profit grew 16% to $29.7 million Titan's jewelry sales increased by nearly 45% to $327.3 million while sales at its watch division rose 16% to $83.8 million .





Charles & Colvard 3Q Profits -79%

Charles & Colvard reported its third quarter sales dropped 4% to $2.9 million with loose moissanite stone sales falling 22% to $2.2 million. Finished jewelry sales, however, rose 303% to $682,000. Profit for the company plunged 79% to $110,000. Charles & Colvard held $9.4 million in cash and investments, $37 million in inventory and no debt at the end of its quarter.





Thangamayil 2Q Profit +165%

Thangamayil Jewellery Ltd. reported that its second-quarter net profit more than doubled year on year to about $4.5 million from $1.7 million. Growth was driven by higher sales, which rose 69% to $58.8 million for the three months that ended on September 30.





Signet Approves $300M Share Repurchase

Signet's board authorized a share repurchase program of $300 million and will come into effect from January 2012 and last for 24 months. The program will be funded through the company's existing cash balance and can be commenced or discontinued at any time without notice. The repurchased shares will be used for general corporate purposes.

Zacks Investment Research upgraded Signet from “neutral” to “outperform.” Shares were about 12 times forward estimates, which puts the PEG ratio at 1.0 price-to-sales is at 1.0 and the stock for 1.6 times book value.





Gitanjali Launches Jewelry Vending Machine

Gitanjali Group launched a gold and diamond automated teller machine (ATM), providing a one stop shop for consumers to buy medallions, coins and jewelry. The ATM will give the consumer a mix of up to 36 options in different sizes, price points and designs to choose from across these categories and the prices will range from INR 1,000 to INR 30,000 ($20 to $650). In the coming months, the company plans to expand the network of these ATMs in places with high consumer foot traffic such as premium malls, airports and temples to provide visitors with a range of last minute purchase choices for gifting and other needs.





Blue Nile Joins ShopRunner Network

Blue Nile joined the ShopRunner network to provide ShopRunner's members free FedEx overnight and return shipping on any Blue Nile purchase. An annual membership on ShopRunner is $79 and can be shared with up to four household members. Retail partners already include Reeds Jewelers, Lord & Taylor, Calvin Klein and many others and the website indicated that watchwear.com, ice.com, diamond.com would be "coming soon."





Online Video Ads Reach 50% Mark

Digital matrix firm comScore Inc. reported that September was the first time that video advertisements reached 50% of the U.S. population online. The number of online videos watched came to 40 billion and the total number of advertisements viewed by U.S. Internet users during the month was 6.8 billion, a 37% year on year increase. Hulu accounted for the largest share of those online advertisements, with around 1.02 billion ads, while Termor Video came in second with 811 million ads. Adap.tv ranked third with 803.4 million ads. All video ads viewed by U.S. Internet users accounted for 14.7 percent of total online videos for the month with the average online ad being 24 seconds. The firm also reported the average number of hours spent watching online video content surged 25.6% to 19.5 hours per viewer per month.





Ritchies Unveils 50-Ct. Diamond for Auction

Ritchies Auctioneers will offer more than 160 lots of fine jewelry for auction on November 13 including a 50.24-carat, VS1, brilliant-cut loose diamond appraised at $10 million. Additional items include an 18-carat, fancy yellow diamond appraised at $1 million, a 78-carat fancy yellow diamond necklace appraised at $600,000, a red ruby necklace appraised at more than $500,000, and a one of a kind Piaget watch appraised at $200,000.





Jewelry Exchange Launches 'Great Diamond Moments'

The Jewelry Exchange launched a new customer testimonial program: Great Diamond Moments. This campaign includes a series of television commercials, two minute interview clips, and the launch of a new webpage. Website visitors can view excerpts from interviews and leave feedback, or send their story for a chance to be the next featured stars of Great Diamond Moments.









GENERAL


ICBC, AWDC Sign Financing Framework

The Industrial Commercial Bank of China (ICBC) and Antwerp World Diamond Centre (AWDC) signed a Cooperation Framework Agreement for diamond financing. According to the agreement, ICBC will provide AWDC with financial services. Through its global network and advanced IT system, ICBC will provide various services to the Antwerp diamond companies, such as trade and product financing, global cash management, bank card acceptance, Chinese yuan-based international settlement, capital transaction and investment banking, etc.The AWDC will assist ICBC in entering the field of diamond financing and assist its Brussels branch to obtain the required location, the necessary professional technology, people, equipment and information to support the launch of ICBC’s diamond financing activities..





Paz Says Abide by KP's Core Principles

On the eve of the 2011 Plenary for the Kimberley Process Certification Scheme (KPCS), the president of the World Federation of Diamond Bourses (WFDB), Avi Paz, made a strong appeal to delegates to "live up to and abide by the organization's core principles."

"Our members are strongly committed to enforcing the requirements of the KPCS system, and we have never hesitated to remove from our ranks those traders who may have strayed. However, if our regulators give contradictory signals and individual countries adopt conflicting policies, it becomes increasingly difficult for our members to conduct our business in a most responsible manner," Paz stated.





GJEPC to Hold Indo-Euro Summit

The Gem & Jewellery Export Promotion Council (GJEPC) will hold the third edition of Indo-Euro Jewellery Summit from November 15 to 20, in Mumbai. The summit will include a series of high-level meetings between the top 20 European retailers and leading Indian jewelry manufacturers. GJEPC said that the summit will see participants from France, Germany, Poland and Eastern Europe as well as a major jewelry retail chain from South Africa. For the first time, the participants will also include wholesalers, TV jewelry channels and one of the leading luxury retailers from France









MINING


Botswana's Diamond Exports +52%

Botswana exported $529.6 million worth of diamonds in August 2011—an amount was 52% higher than one year ago, Rapaport records show. Exports during the first eight months of the year increased 88% to $3.7 billion.





De Beers 3Q Diamond Production +3%

De Beers rough diamond production rose 3% year on year to 9.305 million carats in the third quarter of 2011. The increase came due to higher productivity and variations in grade and despite industrial actions at operations in South Africa and Namibia. During the first nine months of the year, De Beers production increased 1.5% to 24.839 million carats. Production reached 32.997 million carats in the full year 2010.





Namakwa Diamonds Increases Loss

Namakwa Diamonds reported a net loss of $76.7 million. Revenues rose 14% to $93.3 million while cost of sales rose 19% to $95.2 million and expenses more than doubled to $44.5 million. Group production for the past year rose 55% to 128,191 carats.





Rockwell, Midamines Reach Settlement

An indirect subsidiary of Rockwell Diamonds agreed to pay $1.2 million to Midamines for royalty payments dating back to a 2006 agreement. The two have been in arbitration over what Midamines claimed to be a $41 million charge. Rockwell's board stated that it was disappointed at the outcome, having vigorously argued against the claims made by Midamines, but the settlement was a fraction of the total and the executive team can now focus on implementing its diamond value management initiatives.





Mountain Province Completes Airborne Survey

Mountain Province Diamonds completed its airborne gravity survey for Gahcho Kué, a joint venture project with De Beers Canada, and its fully-owned Kennady North Diamond Project. Fugro Airborne Surveys Corporation conducted the surveys and preliminary results are expected before the end of November 2011. Mountain Province also announced that the Gahcho Kué will expand the previously announced five-hole Tuzo Deep drill program to six holes.





De Beers Wins Top Sustainability Reporting Award

For the second year running, De Beers has been declared the overall winner in the ACCA South Africa Sustainability Reporting Awards for its Report to Society 2010. This is the fourth consecutive year that the Report to Society has been recognized by ACCA South Africa. Both the 2009 and 2010 Report to Society have won the first prize in the resources category, and won the Overall Winner, Best Sustainability Report. Announcing the award, ACCA noted that De Beers “remains unmatched” in explaining its approach to sustainability management and reporting.









ECONWATCH


For the week ending Oct. 27

The bulls returned to U.S. retail stocks with half those we cover rising by double-digit increases this past week. European retailers were higher, Indian diamond firms were mixed. Diamond mining companies were volatile, but mainly came out ahead. Read the extended stock report for major retailer and miner stocks from India, the U.S., and Europe.

Oct. 27 Oct. 19 Chng.
$1 = Euro 0.708 0.726 -0.018
$1 = Rupee 49.32 49.19 0.1
$1 = Israel Shekel 3.60 3.65 -0.05
$1 = Rand 7.71 8.02 -0.31
$1 = Canadian Dollar 0.99 1.01 -0.02

Precious Metals
Gold $1,743.10 $1,644.20 $98.90
Platinum $1,636.00 $1,518.00 $118.00

Stock Indexes Chng.
BSE 17,288.83 17,085.34 203.49 1.2%
Dow Jones 12,210.60 11,592.68 617.92 5.3%
FTSE 5,713.82 5,450.49 263.33 4.8%
Hang Seng 19,688.70 18,309.22 1,379.48 7.5%
S&P 500 1,284.57 1,223.74 60.83 5.0%
Yahoo! Jewelry 1,098.20 1,032.82 65.38 6.3%
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Rapaport Weekly Market Comment December 30, 2011


U.S. consumer confidence improves as retail sales expected to grow 4% in Dec. and comScore reports online sales +15% to $35B in Nov/Dec. Trading centers quiet as cutters uncertain that retailers will replenish inventories in 1Q. Cautious Far East demand ahead of January 23 Chinese New Year. Lazare Kaplan sues Antwerp Diamond Bank for alleged misappropriation of $135M. Japan’s Nov. polished imports +7% to $62M. Australia’s FY1Q diamond production -6% to 2.335M cts., rough exports -11% to $94M. The Rapaport Group wishes everyone a happy, healthy, prosperous and peaceful New Year.


RapNet Data: Dec. 29

Diamonds 818,324
Value $5,470,699,074
Carats 861,291
Average Discount -26.45%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS


Dec-Jan
26-3
Mon-Tue

Rapaport Melee Auction
Mumbai

email: auctions@rapaport.com


January
16-26
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com





QUOTE OF THE WEEK
[Sears] neglected this business for so long, I would expect more stores to close. They are letting Kmart and Sears die on the vine.

Brian Sozzi | Nothing But Gold Productions






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. To get on the fast track, email your resume to careers@rapaport.com.









RETAIL & WHOLESALE


Online Sales +15% to $35B

Online retail sales rose 15% year on year to $35.3 billion for the period of November 1 through December 26, according to metrics firm comScore Inc. The most recent week, which closed on December 25, experienced a 16 percent jump in online retail sales at $2.8 billion. The growth rate was in line with comScore's early season projections.







Sears to Close Stores

Sears will close as many as 120 of its Kmart and Sears locations and tapped its credit line to borrow cash following weak Christmas season sales. Same-store sales at Kmart fell 4% and at Sears they dropped 6% for the eight weeks ending on December 25. Sears expects to record a noncash charge of $1.6 billion to $2.4 billion in the fourth quarter.







Lazare Kaplan Sues Antwerp Bank

Lazare Kaplan sued KBC Bank and its subsidiary Antwerp Diamond Bank (ADB), charging that $135 million from its diamond proceeds were funneled through numerous shell companies controlled by Erez Daleyot, owner of D.D. Manufacturing, across Europe, the Middle East and Asia. Lazare Kaplan seeks $500 million in lost proceeds on allegations of racketeering and money laundering.

Lazare claims to have consigned diamonds to Daleyot who would then sell the goods and return the proceeds. Instead, the suit alleges that the banks and Daleyot worked together to transfer diamonds through a series of transactions meant to hide the money flow and use those proceeds to pay off loans the banks extended to Daleyot.

ADB is suing Lazare in Belgium, claiming the diamond company owes on a $45 million credit facility, which Lazare denies. Ongoing litigation has prevented Lazare from filing its financial statements for two years.







Su-Raj Seeks to Raise Funds

Su-Raj Diamonds plans to raise capital through preferential issue of up to 36.4 million equity shares of INR 10 each to foreign institutional investors. The company will hold an extraordinary general meeting on January 18, to obtain shareholder consent. The company has proposed shares to Passage to India Master Fund Ltd., Sparrow Asia Diversified Opportunities Fund, Davos International Fund and Leman Diversified Fund.







Consumer Confidence Rises

The Conference Board's Consumer Confidence Index&reg; rose 21% year on year to 64.5 points for the month of December 2011. The group defines a reading of 100 points or more as reflecting a positive economic environment. The index stood at 55.2 points in November. The Present Situation Index in December rose 88% to 46.7 points, while the Expectations Index rose 6% to 76.4 points.







Precious Metals Set to Rise in 2012

While gold prices rose about 15% year on year from December 28, 2010 to early December 28, 2011, before losing nearly all its gains, silver and platinum were most certainly down for the 2011. But looking ahead to 2012, BNP Paribas, Goldman Sachs and UBS expect stronger fundamentals for precious metals in the coming 12 months. Gold mining executives told PricewaterhouseCoopers that price increases will push average gold close to $2,000oz., which is in line with the banks' predictions too. The Professional Numismatists Guild (PNG) concluded metals will experience wide price swings in the coming year, but on average, they predict gold just shy of $2,000oz., silver near $49oz. and for platinum to recover to about $1,818oz. Watch the full report







JJS Sales Miss Expectations

Exhibitors at the ninth Jaipur Jewellery Show (JJS) experienced good contact with buyers and some orders, but many added that sales did not meet expectations. Exhibitors assumed that buyers were cautious due to high gold prices and the devaluation of Indian rupee against the U.S. dollar. JJS, also known as the December show, is considered the second largest jewelry show in India.







India's Brands to Grow Market Share

India’s major jewelry retailers could account for 10% of the country's total jewelry retail market by 2016, up from the current 4%, according to CARE Research. Growth is being spurred by rising income levels across non-metro, large and small cities and increased consumer spending on branded and luxury goods in these areas. Increased competition, stagnation and high rental costs in metros, compared with lower costs and high availability of space in tier-I and tier-II cities present strong fundamentals for retail growth. Jewelers are offering customized items according to local tastes in each city to drive demand.

CARE Research expects that branded jewelry will grow at 40% each of the next three years as many domestic and international brands are expected to raise their profile in the country. As a result, India’s total gems and jewelry market, which was valued at approximately $27.5 billion in fiscal 2011, is likely to grow at 15% per year to reach $55.3 billion by fiscal 2016.







Cutter Margins Remain Under Pressure

Ongoing global economic uncertainties are expected to impact India’s gems and jewelry sector, with operating margins for diamond cutting projected to remain under pressure, warned CARE Ratings. The trend became apparent earlier this year as export growth was primarily driven by higher prices. Record gold prices and high inflation in 2012 may weaken local Indian demand for gems and jewelry products.

CARE added that domestic growth will continue to be driven by higher disposable income groups, the rising young population, higher rates of working women, and the increased focus on branding and organized retail. The agency stressed that larger players with strong sourcing relationships for raw materials and those with geographically diversified clientele and higher value addition, combined with a more conservative foreign exchange and liquidity management policy are likely to exhibit more stable credit profiles.











STATS


Australia's Production -6%

Australia’s diamond production fell by 6% year on year to 2.335 million carats during the first fiscal quarter that ended on September 30. All diamond output was exported and reflected an 11% decline by value to $94 million. Imports of sorted gem quality rough diamonds dropped by 6% to $73 million.





Japan Imports +7%

Japan’s polished diamond imports rose 7% year on year to $62.1 in November. During the first 11 months of the year, Japan’s polished imports rose 16% to $747.2 million while the volume of imports declined 16 percent to 1.888 million carats. The average price of the imports rose 38 percent during the period to $396 per carat.









MINING


Rio Gets Green Light in India

Rio Tinto received an “in-principle” approval for a mining lease for its diamond mining project in the Bundelkhand region of Madhya Pradesh from the central government of India. Rio Tinto initially discovered diamonds in Madhya Pradesh as part of a regional exploration reconnaissance in 2004. Located 500 kilometers southeast of Delhi, the Bunder Project consists of eight lamproites and has an inferred resource of 27.4 million carats.

The development of a diamond mine at Bunder is estimated to cost Rio Tinto $500 million. Madhya Pradesh will most likely rank in volume and value, in the top 10 diamond producing regions in the world when the Bunder diamond mine commences production, which is expected from 2016. Rio Tinto also expects to invest $2 billion in taking the Argyle mine underground in Australia, which will enable the company to extend this resource through 2020.







NWB Approves Jericho Water

The Nunavut Water Board (NWB) approved a water license renewal for the Jericho diamond mine. Shear Diamonds requested an eight-year water license to cover the re-commissioning, operation and ultimate reclamation of the Jericho mine, which it bought in 2010. The previous water license for the mine was for six years. The decision now needs the approval of the minister of Aboriginal Affairs and Northern Development Canada.











ECONWATCH


For the week ending Dec. 29

Precious metals had a tough week. U.S. retailers were mixed, but noteworthy declines were observed for shares in Birks & Mayors (-12%), Charles & Colvard (-9%), Man Sang (-7%), and Zale (-6%). In India, Classic Diamonds (+17%) and Suashish Diamonds (+14%) surged. Mining shares were mostly higher, with Shore Gold (+15%) and True North (+11%) leading the pack. Read the entire stock report for major retailer and miner stocks from India, the U.S., and Europe.

Dec. 29 Dec. 22 Chng.
$1 = Euro 0.771 0.766 0.005
$1 = Rupee 53.06 52.73 0.3
$1 = Israel Shekel 3.81 3.79 0.02
$1 = Rand 8.18 8.18 0.00
$1 = Canadian Dollar 1.02 1.02 0.00

Precious Metals
Gold $1,546.40 $1,604.50 -$58.10
Platinum $1,371.00 $1,421.00 -$50.00

Stock Indexes Chng.
BSE 15,543.93 15,813.36 -269.43 -1.7%
Dow Jones 12,287.04 12,170.48 116.56 1.0%
FTSE 5,566.77 5,456.97 109.80 2.0%
Hang Seng 18,397.92 18,378.23 19.69 0.1%
S&P 500 1,263.02 1,254.01 9.01 0.7%
Yahoo! Jewelry 1,003.23 993.31 9.92 1.0%
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Rapaport Weekly Market Comment January 6, 2012


Polished diamond prices weak in second half but up for the year: 2011 RapNet Diamond Index (RAPI) for 1ct. +19% to 96.96, 0.30ct. -1% to 16.11, 0.50ct. +20% to 34.39, 2ct. +15% to 18.78, and 3ct. +18% to 35.19. Markets quiet in January, but traders hoping holiday momentum will spur positive 1Q. Far East demand improving with steady last minute orders before Chinese New Year. Indian markets cautious ahead of Mumbai show. Israel’s 4Q polished exports -13% to $1.4B, rough imports -22% to $899M, full year 2011 polished exports +23% to $7.2B, rough imports +17% to $4.4B.



RapNet Data: Jan. 5

Diamonds 849,982
Value $5,634,480,097
Carats 877,485
Average Discount -26.52%

www.rapnet.com
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RAPAPORT ANNOUNCEMENTS


January
16-26
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com


January
18-24
Wed-Tue

Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com
QUOTE OF THE WEEK
I understand the company's challenges, but I am more persuaded by the company's opportunities and strengths. As a company with over $40 billion in sales, millions of customers, irreplaceable brands, thousands of stores and committed associates, we have a lot to work with to improve our business and delight our customers. It is also important to have a board of directors and shareholders who are truly long-term oriented and who have made such a significant financial commitment in working to transform this iconic company.

Ron Boire | Newly Appointed Exec. V.P., Sears
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. To get on the fast track, email your resume to careers@rapaport.com.
RETAIL & WHOLESALE


Dec. Retail Sales

U.S. December retail sales --as reported by those who sell jewelry-- were mixed and most missed expectations. The following list is arranged beginning with highest sales total first. Only Bon-Ton and Saks observed that fine jewelry performed well during the Christmas 2011 season. Walmart, which is the largest retailer, suspended monthly reports during the Great Recession and thus offered no insight to sales performance. This past week, Sears stated that Christmas-season same-store sales fell by 5.2% and didn't provide totals. Tiffany, Signet and Zale traditionally announce their December sales by mid- or late January.

Target comps +1.6% | total +2.6% to $10.1B
Costco comps +7% | total +9% to $10B
Macy's comps +6.2% | total +6.6% to $4.93B
Kohl's comps -0.1% | total +1.7% to $3.25B
JCPenney comps +0.3% | total -2.3% to $2.89B
Nordstrom comps +8.7% | total +12.7% to $1.57B
Dillard's comps +4% | total +3% to $1.1B
Bon-Ton comps -0.7% | total -1.1% to $505M
Saks comps +5.8% | total +4.7% to $453M
Cato Corp. comps -1% | total +2% to $108M

Online Christmas Sales +15%

U.S. online retail sales for Christmas season 2011 finished as expected and rose 15% year on year at $37.2 billion, according to comScore. There were 10 shopping days between November 1 and December 31 that surpassed $1 billion in spending, led by Cyber Monday with $1.25 billion in online sales. Gian Fulgoni, comScore's chairman, said that until retailers report their financial year-end results, it remains to be seen whether aggressive pricing and free shipping offers came at the cost of lower margins.

The top 10 online spending days:

Cyber Monday -- $1.25B
December 5 -- $1.18B
December 12 -- $1.13B
November 29 -- $1.12B
December 6 -- $1.11B
December 16 -- $1.10B
December 13 -- $1.10B
November 30 -- $1B
December 8 -- $1B
December 15 -- $1B
Macy's Preps Stores for Closure

Macy's will prune underperforming stores from its list of locations in addition to opening new Macy's and Bloomingdale's. Macy's estimated $25 million to $30 million in costs will be booked in the fourth quarter of 2011 related to store closures. Clearance sales will begin on January 8 at five Macy's locations and four Bloomingdale's stores. Macy's will open in Salt Lake City, Utah and Greendale, Wisconsin within the next four months and plans three more stores nationwide in 2013, while Bloomingdale's expects to open in the Glendale Galleria in Glendale, California next year and build a new location in Stanford Shopping Center in Palo Alto, California in 2014.
Stuller Partners with Bfly

Stuller partnered with Bfly, the creators of the patented Butterfly Gem&reg; cut in Canada, to become the exclusive distributor of the Bfly line to independent retailers in the U.S. The Butterfly Gem cut’s most unique feature is its ability to resemble a butterfly in flight when tilted back and forth. Other features of the cut include, an enhanced cutting technique to improve light return and solid angles and grooves for easy setting. The collection is offered in sterling silver or 10-karat, 14-karat and 18-karat yellow or white gold with any birthstone, and is available as earrings, rings, bracelets, pendants, watches and charms.
NRF's BIG Show Begins Jan. 15

The "BIG Show," organized annually by the National Retail Federation (NRF) in New York, expects tens of thousands of attendees, hundreds of speakers, and a keynote address from President Bill Clinton. The exposition runs January 15 through 18, at the Jacob Javits Center in Manhattan. Dell is sponsoring an "Independents’ Day," on January 16, which is a full-day of special programs specifically for independent retailers.
India's EBITDA Margins to Fall in 3Q

CRISIL Research warned that the average Indian corporate EBITDA margins are expected to drop to around 17.7% for the October to December quarter from a 19.7% rate one year ago. Companies with substantial debt will be further impacted by rising interest rates and mark-to-market losses on foreign debt and derivatives. CRISIL also forecasts that corporate revenue growth will drop to a 14% to 15% rate during India's third fiscal quarter, down from a rate of 22.5% in 2010, due to lower rates of growth following a slowdown in consumption and investments.
India Seeks Mandatory Hallmarking

India’s cabinet approved an amendment to making gold hallmarking mandatory in order to protect consumers from unscrupulous jewelers. The amendment still has to be ratified by Parliament before it becomes a law. Currently, the Bureau of Indian Standards (BIS), under the Consumer Affairs Ministry, is the sole the administrative authority of hallmarking.
Thieves Wipe Out Jeweler's Inventory

Beverly Hills Jewelers Ltd., in Virginia, was robbed of its entire inventory, valued at close to $2 million. Store owner Gary Baker told local news that the thieves circumvented security devices and left behind weapons he had in the store as well as less valuable merchandise. Baker said he was not insured. The store was the scene of an armed robbery in 1994, in which Baker and his brother killed the invaders.
GENERAL


Citra's Founders Pass Away

Citra Trading Corporation announced the passing of its founder, Hirsh Chitrik, on December 28 in New York. Chitrik, 84, (pictured) established Citra in 1961 first as a pearl importer, but later the company added gold chains and then diamonds to its offerings. ''Hershel,'' as he was known, had a reputation of being a jeweler from the ''old school.'' He was survived by his wife, Rivka, his children, grandchildren and great-grandchildren. Chitrik's brother, Aaron, passed away on October 27 at 73. Aaron was involved with Citra's founding as well and started the gold department, before launching his own firm, Aaron & Son.
Bedos Joins Birks & Mayors

Jean-Christophe Bédos was appointed president and chief executive of Birks & Mayors and will succeed Thomas A. Andruskevich, who plans to step down from the role in the second quarter of 2012. Bédos will be based at the company’s headquarters in Montreal, Canada. Previously, Bédos served at Cartier, Boucheron International and Richemont.
Gaydamak Files Complaint

Arcadi Gaydamak filed a complaint with Israeli police against Lev Leviev regarding their former diamond business partnership, Globes reported. Gaydamak contended that Leviev has not paid him commissions and dividends on diamonds traded in Angola and the Democratic Republic of the Congo since 2004, with a value of $2 billion. Gaydamak previously filed a lawsuit against Leviev in London for failing to uphold their partnership.
Boire Joins Sears

Sears Holdings appointed Ron Boire as its executive vice president, chief merchandising officer and company president for the Sears and Kmart store formats. Boire will lead merchandising for both the Sears and Kmart brands. Boire was previously the president of Brookstone Inc.
Ndlovu to Head ZMDC

Jerry Ndlovu, the current director of Zimbabwe’s Airports and Business Development at the Civil Aviation Authority, has been appointed general manager of Zimbabwe Minerals and Development Corporation (ZMDC), The Standard reported. Ndlovu will begin his new role later in January filling a post left vacant when ZMDC dismissed its former general manager, Dominic Mubayiwa, following allegations of fraud. Ndlovu is a board member of the Minerals Marketing Corporation of Zimbabwe (MMCZ) as well as a member of the Royal Aeronautical Society and the Zimbabwe Institute of Engineers. Both MMCZ and ZMDC are under U.S. sanctions.
MSJA Adds New Directors

The Manufacturing Jewelers & Suppliers of America (MJSA) re-elected its sitting officers on the board of directors to a second term, while installing two new directors, Lee Krombholz, owner of Cincinnati-based, Krombholz Jewelers and Just Like You Designs and Bimal Das, director of ScotiaMocatta. In addition, David Pillow, president of Innovative Design Group in Richland Hills, Texas returned to the board as a director.
DAC Visits India, Israel

A delegation consisting of high level officials from Diamond Administration of China (DAC) visited Israel and India to better understand each nation’s diamond industry and seek cooperation in diamond trading. In India, the DAC met with representatives of the Gem & Jewellery Export Promotion Council (GJEPC) and visited Bharat Diamond Bourse in Mumbai. GJEPC and DAC also agreed to promote diamond consumption in India and China by way of educating consumers, creating innovative programs with end-to-end marketing. In Israel, DAC officials met with representatives of Israel Diamond Manufacturers Association (IsDMA), Israel Diamond Exchange (IDE), and the Israel Diamond Institute (IDI). The DAC expressed its desire to worth with Israel's organization to develop China’s Shanghai Diamond Exchange Center.
GIA 4Cs App in Simplified Chinese
The Gemological Institute of America (GIA) offers its 4Cs iPad app for consumers and retailers in Simplified Chinese. The free app is designed to educate and engage consumers on the 4Cs with video and interactive tools. App users can explore how diamond color changes across the GIA D-to-Z color scale, typical inclusions and blemishes at various points in the GIA clarity scale, a diamond’s anatomy, how various parameters influence a diamond’s cut grade, how a diamond’s size changes by carat weight, and a GIA Grading Report anatomy.
Sarin Technologies plans a diamond assay service as an online subscription product that enables users to verify a polished diamond's authenticity, geometric parameters and cut grade. Subscribers will first need to purchase the Sarin DiaScanTM S+, and pay a monthly subscription fee for the assay service based upon scope of use, with additional one-time charges for specific premium services such as printed reports and re-cut plans for optimal valuations.
Diamond Exhibit Celebrates Queen Elizabeth's Jubilee

Buckingham Palace will host a diamond exhibition in August and September, in honor of Queen Elizabeth's Diamond Jubilee this year, titled ''Diamonds: A Jubilee Celebration.'' The event will show various ways in which diamonds have been used and worn by British monarchs over the past two centuries. The exhibition also includes an unprecedented number of the Queen's personal jewels that have been inherited or acquired during her 60-year reign, such as the diamond tiara she frequently wears.
STATS
Israel

4Q $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,370 -13% $7,200 23%
Polished imports $1,510 7% $5,680 35%
Net exports ($140) $1,520 -6%

Rough imports $899 -44% $4,410 17%
Rough exports $564 -33% $3,520 15%
Net imports $362 3% $898 29%

Net diamond account ($502) $622 -32%
ECONWATCH
Winners & Losers in 2011
Watch how industry shares performed year on year. Diamond industry and related stocks had a tough year with only 13 of 55 publically traded companies on the Rapaport Stock Tracker showing gains. The best stock performance in 2011 came from DGSE (up 75%) for U.S. retail, Gitanjali Gems (up 43%) for Indian retail, and Gemfields (up 52%) was the only mining company to end the year higher. Mining stocks took a particularly hard beating.
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Taká maličkosť ako vie potešiť váha suroviny necelý gram.

Firma Petra Diamonds predala 4,8 karátový modrý diamant za 1.450.000 amerických dolárov cena $ 300,000 na karát pri svojom poslednom konaní, ktoré sa uskutočnilo v decembri vykázala. Diamant bol vyťažený spoločnostov bani Cullinan v Južnej Afrike a dosiahol najvyššiu cenu za karát surového kameňa predávaného Petra Diamonds ku dnešnému dňu.
Cullinan je preslávený ako spoľahlivé nálezisko pre modré diamanty, a predaj ukázal ako sú vzácne a žiaduce na medzinárodnom trhu.
Petra začala obchodovanie na hlavnom trhu londýnskej burzy (AIM).
Adonis Pouroulis, predseda Petra Diamonds vysvetlil, že spoločnost má hlavný cieľ pokračovať v raste na najbližšie roky, pretože neustále zvyšuje svoju produkciu až na viac ako 5 miliónov karátov fiškálne do roku 2019.
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RAPAPORT NEWS SERVICE | January 13, 2012 www.rapaport.com | news@rapaport.com


Industry Retail General EconWatch India Mining
Rapaport Weekly Market Comment January 13, 2012
Diamond markets stable but trading remains cautious. Rough selling at slightly below DTC box prices in dealer market as cutters expect ALROSA & DTC to reduce high prices at Jan. sights. Stable Far East demand ahead of Chinese New Year. Jewelry retailers report steady Christmas sales with tight profits and increased revenue due to higher prices. Nov.-Dec. Tiffany & Co sales +7% to $952M, Zale Corp +6% to $564M, Birks & Mayors +5% to $80M, Signet +8%, Theo Fennell -11%. Botswana Nov. diamond exports -55% to $185M. Israeli police arrest 16 people in diamond exchange on money laundering charges.
RapNet Data: Jan. 12

Diamonds 864,505
Value $5,704,404,837
Carats 900,671
RAPAPORT ANNOUNCEMENTS


January
16-26
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com


January
18-24
Wed-Tue

Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com
QUOTE OF THE WEEK
I believe the drop in U.S. holiday sales for Tiffany signals a change in shoppers' jewelry preferences. Additionally, the little blue box may be losing some of its luster, as affluent consumers shy away from the more conspicuous symbols of affluence. Luxury consumers don't want to be seen as part of the much maligned '1%,' and this manifests as a preference for luxury goods that are individual, but not overtly status oriented.

Pam Danziger | Unity Marketing
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. To get on the fast track, email your resume to careers@rapaport.com.
INDUSTRY
Certified Polished Diamond Prices +19%

Rapaport Diamond Price Statistics Annual Report 2011 shows certified polished diamond price increase were spurred by strong buying in the first half of the year. However, global economic uncertainties and tight liquidity in the cutting centers caused prices to soften in the latter half. Price increases between January and June 2011 were influenced by an aggressive overheated rough market driven by over-easy credit in the Indian market, speculative demand and significant restocking by retailers in the Far East and subsequently in the U.S. The second half of the year was influenced by increasing uncertainty caused by the U.S. and European economic crises, volatile financial, currency and commodity markets, as well as continued political instability in the Mideast. Tight liquidity, particularly in India, impacted trading from July as manufacturers were unable to obtain replacement costs on the high rough prices they had paid earlier in the year.

The RapNet Diamond Index (RAPI) for 1.00 ct. polished diamonds rose 19% to 96.96. The 0.30 ct. category fell 1% to 16.11, and 0.50 ct. increased 20% to 34.39. The RAPI for 2.00 ct. diamonds grew 15% to 18.78 and 3.00 ct. rose 18% to 35.1
Jewelers Weigh In On Christmas Sales Trends

How were Christmas retail sales in the U.S. -- really? Watch Now! Three independent jewelers explain how the busiest season of the year compared with their expectations and what surprises they found in diamond gift demand. Robin McCormick Jewelry Design Studio in Katonah, NY, Daniele Trissi of Scarsdale, NY, and Manfredi Jewels in Greenwich, CT, weigh in. India's economy is having some growing pains especially as the dollar strengthens against the rupee. Sanjay Kothari, the vice chairman of the Gem & Jewellery Export promotion Council (GJEPC), discusses the outlook on the sidelines of the Signature IIJS show in Mumbai.
RETAIL & WHOLESALE

Dept. Store Sales -1%, Jewelry Sales +1%

U.S. department store sales fell 1.3% year on year to $26.42 billion in December, according to advanced estimates released by the government. The government also released its estimate for jewelry store sales during the month of November 2011. Data reported a 1% year on year increase in sales to $2.495 billion, which represented a remarkable slowdown from previous months.

Jewelry Chain-Store Christmas Sales
Birks & Mayors comps +3%, total +5% to $80M
Zale comps +4%, total +6% to $564M
Tiffany & Co. comps +4%, total +7% to $952M
Signet comps +7.8%
Theo Fennell comps -11%
Tara Jewels Files for $42M IPO

Tara Jewels Ltd. plans an initial public offering (IPO) of equity shares with India's capital market regulator to raise up to $42.4 million (INR 2.2 billion). Tara said it would raise $29 million through a new round of equity shares, while major shareholder Fabrikant H.K. Trading Ltd. is selling a portion of its stake in the company valued at INR 700 million. In addition, Tara said it is considering raising INR 500 million through a private placement of up to 1.8 million equity shares before the IPO. The Mumbai-based jewelry maker’s first attempt to raise money in 2010 failed due to weak market conditions.
Fossil to Acquire Skagen Designs

Fossil Inc., designer and manufacturer of clothing, jewelry, watches, handbags, and other accessories, agreed to purchase Reno, Nevada-based Skagen Designs Ltd., which is maker of watches, jewelry, sunglasses, and clocks. Fossil estimated the value of the deal at about $236.9 million in cash and stock and will also acquire Skagen’s international affiliates, which operate regional offices in Denmark, Hong Kong, Germany, the U.K. and Canada.
DGSE Opens Two Southern Bullion Stores

DGSE Companies held two grand openings for new stores this month and plans to open a third new location in February. DGSE celebrated its 23rd Southern Bullion Coin & Jewelry store, which opened in Daphne, Alabama on January 3, marking the second location in the greater Mobile metropolitan area. On January 6, Southern Bullion opened in Anderson, South Carolina. In early February, Southern Bullion plans to open a 25th location, this one in Destin, Florida.
Faberge Plans Easter Egg Hunt for London

Faberge is planning a massive Easter egg hunt across Central London, which will feature 200 giant and uniquely crafted, strategically placed eggs, scattered throughout the capital, and take place over the 40 days and night of Lent beginning February 12. The two-and-a-half foot fiberglass eggs will be adorned and decorated by leading artists, architects, jewelers and designers. Following the hunt, the eggs will be available for purchase at three special auctions, with proceeds from the sales going to Action for Children and Elephant Family. The jewel in the crown of the auction will be an exclusively designed, one of a kind jeweled egg pendant by headline sponsor Fabergé, in collaboration with Nicky Haslam
Stuller Announces Dates for Bridge Conference
Stuller announced it was renewing its "Bridge" conference series for 2012. The conference allows a select group of retailer’s to learn about the industry’s technologies, customization tools and media development. The conference, which takes place in Stutter’s headquarters in Lafayette, Louisiana, is scheduled nine times this year: April 1 to 3 and 16 to 18, May 21 to 23, June 18 to 20, July 9 to 11 and 22 to 24, August 20 to 22, September 24 to 26 and October 15 to 17.
Yurmans Name Glen Senk as Chief Exec.

David and Sybil Yurman appointed Glen T. Senk as David Yurman Inc.'s chief executive effective February 27. Senk, who most recently served as chief executive for Urban Outfitters, has a record of success in developing and expanding powerful multi-channel, multi-national retail and wholesale brands.









GENERAL


Steady Sales at Signature IIJS

Visitor traffic remained light for most of the Signature IIJS show in Mumbai, but exhibitors appeared satisfied that the right type of buyers were in attendance. Most exhibitors reported that they were receiving a steady stream of inquiries but that buyers were asking for lower prices. They also noted that activity in the jewelry section was better than for loose diamonds. Overall, Indian polished manufacturers and dealers expect sales to improve in the first quarter following the local wedding season and as trading with international centers returns to normal following the New Year vacation period.





Surat Diamond Assoc. Honors Virani

The Surat Diamond Association, alongside the Gujarat Gaurav Samman Samiti, celebrated the appointment of KARP Impex's chairman, Kishrobhai Virani, as the Honorable Consul of the Kingdom of Lesotho. Virani entered the diamond business in 1980 and he received the National Export Award for Outstanding Performance among small-scale industries for three consecutive years from 1993 to 1996.





Israel Police Make Arrests in Diamond Exchange

Police arrested 16 in the Israel Diamond Exchange Sunday morning in connection with illegal financial activities. Authorities confiscated numerous computers and documents. Suspects were accused of laundering money in large sums without reporting the transactions to the relevant authorities in Israel or abroad. They were also reportedly making unlawful loans. The suspects allegedly gained tens of millions of shekels in profits from these activities.





Swatch 2011 Sales +22%

Swatch Group reported that 2011 sales rose 22% year on year to $7.6 billion. The company experienced significant growth, not only in Greater China but also in all other regions and all price segments. The watches and jewelry segment recorded a sales increase of 26% to $6.7 billion. The complete financial report, including profits, will be available in February.





Veichannal Launches Gemfling.com

Verichannel, a trade-restricted search engine for the jewelry industry, launched a search engine Gemfling.com to help consumers connect with retailers and brands online. The site was launched January 11 and allows users locate stores and compare products and prices.





Runci to Retire From JA

Matthew A. Runci, the long-time president of Jewelers of America (JA), will retire from the post on December 31, 2012. An executive search committee has been appointed that will commence shortly. JA initiated formal succession planning in 2009, engaging independent advisors to assist the board in defining responsibilities and competencies for the chief executive and devising interim plans to help the organization prepare for a smooth transition upon Runci’s retirement.









MINING


Mountain Province Spin-Off Kennady

Mountain Province Diamonds Inc. will spin-off its Kennady North diamond project into a newly incorporated company, Kennady Diamonds Inc. Upon completion of the deal, Kennady Diamonds will be listed on the TSX Venture Exchange with the distribution of shares to Mountain Province shareholders on a pro rata basis. Mountain Province will also provide Kennady Diamonds with sufficient working capital to fund the planned exploration activities for 2012.





Namakwa 1Q12 Update

Namakwa Diamonds Limited issued an interim, first-quarter management statement for the three months that ended on November 30. Rough and polished diamond trading inventory sold at cost for $6.36 million. The mining company has drawn $25 million from a $40 million loan with Jarvirne and it has reduced corporate costs from $15.9 million in fiscal-year 2011 to $9 million for the current period. Namakwa expects to tender initial production from its Lesotho operations this month and plans nine more tenders this year.





Crackdown Curbs Smuggling to Mozambique

Diamonds smugglers, from Mozambique towns that border Zimbabwe’s Marange fields, who have made their living in the illicit trade of Marange diamonds are finding their business drying up as Zimbabwe's President Robert Mugabe takes control of his country’s diamond mines. Since Kimberley Process approval was given to Marange diamonds in November, Zimbabwe security forces and companies loyal to Mugabe have tightened their grip on the Marange fields, devastating the local economies of border towns that have been dependent upon illegal trading.









ECONWATCH


Diamond Industry Stock Report

Investors didn't take kindly to jewelry retail sales reports this week and expected stronger Christmas sales and at least a positive outlook for consumer spending moving forward. Blue Nile -13%, DGSE -13%, Signet -4%, Tiffany -10%, Zale -16%, Damiani -8%, Theo Fennell -21%. Indian shares were fine though. Read the extended industry stock report for this past week.

Jan. 12 Jan. 5 Chng.
$1 = Euro 0.779 0.780 -0.001
$1 = Rupee 51.58 52.99 -1.4
$1 = Israel Shekel 3.83 3.85 -0.02
$1 = Rand 8.05 8.17 -0.12
$1 = Canadian Dollar 1.02 1.02 0.00

Precious Metals
Gold $1,650.00 $1,622.10 $27.90
Platinum $1,497.00 $1,411.00 $86.00

Stock Indexes Chng.
BSE 16,037.51 15,857.08 180.43 1.1%
Dow Jones 12,471.02 12,415.70 55.32 0.4%
FTSE 5,662.42 5,624.26 38.16 0.7%
Hang Seng 19,095.38 18,183.41 911.97 5.0%
S&P 500 1,295.50 1,281.06 14.44 1.1%
Yahoo! Jewelry 1,053.59 1,037.14 16.45 1.6%
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RAPAPORT NEWS SERVICE | January 27, 2012 www.rapaport.com | news@rapaport.com


Industry Retail Stats EconWatch India Mining


Rapaport Weekly Market Comment January 27, 2012


TRADE ALERT: INDIAN CUSTOMS AUTHORITIES RESTRICTING POLISHED DIAMOND IMPORTS. DO NOT SHIP POLISHED DIAMONDS TO INDIA WITHOUT CLARIFICATION. De Beers reduces prices and changes assortments at estimated $650M sight as 4Q production -24% to 6.5M Cts. and total 2011 production -5% to 31.3M Cts. Indian markets confused and concerned with expectations of lower polished prices. Rough trading weak and polished markets cautious. Chinese New Year begins with high expectations for retail jewelry sales, while wholesale trade closes. Letšeng 4Q sales +2% to $83M but average prices -23% to $2,543/ct. Surat’s SRDSIL auctions 46,000 Cts. of Zimbabwe and Russian rough for $17M.



RapNet Data: Jan. 26

Diamonds 870,492
Value $5,704,170,481
Carats 899,681
Average Discount -26.61%

www.rapnet.com
QUOTE OF THE WEEK
The department store is the No.1 opportunity in retail today. We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America's favorite store. Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated - fair and square.

Ron Johnson | JCPenney's CEO
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INDUSTRY


DTC Jan. Sight Estimate $650M

The Diamond Trading Company (DTC) opened its first sight of 2012 with an estimated value of $650 million, as the De Beers distribution unit adjusted prices and changed the assortments presented. Sightholders who spoke with Rapaport News said that while prices appeared lower on paper, the reductions were not so clear once the boxes had been assessed. Manufacturing margins remain very tight, thus some boxes, such as the 4 to 8 grainers, were giving a lower value than before, said one sightholder.

While average prices came down by an estimated 2% to 3%, some boxes fell by double-digit margins, particularly on the better quality stones. Goods that were more heavily impacted were 8-grainer to 2.5-carat boxes, and goods above 5 carats, with estimated reductions ranging from 10% to 25 in certain stones. London sightholders now expect DTC goods to sell at around list prices on the dealer market. They were selling at slight discounts in the run-up to the sight.

DTC sight week also provided company executives the opportunity to celebrate a new year. Read speeches to sightholders delivered by Varda Shine, Cynthia Carroll and Philippe Mellier.
U.S. Appoints Milovanovic to Chair KP

Gillian Milovanovic will serve as U.S. chair for the Kimberley Process (KP) in 2012. She will be the first woman to hold the post following her appointment this week by U.S. State Department Assistant Secretary for Economic and Business Affairs, Jose W. Fernandez. The KP's certification-of-origin system is followed by 76 diamond-producing and processing countries to eliminate the trade in conflict diamonds. Milovanovic previously served as ambassador to Mali and to Macedonia and has held senior positions at U.S. Embassies in South Africa, Botswana, and Belgium. She speaks fluent French and has extensive economic and business experience.
RETAIL & WHOLESALE


Jewelry Designers Share Passion, Inspiration

JA New York showcased independent jewelry designers who have extraordinary passion for their craft. One-of-a-kind collections that are priced right proved popular at the show with retail buyers. Video coverage includes new diamond jewelry designs from Erica Molinari; Ray Griffiths Fine Jewelry; Sarah Richey of Ethereal, and a special interview with jewelry designer Grace Freeman and her debut piece the "Liberation Necklace." WATCH NOW.
Things are Changing at JCPenney

J.C. Penney's chief executive, Ron Johnson, announced a new pricing and promotion scheme for the retailer that begins February 1 and includes permanent price mark-downs on all merchandise of at least 40%. The new strategy also includes simpler pricing, new tags on merchandise, and a new JCPenney logo and advertising campaign, which has already begun online with "Things are Changing 2.1.12."
BIS Licenses for Hallmarking

The Bureau of Indian Standards (BIS) has issued 9,005 licenses through December 31, for the hallmarking of gold jewelry. BIS is encouraging a hallmarking scheme for gold jewelry to ensure quality products for the consumers. BIS recognizes more than 170 hallmarking centers in the country. Earlier this month, India approved mandatory gold jewelry hallmarking.
Blue Diamonds Creates Subsidiary

Sri Lanka-based Blue Diamonds Jewellery informed shareholders that it will create a subsidiary in Singapore in order to establish a retail presence there and to create an e-commerce channel. The subsidiary would be a joint venture with ECL Soft Ltd., which is owned by E-Channelling Plc.
Luk Fook Raises $176M

Luk Fook Holdings raised approximately $176 million in Hong Kong from the sale of 46.6 million shares, for HKD 29.25 each, on January 19. As a result of the transaction, the majority shareholder, Luk Fook, reduced its stake in the larger company to 39.75% and public shareholders' stake was reduced to 46.95% from slightly more than 50% prior to the placement. Proceeds were expected to fund inventory, retail expansion and other general corporate purposes.
Tiffany Eyes India Partnership

Tiffany & Co. is reportedly working on a joint venture with former actress Reena Wadhwa to expand in India. Tiffany has been pursuing potential partners in emerging markets and will announce the details of a business structure in India once they have been finalized. Tiffany recently formed a joint venture company with Dubai-based jeweler Damas International to develop its business in the United Arab Emirates.
Thangamayil Profits Jump

Thangamayil Jewellery Ltd. reported that its fiscal third-quarter net profit more than doubled to $3.4 million. Growth was driven by higher sales, which rose 80% year on year to $61.8 million, and total expenditures grew 76% to $55 million.
GENERAL
Spivak Joins Martin Flyer

David Spivak joined Martin Flyer as a regional sales manager following a long career with Charles Wolf and Co. He will bring three new lines as well as the core Martin Flyer brand products to the Centurion Show in Scottsdale next week.
Van der Kwast Takes New Role at ABN Amro

Victor van der Kwast, the chief executive of ABN Amro’s International Diamond and Jewelry Group (ID&JG), is stepping down from his position but will continue at the bank as chief executive of ABN Amro Private Bank International for Belgium and Luxembourg. He will be replaced as the head of ID&JG by Erik Jens, who currently serves as chief executive of ABN Amro’s private banking division for Switzerland and the Swiss region.
Brewer to Head Sam's Club

Walmart promoted Rosalind G. Brewer to president of Sam's Club effective February 1. Brewer, 49, was most recently president of the Walmart U.S. eastern business unit, where she was responsible for more than $100 billion in annual revenue, representing almost 1,600 stores and more than 500,000 associates. Brewer was also the first chairperson of the Walmart president's council of Global Women Leaders. Brewer will replace Brian Cornell who is departing the company for family reasons.





Levene Commits Suicide

Andrew Robert Levene, 41, also known as Robert Thomas, was arrested in Spain in connection with the murder of Yekutiel Zeevi, owner of Y.Z. Jewelry in Westport, Connecticut. However, The Hartford Courant reported Thursday that Levene committed suicide in his cell while awaiting extradition to the U.S. Levene faced one count of interference with commerce through robbery, one count of federal murder, one count of attempted murder, and one count of causing death through the use of a firearm. Following the murder, Levene reportedly traveled to Philadelphia and three days later flew to Amsterdam, before ending up in Spain where he was arrested by Spanish National Police.









MINING


De Beers Production Falls

De Beers diamond production slumped in the fourth quarter of 2011 as the company carried out maintenance at key mines while market demand for diamonds remained soft. Output fell 24% year on year to 6.489 million carats during the three months that ended on December 31. For the full year, production decreased by 5% to 31.328 million carats.





Gem Diamonds' Sales +2%

Prices of diamonds recovered at the high-value Letšeng mine in Lesotho fell 23% year on year in the fourth quarter of 2011 as economic uncertainty took its toll on the market. Gem Diamonds, which owns 70% of the mine reported that the average price achieved at Letšeng fell to $2,543 per carat, from $3,291 per carat a year earlier. The company noted that prices achieved for Letšeng type higher quality polished diamonds declined by about 5% to 10% from July through the fourth quarter.

Gem Diamonds listed sales from Letšeng at $82.3 million, up 2%, as the volume of carats sold rose 32% to 32,353 carats. Production grew 35% to 29,783 carats. Full-year sales rose 57% to $299 million as the volume of sales grew 22% to 107,700 carats. Production rose 24% to 112,367 carats. Sales from Ellendale production rose 14% to $88.7 million for the full year.





Jarvirne Increases Stake in Namakwa

Jarvirne Limited nearly tripled its stake in Namakwa Diamonds to 32.39%. Jarvirne Limited is indirectly owned by Eduard Prutnik and holds 98,65,158 shares, up from 31,873,491. Namakwa signed an agreement with Jarvirne for a two-year loan of $40 million in the third quarter of 2011 and has since drawn $25 million.





Steinmetz to Raise Funds for Koidu

The Beny Steinmetz Group is planning to float its Sierra Leone diamond mine on the Hong Kong Stock Exchange, the Financial Times reported. The group’s Octea subsidiary, which owns the Koidu mine, is looking to raise between $400 million and $600 million through the initial public offering, which will give the mine a value of $2 billion to $3 billion.
ECONWATCH
Diamond Industry Stock Report

Stocks were largely mixed this week. Some noteworthy movement included: Birks & Mayors (+13%), JCPenney (+15%), LJ Intl. (+12%), Goenka Diamond (+20%), Moutain Province (-10%), Peregrine (-11%), Stornoway (-25%), Stellar Diamonds (+34%). Read the extended industry stock report for this past week.

Jan. 26 Jan. 19 Chng.
$1 = Euro 0.760 0.770 -0.010
$1 = Rupee 50.11 50.21 -0.1
$1 = Israel Shekel 3.76 3.79 -0.03
$1 = Rand 7.79 7.92 -0.13
$1 = Canadian Dollar 1.00 1.00 0.00

Precious Metals
Gold $1,721.60 $1,657.50 $64.10
Platinum $1,609.00 $1,519.00 $90.00

Stock Indexes Chng.
BSE 17,077.18 16,643.74 433.44 2.6%
Dow Jones 12,735.63 12,625.19 110.44 0.9%
FTSE 5,793.10 5,741.15 51.95 0.9%
Hang Seng 20,439.14 19,942.95 496.19 2.5%
S&P 500 1,318.45 1,314.50 3.95 0.3%
Yahoo! Jewelry 1,099.45 1,070.11 29.34 2.7%
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RAPAPORT NEWS SERVICE | February 3, 2012


Industry Retail Stats EconWatch India Mining




Rapaport Weekly Market Comment February 3, 2012


Far East diamond demand restrained but strong gold demand spurs jewelry sales during Chinese New Year. Belgian polished suppliers hold prices firm despite weak trade at Antwerp Diamond Fair. Rough premiums improve but confusion remains over DTC box values. Prices stable at Petra Diamonds tender as company reports 1H revenue +13% to $101M, production +64% to 953,553 Cts. LVMH 2011 sales +16% to $31B, profit +22% to $7B. Titan Industries 3Q sales +25% to $493M, profit +19% to $33M. Japan’s Dec. polished diamond imports +28% to $67M, 2011 imports +17% to $814M.



RapNet Data: Feb. 2

Diamonds 876,821
Value $5,765,455,921
Carats 908,635
Average Discount -26.49%

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RAPAPORT ANNOUNCEMENTS


February
8-19
Wed-Sun

Rapaport Melee Auction
New York & Hong Kong

email: auctions@rapaport.com


February
22-28
Wed-Tue

Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com





QUOTE OF THE WEEK
Whether people are planning to get engaged, or just celebrate the holiday with flowers and a night out, consumers are telling us they can open their wallets a little wider for Valentine's day. We've seen a consistent trend of consumers saying they will spend more, from holiday shopping to travel plans and spending plans for February 14 are no exception.

Sonali Chakravorti | American Express






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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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


Chinese New Year Jewelry Sales +16%

Chinese consumers celebrated the Year of the Dragon and drove retail sales higher by 16.2% year on year to $74.6 billion during the traditional New Year Golden Week. The country’s Ministry of Commerce reported jewelry sales grew 16.4% during the week, which began January 23, with gold bars, gold ingots and other dragon-themed jewelry ranking among the favorite items.





Jewelry Spending Surveys Point Higher

Watch Full Coverage. Surveys from American Express, Sears, and the National Retail Federation (NRF) point to strong jewelry sales leading up to Valentine's Day, February 14. Of those who celebrate the holiday, consumers plan to spend $126.03, up 8.5% from 2011, according to the NRF, and 19% of consumers plan to buy jewelry. American Express determined that 15% of consumers intend to buy jewelry for Valentine's Day and also shared what consumers felt to be resonable price ranges for engagement rings. Sears, which boosted its jewelry offerings for February 14, found that 40% of those in a relationship intend to get engaged on Valentine's Day.











RETAIL & WHOLESALE


LVMH Revenue +16%, Profit +22%

Luxury group LVMH’s revenue rose 16% year on year to $31.2 billion during 2011 and profit jumped 22% to $7 billion. Specifically for the watches and jewelry segment, revenue nearly doubled to $2.6 billion in large part due to the integration of Bulgari. LVMH reported that organic revenue, which reflects comparable-store sales and exchange rates for the watches and jewelry segment rose 23%. LVMH watch and jewelry brands continued sustained growth across all geographies.





Titan's 3Q Sales +25%, Profit +19%

Titan Industries Ltd. reported that net sales rose 25% year on year to $493.3 million during its third fiscal-quarter that ended on December 31, 2011. Net profits grew 19% to $33.1 million Titan's jewelry sales increased by 25% to $401.6 million while sales at its watch division rose 17% to $77.5 million.





Shantivijay Jewels 3Q Sales -20%

Shantivijay Jewels Ltd. reported that group net sales fell 20% year on year to $3.2 million during its third fiscal-quarter that ended on December 31, 2011. Net profit slumped 48% to $63,438 as interest expense rose 201% to $48,103 and other income declined 22% to $29,49. Total expenditures fell 20% to $3.1 million during the quarter.





Renaissance Jewellery Sales -2% in 3Q

Renaissance Jewellery Ltd. reported that net sales fell 2% year on year to $69.8 million during the third fiscal-quarter that ended on December 31, 2011 as jewelry and diamond revenues declined. However, net profits increased by 40% to $4.4 million during the quarter largely due to lower expenses. The company’s jewelry segment sales declined 12% to $62.7 million and sales at its diamond business fell 43% to $5.8 million.





Brooke Burke Partners with Chad Allison

Television personality Brooke Burke will launch a jewelry line with the label ''Brooke Burke Collection by Chad Allison.'' Her partnership with the brand created 30 jewelry styles consisting of bracelets, pendants, earrings, and rings in black and white diamonds and colored gems in gold and sterling silver. The pieces will retail from $149 to $3,000 and Chad Allison targets a distribution channel of 700 doors across the U.S. The official launch for Burke is planned for Luxury by JCK in May.









GENERAL


Antwerp Hosts Third Annual Diamond Trade Fair

The Antwerp Diamond Bourse and the Diamond Club of Antwerp hosted the third edition of the Antwerp Diamond Trade Fair (ADTF), as diamond buyers from Europe, the Middle East and Turkey visited the booths of some 70 Antwerp diamond firms. Many exhibitors noted a sizable delegation of Middle Eastern buyers at the fair, from countries such as Saudi Arabia and Lebanon, who were seeking high-end goods in the form of large, loose diamonds and jewelry. Raphael Rubin, a member of the ADTF's organizing committee, also revealed that buyers from North America, China and Southeast Asia would be invited to take part in the 2013 fair.





Zale Promotes Brumfield to SVP

Ken Brumfield has been appointed senior vice president of financial products for Zale Corporation. He will be responsible for all customer financing, warranty, insurance and repair product offerings, and will to report to Matt Appel, Zale’s chief administrative officer. Prior to joining Zale in September 2010, Brumfield was a director of sales at Alliance Data Systems and a senior vice president of credit services at Stage Stores Inc.





Cavalieri Receives Award of Order of Carl Faberge

CIBJO's president, Gaetano Cavalieri, received the Award of the Order of Carl Faberge at a ceremony held February 1 in St. Petersburg, Russia, during the opening of the International Jewellery Forum, JUNWEX Petersburg 2012. The awards committee of the Carl Faberge Memorial Foundation said it was honoring Cavalieri for his contribution to the preservation and maintenance of the art of jewelry, as well as for the substantial part he has played in the development of the jewelry industry. The Order of Carl Faberge is an initiative of Tatyana Fedorovna Faberge, the great granddaughter of the famous jeweler, and was envisioned by its founders to become a Russian equivalent of the Nobel Prize.









STATS


Japan

Dec. %Chng. 2011 %Chng.
Polished imports $67M 28% $814M 17%
Price per carat $479 76% $401 41%










MINING


Petra Diamonds Revenues +13%

Petra Diamonds' revenue rose 13% year on year to $101.4 million in the first fiscal-half of 2012 as production grew and rough markets stabilized. The company reported that group production grew 64% to 953,553 carats during the six months that ended on December 31, 2011 due to the addition of the Finsch mine, which Petra bought from De Beers for $192 million. The company noted that while jewelry sales during the Christmas season in the U.S. and Europe registered only modest growth, strong increases continued in emerging markets.





Stellar Diamonds Releases Interim Results

Stellar Diamonds reported, in an interim financial statement for six months that ended in December, that it held $1 million in cash reserves and approximately $600,000 in rough diamonds in inventory that were ready for sale. The company spent approximately $4.2 million developing the Droujba, Guinea and Tongo, Sierra Leone diamond resources.





Paragon Diamonds Raises Nearly $3M

Paragon Diamonds Limited completed a placement of 5,948,275 new ordinary shares at 29 pence each on London's Alternative Investment Market (AIM) and raised gross proceeds of approximately $2.71 million. The new shares will rank pari passu with existing ordinary shares, and dealings on AIM are expected to commence in the new ordinary shares next Wednesday, February 1.The company's issued share capital now consists of 194,125,329 ordinary shares of 1 pence each.









ECONWATCH


Diamond Industry Stock Report

Stocks traded more calmly this week and were mostly on the upside. Biggest movers were Birks & Mayors (-10%), Charles & Colvard (+14%), Scio Diamond (-8%), Chow Tai Fook (-9%), Ren. Jewellery (+11%), Lucara (+21%), Stornoway (+11%). Read the extended industry stock report for this past week.

Feb. 3 Jan. 26 Chng.
$1 = Euro 0.760 0.760 0.000
$1 = Rupee 49.03 50.11 -1.1
$1 = Israel Shekel 3.72 3.76 -0.04
$1 = Rand 7.67 7.79 -0.12
$1 = Canadian Dollar 0.99 1.00 -0.01

Precious Metals
Gold $1,759.50 $1,721.60 $37.90
Platinum $1,626.00 $1,609.00 $17.00

Stock Indexes Chng.
BSE 17,431.85 17,077.18 354.67 2.1%
Dow Jones 12,707.08 12,735.63 -28.55 -0.2%
FTSE 5,796.07 5,793.10 2.97 0.1%
Hang Seng 20,739.45 20,439.14 300.31 1.5%
S&P 500 1,325.54 1,318.45 7.09 0.5%
Yahoo! Jewelry 1,098.16 1,099.45 -1.29 -0.1%
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Rapaport Weekly Market Comment February 24, 2012


Hong Kong show OK with steady sales and stable prices improving market sentiment. Buyers remain cautious due to uncertain global economy. Rough trading weak and cutters’ profit margins tight. Israeli tax authorities temporarily suspend investigations and raids as bourse negotiates new tax agreements for diamond trade. India’s new 2% protectionist polished import tax is destroying its role as primary trading center. Indians will sell what they cut, but that’s it. Their global trading will move to Dubai, Hong Kong and other centers. India’s Jan. polished imports plummet 59% to $945M, polished exports -19% to $1.8B, rough imports +7% to $1.1B. Zale 2Q revenue +6% to $664M, profit +6%.



RapNet Data: Feb. 23

Diamonds 868,296
Value $5,688,960,800
Carats 906,795
Average Discount -26.57%

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RAPAPORT ANNOUNCEMENTS


February
22-29
Wed-Wed

Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com


Feb-Mar
28-1
Tue-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com





QUOTE OF THE WEEK
[The Hong Kong show had] more jewelry retailers and manufacturers as visitors this year with fewer middle-men and agents....Since there had been a quiet season just prior to the show due to the U.S. holiday and Chinese New Year, we expected a good buyers turn out. There was good demand and business in certified carat-plus sizes in VS-SI, triple EX goods categories.

Dinesh Lakhani | Kiran Gems






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


Israel Suspends Probe For Now

Authorities in Israel suspended their investigations into alleged tax evasion and money laundering activity taking place in the Israel Diamond Exchange (IDE) for one month. A professional team will be established in the coming days to negotiate a suitable solution to the affair and to represent the industry in negotiating a long term solution to future dealings with the tax authorities. Authorities launched the investigation in early January focusing on 16 suspects who were systematically laundering money in large sums without reporting the transactions to the relevant authorities in Israel or abroad. They were also reportedly converting foreign exchange and providing unlawful loans, allegedly gaining tens of millions of shekels in profits from these illegal activities. Dealers noted that trade within the bourse fell sharply due to the investigations.







ALROSA Previews Rough in Israel

ALROSA will hold a preview in Israel of the rough diamonds it plans to auction. The company is preparing to tender rough diamonds that are larger than 10.8 carats. ALROSA, through its subsidiary in Israel, Arcos Diamonds Israel Ltd., will allow pre-qualified companies to participate in the upcoming tender by placing bids in Israel without having to travel to Moscow. The diamonds will be shown from the offices of Arcos Diamonds Israel between February 26 and March 3.







Jewelry Price Inflation +8% in Jan.

U.S. consumer price inflation (CPI) in January for the jewelry sector surged 8.2% year on year to 185 points, according to government figures. The reading established a new CPI record for jewelry and it was the thirteenth consecutive monthly calculation with a reading above 170 points. Monthly jewelry price inflation averaged a 9.5% increase during 2011 as prices were driven higher by record gold prices, near record prices for silver and double-digit price increase for diamonds. Meanwhile, the CPI for all product categories in January rose 2.9% year on year to 227.5 points. That figure too was a record high, which was in part fueled by a jump in prices for food, fuel oil and apparel.











RETAIL & WHOLESALE


Zale Narrows 1H Loss; Pandora's Sales, Profit Slide

WATCH NOW: The retail environment in the U.S. continues to send mixed messages after Blue Nile's sales and profit contraction this past week. Zale's results were certainly stronger than they have been, but revenue growth fell short of the rate of jewelry price inflation. Michael Hill's performance was strong with only the U.S. operations reporting a loss. Pandora reported a weaker quarter as sales plunged and profit fell, however, Pandora closed its year with higher profit.







Sears Loss Tops $2B

Sears reported that fourth-quarter sales fell 4% to $12.5 billion and it reported a loss of $2.4 billion compared with profit of $374 million one year ago. The retailer announced drastic measures, including selling stores, to raise revenue and return to profitability. Sears plans to reduce peak inventory in 2012 in excess of previously announced $500 million to $580 million range and peak borrowing needs in excess of $350 million estimate. The company will separate Sears Hometown and Outlet businesses and certain hardware stores.







Charles & Colvard's Profit Soars

Charles & Colvard more than doubled revenue during the fourth-quarter to $7.2 million, and the company's net income rose to $1.8 million from $410,232 one year ago. Sales of moissanite and jewelry for the company's fiscal-year, which closed December 31, rose 26% year on year to $16 million and profit was flat at $1.6 million.







SRS Profit +42%

SRS Ltd. reported net sales rose 7% year on year to $127.7 million during its third fiscal-quarter and net profit jumped 42% to $4.8 million. Jewelry segment sales increased 23% to $110.8 million, while cinema business sales grew 33% to $2.8 million. However, cash-and-carry sales declined 49% to $13.2 million and food and beverages sales fell 10% to $1.1 million. Total expenditure rose 7% to $120.2 million.







Goenka Profit -82%

Goenka Diamond & Jewels Ltd. reported that group net sales fell 23% year on year to $24.8 million during its third fiscal-quarter due to weak diamond and jewelry revenue. Net profit dropped 82% to $670,948. Diamond business sales fell 21% to $18.2 million and jewelry segment sales decreased 30% to $6.7 million. Total expenditures declined 13% to $24.2 million.







Forevermark Expands in South Africa

Forevermark announced a wider partnership for South Africa by adding retailers Ntinga and Shemer in Johannesburg, Peter Gilder in Cape Town and Lorraine Efune in both cities to offer jewelry featuring Forevermark diamonds. To celebrate the ongoing expansion across South Africa, the brand held an event to showcase one-of-kind Forevermark jewelry in the presence of numerous national celebrities.







Graff Opens in Burj Al Arab

Graff opened in the Burj Al Arab hotel in Dubai through a partnership with Damas. The new 121-square-meter Graff boutique is located on the first floor of the luxury hotel and carries the jeweler's Butterfly collection, Diamonds on Diamonds collection and Lotus for Jewellery collection, among others. Watches include GraffStar Grand Date, GraffStar Ladies, ChronoGraff and ScubaGraf. Damas is the sole agent for Graff in Dubai.







'Canoe' Wins Rio Tinto Competition

Canada-based jewelry designer Reena Ahluwalia was recently honored as an international winner in the Rio Tinto Diamonds Global Design Competition. There were nine winners chosen for four categories, which included Champagne Diamonds, Silvermist Diamonds, Canadian Diamonds and Sustainable Jewelry. Ahluwalia received the prestigious Master Craftsman award for the Canadian Diamonds' category for her "Canoe" diamond necklace. Canoe, which depicts a snow-covered canoe in a frozen crystalline lake, is set in 18-karat white gold and features 28.96 carats of diamonds from Canada. Ahluwalia said it was inspired by a poetic image of the magical Canadian landscape and its pristine white winters. Crossworks Manufacturing Ltd. collaborated with Ahluwalia and sponsored the manufacturing.







Fab Acquires Casacanda

U.S.-based online flash sales website Fab.com acquired Casacanda to expand its reach into Germany, Austria and Switzerland. Casacanda.de, which now switched to Fab.de, had grown membership to more than 250,000 since launching in September. Fab.com reinvented itself about eight months ago from a social website into an ecommerce venue that sells fashion items, including jewelry and watches, and it now boasts more than two million members and claims to have sold one million products so far.











GENERAL


JVC Hosts Hire, Fire Seminar

The Jewelers Vigilance Committee (JVC) will present a seminar on “How to Hire, Fire and be a Legally Compliant Employer in One Easy Lesson,” in Manhattan on March 14. JVC developed this program to teach jewelers about legal safeguards in order to avoid expensive and distracting employment lawsuits. Suzan R. Flamm, JVC’s senior counsel, will offer practical “how to” actions many jewelers can implement to avoid employment lawsuits and provide the right environment to foster employee retention. While this JVC seminar is free, registration is required. Call Natalia at 212.302.5739.







Pritchard Joins Zale's Board

Beth M. Pritchard will join the board of Zale Corporation on March 9. Pritchard is the North American Advisor for M. H. Alshaya Company, a global franchise company representing over 65 premium brands throughout the Middle East, Eastern Europe, Russia and Africa. Pritchard’s past experience includes founding Sunrise Beauty Studio, serving as vice chairman of Dean & Deluca and as president of Limited Brands’ Bath & Body Works. She currently serves on the boards of Vitamin Shoppe and Cabela’s.







HRW Says Keep Mugabe Sanctions

Human Rights Watch (HRW) urged the European Union (E.U.) to maintain travel restrictions and asset freezes on President Robert Mugabe and his inner circle until Zimbabwe carries out human rights reform measures. The E.U. is conducting its annual review of sanctions on Zimbabwe and is scheduled to announce a decision on March 17. HRW criticized Mugabe's political party, ZANU-PF, for failing to abide by an earlier agreement to promote freedom of speech, end politically motivated violence, and apply national laws fully and impartially to hold those responsible for abuses accountable. HRW contended that the ZANU-PF has been the main obstacle to making progress in carrying out those reforms and have so far stayed silent on investing the Marange diamond violence of two years ago.











MINING


Botswana Diamonds Raises $2M

Botswana Diamonds raised $2.38 million through a placement of 37,750,000 shares in London at 4 pence each. The majority of the net proceeds will be used for the company’s exploration projects in Botswana, Cameroon and Zimbabwe. The company expects first results from its Botswana operations in third-quarter, while in Cameroon, first results are due mid-year. The company has sampling projects in Zimbabwe.







Mining Firm Seeks New Concessions

The Diamond Mining Corporation, a joint venture between Zimbabwe and Pure Diam of Dubai, reportedly asked the government for additional diamond concessions in the Marange since the lifespan of its current operations was only expected to be four years at the present rate of production. To improve on Diamond Mining Corp.'s investment, the government should consider allocating a concession with diamondiferous conglomerates, which have been known to carry a grade averaging plus or minus 6 carat per tonne, the company's general manager was quoted saying by the Zimbabwe Standard.

Pure Diam has reportedly contributed $35 million towards developing its Marange concession in partnership with the Zimbabwe Mining & Development Corporation (ZMDC), which is under sanctions by the U.S. and E.U. Production from the concession is being sold to the global diamond market. This production may not be purchased by entities based in the U.S. or E.U.







Lucara Secures $25M Facility

Lucara Diamond secured a $25 million credit facility from The Bank of Nova Scotia. The facility will allow the company to focus fully on commissioning activities at its Karowe mine in Botswana. Under the terms, the two year facility will be secured by Lucara's assets and that of its subsidiaries. Up to $15 million will be advanced prior to the delivery of security over the company's Karowe assets.







Chamber Urges Fee Review, PM Seeks Openness

The Zimbabwe Chamber of Mines called for the government to rescind new mining fees, which increased as much as 5,000 percent for some miners and were therefore out of line with neighboring country's fees. The chamber argued that these fees would create an unfavorable investment climate for the mining sector.

Meanwhile, Zimbabwe's Prime Minister, Morgan Tsvangirai, called for greater openness in the country's diamond trade, adding that the profits the nation’s diamond industry should benefit all citizens. Zimbabwe expects $600 million from diamond sales this year. The country’s Treasury, however, still claims millions of dollars in diamond revenue cannot be accounted for from the past two years.







WWW to Market AGD Rough Output

Diamond producer Arkhangelskgeoldobycha (AGD), which is currently bringing the Grib diamond pipe near Arkhangelsk in northwestern Russia into production, signed a marketing contract with London based WWW International Diamond Consultants to advise the miner on how best to maximize its rough diamond output once goods come to market at the end of 2013. AGD, which is wholly owned by oil giant Lukoil, has estimated that it will be mining annually at least four million carats of high-quality diamonds once it reaches full production.







Rio Tinto Recovers 12.76ct. Pink

Rio Tinto said it recovered Australia's largest rough pink diamond, a 12.76-carat stone, at its Argyle open pit mine in the east Kimberley region of Western Australia. The diamond, to be named the "Argyle Pink Jubilee," is a light pink diamond and similar in color to the Williamson Pink that Queen Elizabeth received as a wedding gift and which was set in a brooch for her coronation. The diamond will be cut and polished in Perth by Richard How Kim Kam, who estimated that it will take 10 days to cut and polish the diamond.











STATS


India

Jan. $Mil. %Chng.
Polished exports $1,773 -19%
Polished imports $945 -59%
Net exports $828

Rough imports $1,094 7%
Rough exports $153 45%
Net imports $941 3%

Net diamond account ($113)










ECONWATCH


Diamond Industry Stock Report

It was a mixed week for U.S. jewelry retail stocks. Charles & Colvard shares rose 22%, but Birks & Mayors fell 10%; European shares were mostly higher and Indian shares were lower except for Gitanjali (+7%). Mining shares performed well, Peregrine, Lucara, Shore Gold, and Mwana Africa all rose 10%. Read the extended industry stock report for this past week.

Feb. 23 Feb. 16 Chng.
$1 = Euro 0.750 0.760 -0.010
$1 = Rupee 49.09 49.28 -0.2
$1 = Israel Shekel 3.75 3.75 0.00
$1 = Rand 7.66 7.76 -0.10
$1 = Canadian Dollar 1.00 0.99 0.01

Precious Metals
Gold $1,780.10 $1,729.40 $50.70
Platinum $1,720.00 $1,622.00 $98.00

Stock Indexes Chng.
BSE 18,078.50 18,153.99 -75.49 -0.4%
Dow Jones 12,984.69 12,904.08 80.61 0.6%
FTSE 5,937.89 5,885.38 52.51 0.9%
Hang Seng 21,380.99 21,277.28 103.71 0.5%
S&P 500 1,363.46 1,358.04 5.42 0.4%
Yahoo! Jewelry 1,163.62 1,138.84 24.78 2.2%
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Rapaport Weekly Market Comment March 2, 2012


De Beers DTC sight estimated at $600M with prices stable. Rough dealer markets improve slightly with most boxes trading close to DTC list. Polished markets relatively steady with some softening of 1ct. RapNet Diamond Index. Namakwa Diamonds launches production at Lesotho’s Kao mine. Firestone Diamonds suspends operations at Botswana’s BK11 mine due to weak rough market. Petra Diamonds 1H revenue +13% to $101M, posts loss of $27M vs. profit of $25M previous year.



RapNet Data: Mar. 1

Diamonds 876,143
Value $5,741,117,358
Carats 914,941
Average Discount -26.35%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS


March
12-15
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com


March
19-29
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com





QUOTE OF THE WEEK
We noted diminishing clearance inventory throughout the month and believe that the majority of retailers began [March] with clean inventory positions. Still, deeper year-over-year promotions continue as new full-price flows are commanding center stage throughout the mall envioronment.

Adrienne Tennant | Janney Capital Markets






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


DTC Feb. Sight Estimate $600M

The Diamond Trading Company (DTC) February sight ended Wednesday with an estimated value of $600 million. The De Beers distribution unit kept prices stable with minor adjustments on specific items. The sight one year ago this month was estimated at $690 million. The mood of traders improved slightly since January largely due to better Indian demand and a more stable rupee. One sightholder noted that Indian goods are starting to trade at high single-digit premiums again, but suspected that dealers are pushing prices to raise the value of their inventories before the financial year ends on March 31. Some complained that DTC prices are high and that manufacturers are struggling to profit from their cutting and polishing activity. Rapaport estimates indicate that through the first two sights of the year, DTC sales are down 14 percent to $1.25 billion.







India Eases Duty for Lab Work

India waived its 2% import duty on cut and polished diamonds sent abroad for certification or grading purposes. The exemption follows the introduction of a 2% import tax on polished stones on January 17, which that led to confusion regarding stones returned from laboratories abroad. A notification said such duty will not be applicable on re-importing cut and polished diamonds (each of 0.25 carat or more) sent for certification or grading abroad to certain authorized laboratories. The government noted that an exporter with annual export turnover of $1 million (INR 50 million) for each of the last three years may export cut and polished diamonds abroad to authorized laboratories without being charged the duty.







Consumer Confidence Steady

Watch Now: The Conference Board's Consumer Confidence Index&reg; in February 2012 was steady from one year ago at 70.8 points (1985=100). Consumer spending however is still down 36% on a daily basis from February 2008, shows Gallup. But PriceGrabber surveyed shoppers and asked how many intend to spend more on jewelry this year. While the majority of U.S. consumers will hold their wallets tight, of the 21% who plan to spend more, some 24% will buy more jewelry the resarch found.











RETAIL & WHOLESALE


February Retail Sales

Same-store %Chng. Total %Chng. $Mil
BonTon 0.7% 0.9% $199
Costco 8% 10% $7,040
Kolhs -0.8% 1.1% $1,170
Macy's 4.6% 5.5% $1,860
Nordstrom 10% 16.2% $704
Saks 6.6% 6% $196
Target 7% 8% $5,130












Jewelry Sales +58% in Macao

Macao's Statistics and Census Service placed the value of retail sales during the fourth quarter of 2011 at $1.57 billion, reflecting a year-on-year increase of 44%. Retail sales of watches, clocks and jewelry accounted for 30% of the total at about $477 million. Unit sales rose 30 percent year on year. The value of retail sales for 2011 rose 42% year on year to $5.4 billion, driven by a 58% jump in sales of jewelry, watches and clocks as well as a 54% surge in the sale of leather goods.







PMMC Opens New Facility

The Precious Minerals Marketing Company (PMMC) in Ghana inaugurated its new diamond cutting and processing plant in Accra. The facility will initially employ 40, but the company expects to increase the number to 400 in the future. PMMC purchases and then exports gold and diamonds from small-scale miners, and it produces jewelry. The company was founded in 1989.







Dousset Opens Diamond Showroom

Jean Dousset opened a diamond showroom at 8471 Melrose Avenue in Los Angeles. The space presents his diamond engagement rings and jewelry collections and features original portraits of Dousset's great-great grandfather, Louis Cartier. Dousset launched his independent jewelry career in 2005, after working for some of the most illustrious jewelry brands such as Chaumet, Boucheron and Van Cleef & Arpels. In the past few years, the designer has secured diamond suppliers whom he defines as uncompromising and focused on the very best cut diamonds.







Graff Sues to Recover Diamonds

Graff filed lawsuits in Manhattan seeking the return of two gems it believed were stolen from an elaborate unsolved $20 million heist in its London store in 2007. Graff charges that one of the gems, weighing in at 16 carats, turned up in a pawn shop in Hong Kong, while the other, a 4.20-carat diamond came into possession of an Israeli diamond consolidator. Both diamonds are being held in New York by the Gemological Institute of America pending a court hearing.











GENERAL


Myanmar Gems Sale in March

Myanmar will hold its annual gems show in the at Mani Yadana Jade hall in country’s new capital of Nay Pyi Taw from March 9 to 18 with preview dates set for March 6 to 8. Organized by the country’s Ministry of Mines, the 49th Myanmar Gems Emporium will display around 15,000 gems.







Mordaunt Joins I. Henning

Jamie Mordaunt will join I. Henning & Co.'s Botswana management team where he will play an integral part in its development. Mordaunt will relocate to Gaborone to join Tshebetso Kgatlwane (Teekay), in leading Hennig's expansion plans in preparation for DTC sights scheduled to begin in Botswana at the end of 2013.







High Joins Stuller

Stuller Inc. added Jeff High to its executive team as part of its effort to coordinate activities between Gemvision and the diamond manufacturer. High will continue as president of Gemvision and leverage his knowledge and experience at Stuller in order to bring the full benefits of digital technology to the jewelry industry. Stuller and Gemvision formed a strategic partnership in 2009 with the goal of enhancing customization tools for retail jewelers. The partnership produced CounterSketch Studio, a 3D jewelry design platform that allows retailers to work alongside their customers in creating one-of-a-kind custom jewelry pieces.







Police Find Trader's Body in Mathura

Diamond trader Krishen Arya, who ran a diamond showroom, was kidnapped in Faridabad in Haryana, India on February 22. Police investigations led to a former employee, who under interrogation confessed to kidnapping Arya with three other men. It was also revealed that the men abandoned a plan to hold the trader for ransom, and instead murdered him and burned the body to hide evidence. Police found the body in a Mathura forest.











MINING


Firestone Puts BK11 on Ice

Firestone Diamonds suspended operations at its BK11 mine in Botswana due to operational challenges and current weaknesses in the diamond market, but the mining company said BK11 is designed for a rapid re-start. The mine, which launched production in late 2010, has been placed on care and maintenance with a monthly holding cost of approximately $65,000.







Petra Records a Loss

Petra Diamonds posted a net loss of $26.7 million during the fiscal half year that ended on December 31, compared with a profit of $24.5 million one year earlier. Higher sales this year are expected due to larger than normal inventory levels worth $38.1 million on December 31. Petra previously reported that revenues rose 13% year on year to $101.4 million during the first fiscal half.







Namakwa's Koa Production Update

Namakwa Diamonds is scheduled to launch production at its Kao mine in Lesotho this week as part of the first phase of commercial mining. Namakwa has recovered 11 diamonds in excess of 10.8 carats with a combined weight of 245 carats from Kao so far. In the period from January 1 to February 25, the company recovered 25,546 carats from the mine at an average size of 0.24 carats per stone.
Namakwa has sold 11,245 carats of rough from Kao on tender in Johannesburg at an average price of $237.60 per carat so far this year. A further 7,200 carats are currently on tender and another 8,400 carats will be tendered in early March.











ECONWATCH


Diamond Industry Stock Report

U.S. and Eurpean diamond-industry shares were moderately higher with Charles & Colvard and Theo Fennell both up 13%. Indian shares traded lower, except for Goenka (+13%). Mining shares were mostly negative except for Mountain Diamonds (+11%) and Gemfields (+10%). Read the extended industry stock report for this past week.

Mar. 1 Feb. 23 Chng.
$1 = Euro 0.750 0.750 0.000
$1 = Rupee 49.20 49.09 0.1
$1 = Israel Shekel 3.78 3.75 0.03
$1 = Rand 7.45 7.66 -0.21
$1 = Canadian Dollar 0.99 1.00 -0.01

Precious Metals
Gold $1,716.90 $1,780.10 -$63.20
Platinum $1,699.00 $1,720.00 -$21.00

Stock Indexes Chng.
BSE 17,583.97 18,078.50 -494.53 -2.7%
Dow Jones 12,980.30 12,984.69 -4.39 0.0%
FTSE 5,931.25 5,937.89 -6.64 -0.1%
Hang Seng 21,387.96 21,380.99 6.97 0.0%
S&P 500 1,374.09 1,363.46 10.63 0.8%
Yahoo! Jewelry 1,165.04 1,163.62 1.42 0.1%
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Rapaport Weekly Market Comment March 9, 2012


Global financial and commodity prices soften as European crisis persists and China, Brazil and India lower growth forecasts. Diamond markets stable with good U.S. demand but buyers remain cautious. Mixed expectations for large stone demand at Basel show. The RapNet Diamond Index (RAPI) for 1 ct. polished diamonds fell 1.8% to 94.18 in Feb. ALROSA's diamond sales +21% to $694M in Jan-Feb. Rio Tinto cuts number of Select Diamantaire clients to 13. Belgium's Feb. polished exports +4% to $1.4B, rough imports +2% to $1.1B. Botswana’s Jan. diamond exports -69% to $109M. Marange Resources appoints former Zimbabwe defense chief Tshinga Dube as chairperson.



RapNet Data: Mar. 8

Diamonds 867,456
Value $5,703,438,476
Carats 911,079
Average Discount -26.80%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS


March
8-15
Thu-Thu

Rapaport at Basel
Hall 3.1
Stand F01

Rapaport Contact: Alissa Goren
email: alissa.goren@diamonds.net


March
12-15
Mon-Thu

Rapaport Melee Auction
New York

email: auctions@rapaport.com


March
19-29
Mon-Thu

Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com





QUOTE OF THE WEEK
I have just returned from a month in the Democratic Republic of the Congo and I can say that Cartierís [grant for 'Development Diamond Standards' for artisnal diggers] is not just a vote of support for our work, it is a solid example of how the concept of corporate social responsibility has expanded beyond the immediate corporate environment to a wider world of development possibilities.

Dorothe Gizenga | Diamond Development Initiative Intl.






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. To get on the fast track, email your resume to careers@rapaport.com.









INDUSTRY


Prices Fall in Feb.

Certified polished diamond prices softened in February. Far East demand was steady, however, global buyers remain cautious. The RapNet Diamond Index (RAPI) for 1.00-carat polished diamonds fell 1.8% to 94.18, RAPI for 0.30-carat diamonds rose 3.6% to 16.04 and RAPI for 0.50-carat diamonds rose 0.9% to 34.81. The RAPI for 3.00-carat stones fell 2.1% to 343.32.

India's polished trade declined following the sudden government-imposed 2% import tax on polished diamonds. The recent stability of the rupee has partially restored consumer and trade confidence. Similarly, Israel's trading saw some renewed confidence after the taxation and police authorities agreed to suspend, for one month, their investigations into company transactions in the Israel Diamond Exchange. The inquiries stymied polished trading in the bourse through January and February.

Rough trading is weak due to high prices that are impacting cutter's profit margins. Read the latest Rapaport Research Report, "Showing Restraint" for further details.

RapNet Diamond Index (RAPI)
Feb. '12 Jan.-Feb. YOY %Chng. Mar. 1
1ct. -1.8% -2.9% 8.4%
0.3ct. 3.6% -0.4% -3.8%
0.5ct. 0.9% 1.2% 18%
3ct. -2.1% -2.4% 6.6%











Rio Tinto Narrows Select Membership

Upcoming Rio Tinto Select Diamantaires sales dates include, March 26 to 30, April 30 to May 4, June 11 to 15, July 16 to 20, August 27 to 31, October 1 to 5, November 5 to 9 and December 10 to 14. Two tender sales are scheduled for April 11 to 24 and October 10 to 23.

The following companies are part of the Select Diamantaire program for 2012 and represent seven fewer firms than one year ago.


Crossworks Manufacturing
Diambel
Dianco
Diarough
Dimexon Diamonds
E. Schreiber
Gemmata
IDH Diamonds
Interjewel
L&N Diamonds
Laurelton Diamonds
Sheetal Group
Venus Jewel










RETAIL & WHOLESALE


Prices Remain Higher Year-on-Year

WATCH NOW: An overview of diamond prices for February along with year-on-year comparisons. Gemfields' sales jumped 57% to $46 million as strong demand for ethical emeralds continued. Profits surged 42%. Cartier's new movie creates social media buzz as more than one million view it on YouTube.





Gitanjali Acquires LJJ

Gitanjali acquired Leading Jewels of Japan (LJJ) for an undisclosed amount with an aim to expand its business there. The deal was made through Gitanjali's Aston Luxury Group Ltd. subsidiary. Leading Jewels of Japan is involved in the production, sales, purchase, import and export of diamonds, precious stones, jewels and jewelry. Gitanjali also reported that its Milan-based subsidiary, Giantti ltalia S.R.L., has merged with its Valenza, Italy-based subsidiary, Leading ltalian Jewels S.R.L., as a part of the company's ongoing restructuring of its international business.







Cartier Funds Standards Program

Cartier International provided a grant to the Diamond Development Initiative International (DDI) to focus on implementing "Development Diamond Standards" for artisanally produced diamonds. In Sierra Leone, DDI is working with local leaders and civil society to identify sites where diamonds are produced in ways that are environmentally sound, and where diggers receive a fair price, working under safe conditions.

Those diggers' diamonds will be tracked through the trading, polishing and retail system to provide customers with gems that go beyond standard definitions of "ethical" and "fair trade" products. If successful, this pilot program stands to revolutionize the development prospects for miners -- where an estimated 15% of the world's gem diamonds are produced.

The Cartier grant will also provide general support, assisting DDI in several projects now under way, including human rights training in Africa, and a major registration project in the Democratic Republic of the Congo, which is bringing more than 70,000 miners into the formal sector.







CBRE to Rep Tiffany's Paris Flagship

CBRE France is representing the sale of 6 rue de la Paix, Paris, which houses Tiffany & Co.'s flagship and Kronmesser jewelers and is approximately 8,230-square-feet of retail space. Both jewellers committed to new long term leases. The building was put on the market for about $40 million. Rue de la Paix is a very prestigious address in Île-de-France.











GENERAL


Forbes Publishes Billionaries List

Forbes published its annual list of the world's richest players for 2012, which recorded 1,226 billionaires with an average net worth of $3.7 billion and a combined net worth of $4.6 trillion.

Here were the top billionaires involved, one way or another, in the diamond and jewelry industry:

Rank Name Company Net Worth
No.3 Warren Buffett Berkshire Hathaway $44B
No. 4 Bernard Arnault LVMH $41B
No. 26 Jeff Bezos Amazon $18B
No. 59 Francois Pinault PPR $13B
No. 122 Ralph Lauren Ralph Lauren $8B
No. 136 Nicky Oppenheimer De Beers $7B
No. 169 Beny Steinmetz Steinmetz Diamond Group $6B
No. 199 Johann Rupert Richemont $5B
No. 422 Jack Ma Alibaba $3B
No. 464 Laurence Graff Graff Diamonds $3B
No. 764 Lev Leviev Leviev Diamonds $2B











S.A. Dealers Club Re-elects Blom

The Diamond Dealers Club of South Africa election results:


Ernest Blom, chairman
Lionel Noach, vice chairman
M. Ellis, treasurer

Board members:
Manny de Amorim
Mark Reichman

Sarel Snyman
Trevor Temkin
David Woolf
J. Nortje
M.V. Moosa
N. Parag






IndexIQ Proposes Diamond Trust

IndexIQ filed a preliminary prospectus with the U.S. Securities and Exchange Commission proposing its IQ Physical Diamond Trust, an exchange-traded fund (ETF) backed by diamonds. The trust would only carry diamonds of "industry standard," one-caraters and create parcels, based upon characteristic variations. Investors in the trust will not receive the regulatory protections afforded to investors in regulated commodity pools. Diamonds will be held in Antwerp and a custodian will physically segregate the trustís diamonds†from any other diamonds which it owns, and will verify the diamond identities through GIA certificates.











MINING


ALROSA Sales +21%

ALROSA's sales of rough and polished diamonds in the first two months of 2012 rose 21% to $694 million. The company observed growing global demand for rough diamonds and it expects its first quarter sales of rough and polished diamonds to reach $1.123 billion.







Petra Joins FTSE 250

Petra Diamonds announced that the FTSE Group approved the inclusion of the company in the FTSE 250 Index. All constituent changes will be applied after the close of business on March 16 and will be effective on March 19.







Dube to Chair Maranage

Marange Resources has appointed Tshinga Dube, a former chief executive of the Zimbabwe Defense Industries (ZDI), as its chairperson. Dube is a senior ZANU-PF politician and is a member of the party's supreme decision-making body between congresses. He is also the director of several non-listed companies, according to the Financial Gazette.

Marange Resources is owned by the Zimbabwe Mining Development Corporation (ZMDC), both of which are under U.S. sanctions, and operates one of four concessions mining at Zimbabweís Marange fields. U.S. entities may not trade diamonds with either firm, and E.U. entities may not trade with ZMDC







Rani to Sell Stake in River Ranch

Dubai-based Rani Investment is reportedly negotiating the sale of its stake in the River Ranch Diamond Mine to Zimbabwe. The mine is located along the border with South Africa, near Beitbridge in southern Zimbabwe. Rani is owned by Saudi businessman Adel Aujan.







Dianor Negotiates New Terms

Dianor Resources entered into a mortgage forbearance agreement with its lenders on the surface rights for the Leadbetter diamond property. Dianor secured the original agreement in October 2008 and has since paid $2.55 million against a mortgage of $5 million. The balance of the mortgage to be paid under this agreement is $2.45 million plus accruing interest and other fees.

A forbearance agreement was also signed with Third Eye Capital Inc. for the payment of almost $1.3 million plus accruing interest and other fees arising from the $10 million credit facility entered into in August 2010.







Diamcor Results from Krone-Endora

Diamcor Mining recovered approximately 144 carats of rough diamonds from its Krone-Endora project near the Venetia mine in South Africa. Of the diamonds recovered, six of the stones were 1-carat or larger, with the two largest being recorded at approximately 3.93 carats and 2.09 carats.

The rough diamonds were recovered in conjunction with initial testing and commissioning work completed on the x-ray flow-sort final recovery modules being installed at the project.












STATS


Botswana

Jan. $Mil. %Chng.
Diamond exports $109 -69%






Belgium

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,370 4% $2,200 3%
Polished imports $1,250 41% $2,400 29%
Net exports $125 -75% ($216)

Rough imports $1,100 2% $2,100 0%
Rough exports $1,160 2% $2,200 -1%
Net imports ($92) ($30)

Net diamond account $217 $186










ECONWATCH


Diamond Industry Stock Report

Diamond-industry shares were moderately lower this week. Some exceptions were Sotheby's (+6%), Tiffany (+4%), Damiani (+7%), Peregrine (+6%) and Gemfields (+11%). Read the extended industry stock report for this past week.
Mar. 8 Mar. 1 Chng.
$1 = Euro 0.754 0.750 0.004
$1 = Rupee 50.18 49.20 1.0
$1 = Israel Shekel 3.77 3.78 -0.01
$1 = Rand 7.50 7.45 0.05
$1 = Canadian Dollar 0.99 0.99 0.00

Precious Metals
Gold $1,699.40 $1,716.90 -$17.50
Platinum $1,655.00 $1,699.00 -$44.00

Stock Indexes Chng.
BSE 17,145.52 17,583.97 -438.45 -2.5%
Dow Jones 12,907.94 12,980.30 -72.36 -0.6%
FTSE 5,858.73 5,931.25 -72.52 -1.2%
Hang Seng 20,900.73 21,387.96 -487.23 -2.3%
S&P 500 1,365.91 1,374.09 -8.18 -0.6%
Yahoo! Jewelry 1,171.60 1,165.04 6.56 0.6%
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Rapaport Weekly Market Comment March 30, 2012


Polished markets quiet but prices strong. Small DTC March sight estimated at $520M with prices +2% as sightholder contracts end. Indian rough demand improves but manufacturing still restrained. Rio Tinto explores sale of diamond business as 2011 production -15% to 11.73M cts. Russia’s 2011 diamond production +0.8% to 35.14M cts. but exports +37% to $3.8B. De Beers estimates global diamond jewelry sales +10% in 2011 with China +22%. Chow Sang Sang 2011 revenues +47% to $2.2B, profits +45% to $143M. Indian jewelers continue strike as govt. set to impose excise duty and raise import tax on gold.


RapNet Data: Mar. 29

Diamonds 871,460
Value $5,837,228,170
Carats 921,302
Average Discount -26.31%

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RAPAPORT ANNOUNCEMENTS


Apr-May
23-3
Mon-Thu


Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com



Apr-May
25-1
Wed-Tue


Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com



June
3
Sun


Rapaport Conference at JCK

Registration has opened for the Rapaport Conference at the JCK Las Vegas Show 2012.

RSVP now.




QUOTE OF THE WEEK
We regularly review our businesses to ensure they remain aligned with Rio Tinto's strategy of operating large, long-life, expandable assets. We have a valuable, high-quality diamond business, but given its scale we are reviewing whether we can create more value through a different ownership structure.

Harry Kenyon-Slaney | Rio Tinto Diamonds









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. To get on the fast track, email your resume to careers@rapaport.com.















INDUSTRY



DTC March Sight

De Beers raised prices an average of 2% to 3% at the Diamond Trading Company (DTC) sight this week as the mining company has curbed its rough supply in the first quarter of 2012. The March sight had an estimated value of $520 million and sight participants noted that rough demand has improved, particularly from Indian cutters, but they added that DTC boxes are considered expensive at the moment.

Rough premiums on the dealer market increased in the past two weeks as market sentiment improved following the Basel and Hong Kong shows. DTC boxes and ALROSA goods have been selling at an average 5% premium. Sightholders observed that the price increases mainly affected the Indian goods. DTC sales during the first quarter likely fell 13% year on year to $1.77 billion, according to Rapaport estimates.







KP Warns the Trade on Cameroon

The Kimberley Process is aware of a number of fake certificates coming out of Cameroon. Any document purporting to be a Kimberley Process certificate from the country should not be used and no rough diamonds may be imported from Cameroon into the territory of any Kimberley Process participant. Cameroon is not a member state, however, it is making progress toward compliance. The Kimberley Process will provide further notice when Cameroon has achieved participant status and is eligible to issue certificates and trade rough diamonds. Information regarding fake certificates should be sent to kpcs.chair@state.gov.







Protests Open Door for Tax Rethink

India's Finance Minister, Pranab Mukherjee, is re-considering his budget proposal to tax unbranded jewelry following major protests by local jewelers across the country. He is also examining the issue of making PAN card declaration mandatory for buying jewelry of more than $3,938 (INR 200,000) in cash.

There is no plan to bring the jewelers with a turnover of up to $984,640 (INR 50 million) within the tax limit and he held firm on the proposed customs duty for gold as the government seeks to reduce imports due to current account deficit. Indian bullion traders and jewelry retailers, unhappy with the finance minister’s plans have been on strike since March 17 to oppose the proposed measures. Trading groups across the diamond industry in Mumbai will remain closed on Friday in support of the protest.
















RETAIL & WHOLESALE



Diamond Jewelry Sales +10%

Global diamond jewelry sales increased by 10% in 2011 spurred by continued growth in China, according to De Beers research. The rate of growth was on par with the increase in 2010. De Beers concluded that sales were boosted by increased diamond prices, which apparently led consumers to seek lower-quality or smaller diamonds. China posted the strongest sales growth, rising by 22% during the year, and overtook India and Japan to become the second largest diamond market behind the U.S.

De Beers estimated that China has 11% of the global market share now, whereas the U.S. accounts for about 38%. U.S. consumers focused on buying 0.50-carat to 0.99-carat, H+, SI last year, whereas in China and Japan, the popular items were 0.18-carat to 0.49-carat, H+ with VS clarity in China and SI clarity in Japan. The strongest items in India were 0.02-carat to 0.07-carat, H+, VS-SI goods. Bridal dominated the market, particularly in the U.S. where bridal and engagement rings had a “clear lead” over diamond jewelry. Earrings were important in India and necklaces were big sellers in Japan, while both bridal and non-bridal solitaire products dominated sales in China.







Chow Sang Sang Profit +45%

Chow Sang Sang's revenue rose 47% year on year to $2.21 billion and profit increased 45% to $143.2 million for 2011. The company's jewelry retail sales rose 53% as sales in Hong Kong and Macau surged, while wholesale revenue jumped 31%. Inflation-curbing measures in China did not deter mainlanders from spending, whether they were at home or in Hong Kong. Chow Sang Sang maintained a positive outlook for 2012 despite economic uncertainties and high gold prices. The value of the company's inventory rose 27% to $800.3 million.








Kingold Profit +44%

Kingold Jewelry's fiscal year sales rose 51% year on year to $789 million, while cost of sales increased 52% to $747 million, for the period that ended on December 31. Net income attributable to shareholders jumped 44% to $26.2 million. Despite the strong performance, Kingold Jewelry noted a weaker fourth-quarter.







Movado Turns a Profit in 2011

Movado Group reported fiscal-year sales rose 22.5% year on year to $468.1 million for the period that ended on January 31. Cost of sales rose 6% to $211.8 million, which helped the retailer out of the red and to report net income of $32 million compared with a loss of $47.2 million one year ago. Movado's inventory as of January 31 fell 10% to $163.7 million.







U.S. Ring Budgets Drop Slightly

The average budget for an engagement ring in 2011 dropped 5% year on year to $5,130, according to the latest ''Real Weddings Survey'' produced by XO Group for TheKnot.com and the WeddingChannel.com. While the average in real dollars was less, the amount bought even less, for the U.S. consumer price index for jewelry in 2011 rose 9.5%. Nonetheless, the survey, which captured detailed budget plans of 18,000 couples who were active with the sponsoring websites, revealed that the average wedding budget (excluding the honeymoon) was flat year to year at $27,021.







SRS Mulls Selling Stake

SRS Ltd. revised the utilization of its initial public offering (IPO) proceeds and is considering selling a stake in SRS Jewells Ltd. The board will meet on March 31 to consider the plan. SRS shareholders approved a special resolution to revise the utilization of IPO proceeds in February. SRS has business interest in jewelry manufacturing, retail and entertainment.







Cartier Appoints New Chief

Stanislas de Quercize has been appointed the chief executive of Cartier and will replace Bernard Fornas at the end of this calendar year. De Quercize has been the chief executive of Van Cleef & Arpels since 2005 and will continue in that capacity until he assumes the new position. He has also had an extensive career within the group since 1989, working at Montblanc, Alfred Dunhill and Cartier where he held the post of president in the United States.







De Beers Retail Launches New App

De Beers Diamond Jewellers will launch a new bridal app for the iPad and iPhone in April, which will be available in five different languages, aim to help consumers discover engagement and wedding jewelry. The app will feature videos that give consumers expert advice on how to choose the best ring, information on the design and craftsmanship of De Beers jewelry, and the ability to locate the nearest De Beers Diamond Jewellers store to arrange an appointment.







Aaron Farber to Host Jewelry Artists of Quebec

The Aaron Faber Gallery in Manhattan will host the “Innovation and Craftsmanship in Metal: Jewelry Artists of Québec” exhibition from May 3 to May 26, featuring 14 of Québec’s jewelry artists along with their work. The exhibition was created in partnership with the Québec government office in New York and SODEC, the Québec government body that promotes synergy between business and culture.









U.S. Consumer Confidence Rises

U.S. consumer confidence rose 11% year on year to 70.2 points in March, according to The Conference Board. While the reading was still far below the important benchmark of 100 points, it was slightly lower than The Conference Board Consumer Confidence Index&reg; of 71.6 points in February. The Present Situation Index increased to 51 points from 36.9 points one year ago and the Expectations Index rose by two points to 83 in March.















MINING



Mining Progresses in Canada, Africa

WATCH NOW: Diamond miners and explorers from Canada and Africa updated shareholders on their progress. Lucara Diamond and Botswana Diamonds reported financial results and updated shareholders on key pipeline projects. Stellar Diamonds reported strong maiden resource estimates from its Tongo project. View the campaign materials from "Our Diamonds, Our Pride" a marketing effort developed by Debswana and the Botswana Export Development & Investment Authority.







Rio Tinto Considers Exit From Diamonds

Rio Tinto is considering exiting the diamond business, but it is very much business as usual in the states and countries where the company operates. The diamond market outlook is positive and discoveries are limited, but the company decided it was time to review its assets and explore ways to improve the value for shareholders.







Shore Gold's Loss Grows

Shore Gold recorded a net loss of $219.9 million or 98 cents per share for the fiscal year that ended on December 31. The company reported a loss of $26 million the previous year. Shore Gold registered impairment charges of certain previously capitalized exploration and evaluation assets of $208.4 million in 2011. The company sold some investments for $1.3 million during the year. Shore Gold held working capital of $15.9 million as of December 31, but it is actively pursuing financial options to go forward with its Star-Orion South diamond project.







Gemfields Sale Nets $26M

Gemfields conducted an auction of predominantly medium to high-quality rough emeralds in Singapore this past week and revenues came to $26.2 million, representing a price per carat of $38.25. The auction was 87% sold by lot and 94% sold by value. The next auction will be held in Jaipur in June.







Namdeb Funds New Mine

Namdeb expects to develop a new diamond mine at Sendelingsdrift, on the Orange River, and approved construction funding of approximately $36 million, according to fin24 news. Production is expected to yield 45,000 carats per year beginning in late 2013 with the life span of mine projected to be seven years.







India Seeks More ALROSA Rough

India is seeking more rough supply from Russia and pushed for and early close to ALROSA's supply contracts so that more Indian firms can apply for the next round of long-term contracts. The move would enable India's state-run trading company MMTC Ltd. and the Hindustan Diamond Company Private Limited (HDCPL) to apply for rough from ALROSA. The request was also made of Russia to formalize a way for Indians to buy from Gokhran.







De Beers Transitions Towns

De Beers and the Nama Khoi Local Municipality in South Africa announced the integration plan of Kleinzee, following a similar proclamation made for the town of Koingnaas in August. Both towns were established and managed by De Beers to cater to the company’s employees working at Namaqualand mines. Koingnaas is in the process of being integrated as part of the Kamiesberg municipality and Kleinzee will join the Nama Khoi Local Municipality. In anticipation of the transitions, De Beers has invested about $12 million (ZAR 90 million) in the refurbishment of municipal infrastructure to ensure that the towns are in a good shape when handed over to the respective municipalities.















ECONWATCH



Diamond Industry Stock Report

Diamond-industry related shares were largely mixed this week. Movado Group pulled ahead 11% after reporting strong results, Sotheby's was up 6%, European shares were lower and Indian stocks experienced volatile readings with Classic Diamonds (-11%) and Gitanjali (-12%) in negative territory while Goenka (+13%), Rajesh (+10%) and Vaibhav Gems (+17%) pulled ahead.
Read the extended industry stock report for this past week.
Mar. 29 Mar. 22 Chng.
$1 = Euro 0.750 0.758 -0.008
$1 = Rupee 52.40 51.22 1.2
$1 = Israel Shekel 3.73 3.75 -0.02
$1 = Rand 7.72 7.71 0.01
$1 = Canadian Dollar 1.00 1.00 0.00

Precious Metals
Gold $1,661.50 $1,643.60 $17.90
Platinum $1,627.00 $1,617.00 $10.00

Stock Indexes Chng.
BSE 17,058.61 17,196.47 -137.86 -0.8%
Dow Jones 13,145.82 13,046.14 99.68 0.8%
FTSE 5,742.03 5,845.65 -103.62 -1.8%
Hang Seng 20,609.39 20,901.56 -292.17 -1.4%
S&P 500 1,403.28 1,392.78 10.50 0.8%
Yahoo! Jewelry 962.39 975.89 -13.50 -1.4%
_______________
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HRD si dobre nakakalo do hniezda ,najviac propagovaný labák niektorými honorom sa hrdiacich naších spoločností aj v spoluučasti. :D
niet na GIA a IGI labáčiky ;)

RAPAPORT... Sources from the HRD confirmed that four gemologists were asked to resign this week and that an internal investigation is currently being carried out. An official statement released today stated that the graders left ''due to elements that have triggered an immediate internal, ongoing investigation concerning possible inappropriate conduct.''

According to statement issued, ''HRD Antwerp is fully committed to take appropriate actions in line with the results of the internal investigation which is still ongoing.''

Rumors have been swirling in Antwerp that the four in question were actively involved in bribery concerning the valuation of an undisclosed number of diamonds. Reportedly, five diamond firms could have been directly involved in the issue.

Georges Brys, the director of HRD Antwerp Lab, explained to Rapaport News, ''Contrarily to what may have been said in the press, the police aren’t at all part of our internal investigation, they aren’t involved yet at this stage. Obviously we questioned our legal department, but we must assess the situation, and then inform our board and the ISO committee. It’s only after those actions, that we’ll be able to take all necessary measures. We can‘t just fire people without informing the unions and giving them a sound motive.''

Brys concluded, ''I must insist that so far, all we have against our former graders is that they made a professional mistake. We have nothing to hide, and we’re not trying to hide anything. All we’re doing is making sure we know the circumstances and the facts.''
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Rapaport Weekly Market Comment April 20, 2012


U.S. polished demand stable, Far East improves ahead of May Day. ‎Strong Indian rough demand at Diamdel March auctions (90% sold by lot). Quarterly diamond production: De Beers -16% to 6.2M Cts., Rio Tinto +41% to 3.5M Cts., BHP Billiton -21% to 433K ‎Cts. Gem Diamonds 1Q prices +7%, Letseng sales -38% to $59M. LVMH 1Q jewelry, ‎watch sales of $827M, same-store sales +17%. Kristall 2011 revenue +28% to $567M. ‎Christie’s NY jewels sale $71M (95% sold by lot) with 9-ct. cushion, fancy vivid purplish-pink ‎diamond selling for $16M ($1.8M/Ct.). Sotheby’s NY sale at $43M (88% by lot) with 3.54-ct, ‎fancy blue diamond ring, selling for $2.4 ($687K/ct.). India’s March polished exports -47% ‎to $2.1B.‎


RapNet Data: Apr. 19

Diamonds 866,077
Value $5,887,485,882
Carats 924,051
Average Discount -26.39%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS


Apr-May
23-3
Mon-Thu


Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com



Apr-May
25-2
Wed-Wed


Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com



June
3
Sun


Rapaport Conference at JCK

Registration has opened for the Rapaport Conference at the JCK Las Vegas Show 2012.

RSVP now.




QUOTE OF THE WEEK
There has been a shift in the luxury goods business from Asia back to Europe. There was lower growth in Mainland China than there was for the overall [Chinese] customer base.

Jean-Jacques Guiony | LVMH









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. To get on the fast track, email your resume to careers@rapaport.com.















INDUSTRY



Record Jewelry Sales at New York Auctions

WATCH NOW: It was New York's spring jewelry auction week at Christie's and Sotheby's with both sales achieving strong results for signed and high-quality diamonds. In this video, view top sellers from Christie’s sale, which achieved $70,726,650 and was 95% sold by lot. The top lot was a 9-carat cushion-cut fancy vivid purplish-pink diamond ring, which sold for $15,762,500. Sotheby's total of $43,192,152 was a record for a spring sale and top lots included 16.58-carat and 17.50-carat emerald rings; a 3.54-carat marquise-shaped fancy blue diamond ring; a 20.21-carat sugarloaf cabochon sapphire and many more.







Diamdel's March Auction Sells 90% by Lot

Diamdel's latest rough auction, which it calls "Diamdel Days," was 90% sold by lot as demand held steady from emerging market buyers, especially from India. Demand for products in near-gem quality and grainer categories showed the greatest interest followed by 2-carat-plus products, according to Diamdel. While demand for small stones and large categories fell slightly from previous auctions, buyer appetite for these products remained robust at the highest levels witnessed since July 2011.















RETAIL & WHOLESALE



February U.S. jewelry Store Sales +19% to $2.7B

U.S. jewelry store sales in February rose 18.7% year on year to $2.69 billion, according to the government's calculations. For the first two months of the year, jewelry store sales have increased 13% to $4.42 billion. Meanwhile, the index for consumer jewelry price inflation in January was at a record high, reflecting price increases of 8% from one year earlier, and the index rose 6% in February. In other retail news, the government reported that advanced estimates of sales from department stores during March rose 3.7% to $14.72 billion. Retail trade sales rose 6.5% from one year earlier.







U.S. Jewelry Price Inflation +6% in March

The U.S. consumer price index (CPI) for jewelry rose 5.9% to 182.32 points during March, according to government figures. The index was higher than February's reading, but below the all-time high of 185 points set in January. The CPI for jewelry has now remained above 170 points for 15 consecutive months, reflecting higher operating costs at the counter along with rising wholesale prices of precious metals, diamonds and gemstones. Meanwhile, the CPI for all product categories combined in March rose 2.6% to 229.1 points, which established a new index high.







LVMH Reports 1Q Sales Jump 25% to Almost $9B

LVMH reported that first-quarter sales rose 25% year on year to $8.636 billion. On a comparable-store basis and using constant exchange rates, which LVMH defines as organic, sales improved 14%. Revenue from the group's watches and jewelry segment, which now includes Bulgari, rose to $827 million from $342 million. The jewelry business recorded organic revenue growth of 17%. LVMH expanded its store network in Asia and the new watches presented at Basel were very well received, according to the retailer.







Kristall's Revenue +38% in 2011, Profit +53%

Kristall's revenues jumped 38% year on year to $567 million, which was above the company's financial goal in 2011. Net profit surged 53% to $9.7 million and taxes rose 80% to $26 million. During 2011, Kristall opened a proprietary training center to help many of its 2,500 workers gain specialized skills and it invested $5.8 million in innovation and equipment.







Michael Hill's Sales +5% in First Three Quarters

Michael Hill reported that group sales rose 5% year on year to $322.3 million during the nine months that ended March 31, 2012. Same-store sales were ‎flat at $300.5 million due to declines in Australia, which accounts for ‎a large proportion of its sales. ‎ The retailer explained that third-quarter sales were satisfactory in New Zealand, Canada and the U.S., however, the ‎Australian market continued to be difficult for the group due to the ongoing tight retail ‎conditions.







Forevermark Launches FMX Trading Platform

Diamond brand Forevermark launched FMX, an online trading platform exclusively built for its partners to buy and sell Forevermark diamonds. FMX operates search and filtering functions along with individual listing details on the specifics of each diamond. Partners can set up custom notifications and automatically upload details of a stone after being graded by the Forevermark Diamond Institute in Antwerp.







India’s Gold ETF Assets More Than Double in March

The assets held under India’s gold exchange-traded funds (ETFs) more than doubled to ‎‎$1.93 billion in March 2012, from $857.5 million a year ‎earlier. In February 2012, total assets under gold ETFs were at $1.91 billion. ‎The number of gold ETFs in India have increased to 14 since the product was first ‎launched in early 2007. An ETF generally comprises a basket of securities, which ‎provide exposure to the market, and is traded on the stock exchange similar to a ‎company share.‎















MINING



Zimbabwe Pushes to Tap Idle Reserves

Zimbabwe embarked on an aggressive drive to gather historical information on its diamond resources to tap any areas of the country where diamond fields lay idle. The initiative comes as the government is working on a diamond policy and legislation to ensure maximum exploitation of the gems. Preliminary data collected finds possible untapped resources in Ngulube, Mwenezi and Triangle areas. Meanwhile, Development Trust of Zimbabwe (DTZ) OZGEO Private Limited, noted that it could reach full commercial diamond mining in Chimanimani by the end of this year as current exploration activities have been yielding positive results. DTZ's chief geologist, Mikhail Malykh, said since the start of trial mining in 2010, they had mined over 7,000 carats, and have drilled four diamond drill holes, totaling 200 meters, with the plan being to drill 24 holes, totaling 1,200 meters.







Peregrine Discovers Two Kimberlites at Lac de Gras

Peregrine Diamonds Ltd. discovered two kimberlites in the Lac de Gras region, Northwest Territories, Canada, which the company named LD-1 and LD-2. The core drill is now being moved to the third of five total targets between one and two hectares in size that are scheduled to be drilled before the program is completed in May. Samples from the LD-1 and LD-2 kimberlites will be sent to the Saskatchewan Research Council Analytical Laboratories for microdiamond testing by caustic fusion with results anticipated in the third-quarter of 2012.







Letseng's Prices Drop, Sales Slump

Gem Diamonds reported that sales of diamonds from the Letšeng mine in Lesotho fell 38% year on year to $58.7 million during the period January 1 through April 15, 2012 as ‎production focused on the lower-grade main pipe. ‎ The quantity of goods sold declined by 3% to 29,730 carats, while the average ‎price from the three tenders held during the period slumped 36% to $1,976 per ‎carat. First-quarter production at Letšeng, however, rose 6% to 28,114 carats.‎







Paragon Suspends Sierra Leone Operations

Paragon Diamonds has placed its Konoma alluvial mine on care and maintenance after ‎Sierra Leone requested the company reapply for its mining license for ‎the site. ‎The company said that it will seek clarification on “irregularities” the government alleged, noting that the licenses under discussions were issued as valid until April 2016. The company also announced that it has no further investments in Sierra Leone since the ‎cessation of operations, and has reduced its operating costs to the minimum necessary ‎to maintain its physical assets and the few remaining staff.















STATS



Diamond Production

Current Quarter YTD
Mil. Cts. %Chng. Mil. Cts. %Chng.
De Beers 6,208 -16% 6,208 -16%
BHP 0.433 -21% 1,371 -29%
Rockwell 0.004 -77% 0.017 -36%
Rio Tinto 3,518 41% 3,518 41%
Harry Winston 0.64 19% 0.64 19%








India

$Mil. %Chng. YTD $Mil. %Chng.
Polished exports $2,117 -47% $5,334 -42%
Polished imports $899 -73% $2,320 -71%
Net exports $1,219 92% $3,014 152%

Rough imports $1,459 23% $3,884 18%
Rough exports $229 26% $490 18%
Net imports $1,230 23% $3,394 17%

Net diamond account ($11) ($381)








Botswana

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Diamond exports $307 25% $416 -32%
















ECONWATCH



Diamond Industry Stock Report

DGSE shares were halted this week and the company may have to restate some financial data. U.S. and European retail shares were mainly lower with Blue Nile losing another 3%, LJ Intl. down 17%, Sotheby's off 3%, Tiffany and Zale shed 2%, LVMH and PPR lost 4%. Indian shares were mostly higher with C. Mahendra up 8%, Rajesh rose 7% and Goldiam up 5%. Read the extended industry stock report for this past week.
Apr. 19 Apr. 12 Chng.
$1 = Euro 0.760 0.758 0.002
$1 = Rupee 52.07 51.39 0.7
$1 = Israel Shekel 3.76 3.75 0.01
$1 = Rand 7.85 7.91 -0.06
$1 = Canadian Dollar 1.00 1.00 0.00

Precious Metals
Gold $1,642.40 $1,672.90 -$30.50
Platinum $1,577.00 $1,593.00 -$16.00

Stock Indexes Chng.
BSE 17,503.71 17,332.62 171.09 1.0%
Dow Jones 12,964.10 12,939.92 24.18 0.2%
FTSE 5,744.55 5,706.46 38.09 0.7%
Hang Seng 20,995.01 20,327.32 667.69 3.3%
S&P 500 1,376.92 1,383.04 -6.12 -0.4%
Yahoo! Jewelry 958.03 966.90 -8.87 -0.9%
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Rapaport Weekly Market Comment May 25, 2012


TRADE ALERT: CVD synthetic diamonds, diamonds triple treated to avoid detection and diamonds recut to match higher grade GIA reports being traded without disclosure. Kudos to IGI for detecting and exposing CVDs. We advise buyers to require “Natural Untreated Diamonds” be included on all invoices. Trading slow with low expectations for Vegas shows. Signet 1Q sales +1% to $900M, profits +9% to $83M. Tiffany ‎1Q sales +8% to $819M, profits +1% to $82M. Zale Corp. 3Q revenue +8% to $445M, net ‎loss of $5M vs. loss of $9M a year earlier.‎ Gitanjali 4Q sales +47% to $643M, net profit +8% to $19M. India’s April polished exports -35% to $1.3B, rough imports +20% to $1.6B.


RapNet Data: May 24

Diamonds 907,657
Value $6,006,463,015
Carats 964,916
Average Discount -26.32%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS


May-Jun
31-4
Thu-Mon


Rapaport at the Las Vegas Shows

Antique Jewelry & Watch Show at the Paris
May 31 to June 3 -- table at the front of the show.

JCK Las Vegas at Mandalay Bay Resort
June 1, 3, 4 -- Booth: B3557


Rapaport Breakfast and Conference
June 3 at the Mandalay Bay Resort

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

10 a.m. to 12 p.m. - Banyan Ballroom
Rapaport Fair Trade Jewelry Conference with award winning Zimbabwean human rights activist Farai Maguwu.

2 p.m. to 3 p.m. - Banyan Ballroom
Rapaport Certification Conference with RapNet insights into grading reports.

Last chance to register. The conference is free but seating is limited. Register online or email conference@diamonds.net or call: +1-702-893-9400


JCK Diamond Show Listings
In one fast search - you can find the diamonds that RapNet members are showing at the JCK show. Start your diamond search now.



June
7-13
Thu-Wed


Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com




QUOTE OF THE WEEK
Just looking at the one Graff customer, which accounted for 13% of sales in 2011, its revenue model is definitely an issue. Lack of brand recognition will also limit investor interest in Graff. Market conditions are very difficult, it’s surprising that they are trying to raise money. In this market, you need something that is cheap and a widely recognized brand.

Philippe Espinasse | 'IPO: A Global Guide'









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. To get on the fast track, email your resume to careers@rapaport.com.















INDUSTRY



IGI Finds Hundreds of Undisclosed Synthetic Diamonds

Several hundred man-made diamonds were sent to the International Gemological Institute ‎‎(IGI) in Antwerp and Mumbai to be certified as natural diamonds, raising concerns that a larger ‎volume of these undisclosed CVD synthetic stones may have entered the market already.‎ An unnamed polished dealer, who had bought the synthetic stones on the open market --at natural ‎diamond prices-- submitted the goods to IGI for certification about two weeks ago after he was ‎unable to sell them as a parcel on the dealer market. T‎he polished dealer and his supplier both claimed to be under the impression ‎that the goods were natural diamonds. IGI issued a trade alert to other laboratories regarding its findings, which can be viewed here.

Subsequently, the Diamond Trading Company (DTC) alerted sightholders that it has identified three recent instances of undisclosed ‎submission of CVD synthetics to grading laboratories in Belgium, India and China, whereby ‎each case had very similar characteristics and may have had a common source. ‎The DTC statement is here.

The Gem & Jewellery Export Promotion Council (GJEPC) also expressed their concern and affirmed a "zero tolerance'' policy on nondisclosure. Read GJEPC's statement here.















RETAIL & WHOLESALE



Zale, Gitanjali Sales Rise, HOF Opens its Store

WATCH NOW: Results from Zale's third fiscal-quarter were improved from one year ago, but the chain-store didn't increase sales more than the U.S. consumer price index for jewelry. Gitanjali, on the other hand, reported very robust sales and a surge in profit for its fiscal year. Hearts On Fire (HOF) launched its new concept store in Las Vegas. Ross-Simons launched its video series designed to help shoppers discover their inner style with jewelry accessories. Finally, the Hay Group reported a slight drop in turnover rates for the U.S. retail environment in 2011, led by fewer upper management changes, however, part-time and full-time floor staff rates rose. Hay Group suggests how to retain top talent at a time retailers are working feverishly to ensure profitability.







Tiffany's Sales +8%, Profit Flat

Tiffany & Co. reported that its first quarter revenue rose 7.6% year on year to $819.2 million for the period that ended on April 30. Same-store sales worldwide rose 4%, while profit was flat at $81.5 million. Sales only improved 3% in the Americas at $386 million, but jumped 16% --at a constant exchange rates-- in the Asia-Pacific region at $195 million and 13% in Japan at $142 million. Sales across Europe rose 7% as measured by local currency to $88 million. The retailer defined U.S. sales as disappointing.

In another development, Tiffany is in the process of negotiating future property rights with designer Elsa Peretti, who owns here intellectual property on jewelry that the company defined as a significant amount of revenue. The two parties are in the process of negotiating those rights, but if an agreement is not reached, Peretti might terminate the licensing agreement, ending a 38 year relationship with the jeweler.







Signet's Sales +1%, Profit +9%

Signet Group sales for its first quarter rose 1.4% year on year to $900 million in the period that ended on April 28. Signet's U.S. division sales rose 1.8% year on year to $751.5 million, while comparable-store sales rose 1.2%. In the U.K., sales rose 1.4% at a constant exchange-rate and same-store sales increased 1.2%. Despite weak sales performance, especially given the high rate of jewelry inflation in the U.S. this year, Signet did report a strong increase in profits, up 9.3% to $82.5 million.







Shree Ganesh's Sales Soar

Shree Ganesh Jewellery House Limited (SGJHL) reported that group sales rose 65% year on year to $376.4 million during its fourth fiscal-quarter that ended on March 31. Net profits more than tripled to $34.7 million during the period from $10.1 million a year earlier. For the fiscal year, the company’s net profit rose 57% year on year to $82.4 million, while net sales increased 73% to $1.8 billion. The company derives more than 85% of its sales from overseas markets such as the United Arab Emirates (UAE,) Singapore and Hong Kong.







Sears Reports 1Q Profit of $190M

Sears reported that its first quarter sales fell 2.8% year on year to $9.27 billion, however, the retailer improved gross margin to 27.7% from 26.7% for the period that ended on April 28. Furthermore, Sears reported a profit of $194 million, reversing its loss of $170 million one year ago. Net income per share rose to $1.78 compared with a loss of $1.53. The positive income results were indicative of Sears Holdings' strategy to manage the liquidity of their business and improve the company’s inventory management after suffering heavy losses in the past year.







Ultra-Wealthy Pick Graff as the Best

Ultra-wealthy U.S. shoppers ranked Graff Diamonds highest among 22 luxury jewelers in the 2012 Luxury Brand Status Index (LBSI) survey conducted by the New York-based Luxury Institute. With the top overall LBSI score of 7.98 out of 10, Graff ranked first on brand reputation and product quality considerations, scoring highest in evaluations of materials and craftsmanship. Graff is also the brand that those with assets of more than $5 million are most likely to deem worthy of charging premium prices. Graff was followed by the jeweler Asprey (7.82) and Mikimoto (7.77) as top three jewelers on the survey.







Rio Tinto Explores Diamond Demand in China

Rio Tinto commissioned global market research company Ipsos to better understand Chinese ‎consumer perceptions about jewelry comprising small, affordable diamonds, referred to as ‎fashion jewelry.‎ The research showed that Chinese consumers no longer see diamonds as purely a store of ‎wealth or bridal purchase. Rather, diamond fashion jewelry is also desirable and part of a ‎broader trend in China towards “affordable luxury.” These insights challenge the conventional wisdom that Chinese consumers only appreciate ‎large, high-quality, white diamonds or gold jewelry. Rio Tinto recently partnered with leading diamond jewelry manufacturer and retailer Chow Tai ‎Fook to promote diamond jewelry as fashion accessories.‎







Glendon Group to Acquire Bidz.com

Bidz.com entered into an agreement with Glendon Group Inc., which would take the online retailer private in an all cash acquisition of 78 cents per share. The share price represents a premium of 59.2% over the company's closing price of 49 cents per share on May 16. Bidz.com's board of directors approved the merger with one abstention. Under the agreement, Bidz.com is entitled to actively solicit alternative transaction proposals until June 25. The proposed transaction is expected to close in the fourth quarter of 2012, and is subject to certain closing conditions specified in the merger agreement.







Aston Luxury Group Acquires Distribution Deal

The Aston Luxury Group (ALG) has become the distributor for six Italian brands across the Americas, including Stefan Hafner, Nouvelle Bague, Valente Milano, Porrati, Io Si and Giantti. The deal was secured by ALG's parent company, Gitanjali Gems.







USPTO Approves Industry Trademarks

The U.S. Patent & Trademark Office (USPTO) approved three industry-related trademarks on May 15. Merit Diamond Corporation, which owns the ''SIRENA COLLECTION,'' (pictured) was awarded its trademark for that diamond brand, while The Gemological Appraisal Association (GAA) was given the trademark ''The Fingerprint System For Diamonds.” Retailer Fred Meyer Jewelers was also issued the trademark name “the Diamond Bridal Store.”















GENERAL



Element Six Opens Manufacturing Facility in CA

Element Six opened its first U.S. manufacturing facility in Silicon Valley, south of San Francisco, California. The facility will house employees in the production, technical and customer service fields, and will serve to establish a direct connection to Element Six technologies division’s customers and partners in the U.S. The company’s continued expansion into the U.S. market is in direct response to the growing demand and interest in synthetic diamond for commercial use in advanced technology applications. The company also recently announced the construction of the world’s largest and most sophisticated synthetic diamond supermaterials research and development facility near Oxford in the U.K.







Jewelry Makes Top-Loss Category in 2011

Jewelry losses by dollar value in the U.S. this past year surged to the top of the list of property insurance claims, according to a study done by Enservio. Jewelry claims rose from 13% among the top 10 contents-loss categories in 2010 to 17% for Replacement Cost Value (RCV) in 2011, surpassing electronics, which dropped to second place at 13%. the number of jewelry claims increased by 57% in 2011 and theft of jewelry, electronics and tools combined accounted for 62% of all RCV claimed for theft versus 35 percent for all other categories combined. Rings, watches and necklaces all maintained their ranking within the jewelry category as top loss-claim items.







GJEPC Plans Roadshows to Promote IIJS, IIJW

The GJEPC embarked on an awareness campaign targeting the ‎overseas markets for India International Jewellery Show (IIJS) and ‎India International Jewellery Week (IIJW), which takes place in August. The council has scheduled roadshows between May 23 and June 20, in Malaysia, ‎Singapore, Jeddah, Riyadh, South Korea and China and seeks to invite local jewelers from these ‎countries to view production capabilities and India’s expertise in jewelry manufacturing.







The Lazare Ongoma to Benefit Five Rand School

Lazare Kaplan International Inc. announced that retailers in its Lazare Diamond Incentive Program in the U.S will get a chance to also support The Lazare Ongoma Initiative (LOI), which works to raise awareness of the educational struggles in Namibia and improve resources available to the Five Rand Primary School in Okahandja. Lazare Kaplan will make a matching donation to The Five Rand Primary School in the name of its retail partners and associates for every registered Lazare Diamond.







Tiffany Promotes Hart to SVP

Tiffany & Co. appointed Andrew Hart to the newly-created position of senior vice president of diamonds and gemstones. Hart, 44, joined Tiffany as a vice president in 1999 and since 2002, he has been president of Laurelton Diamonds. Hart will continue to report to James N. Fernandez, the executive vice president and chief operating officer of Tiffany & Co.







Audemars Piguet Appoints Bennahmias

Audemars Piguet appointed Francois-Henry Bennahmias to the interim position of general manager to replace Philippe Merk, who has abruptly vacated the role as chief executive. According to a board statement, Bennahmias, 48, began his career at Audemars Piguet in 1996 and from 1997 he was assistant marketing and sales manager for Asia-Pacific and Europe. In 1999 he was promoted to president and chief executive of Audemars Piguet North America Inc. in New York.







Bangkok Gems & Jewelry Fair Starts Sept. 13

The 50th edition of the Bangkok Gems & Jewelry Fair (BGJF50) is scheduled for September 13 to 17. Organizers of the five-day fair expect to accommodate more than 3,500 exhibitors at the Impact Challenger Exhibition and Convention Center.
 

The fair is typically planned twice a year. The 49th edition, which was held in February, hosted 31,376 visitors of which 10,000 or so were from outside Thailand. The jewelry fair also features some 36 country pavilions.















MINING



Zimbabwe's Diamond Revenue Far Short of Target

Zimbabwe has received $293 million from rough diamond sales of 11.9 million carats by Mbada Diamonds since August 2010. Mbada Diamonds is 50% owned by the government through the Zimbabwe Mining Development Corporation (ZMDC), and has generated $592 million in sales since it went into operation in August 2010.

Zimbabwe's diamond revenue, however, has underperformed this year. According to the nation's finance minister, Tendai Biti. Biti, the treasury's revenue so far was $287.9 million against a target of $320.2 million, and diamond revenue of $30.4 million was far below the budget plan of $122.5 million. Additionally, Biti condemned diamond mining company Anjin for not remitting revenue or fees from its Marange operation; and he alleged a ''parallel government” was siphoning money away from the treasury through diamond revenue.







Rockwell Implements Strategic Equipment at Saxendrift

Rockwell Diamonds implemented a new in-field screen and a bulk x-ray and single particle sorter plant at its Saxendrift diamond mine. These two strategic projects were the first capital expenses approved by the company's board for implementation by the new management team. The in-field screen is designed to treat higher instances of sand and moisture, while maintaining the required processing rates. The bulk x-ray technology is aimed at improving concentrate efficiency and final sorting of diamond bearing ore and cost Rockwell $1.5 million. It began processing old recovery tailings at Saxendrift on April 16, and has recovered a total of 316 stones totaling 1,109 carats in the first month of production.







Rescue Underway for Illegal Miners

Rescue operations continue for a number of trapped diggers at the Namaqualand mines in South Africa after these abandoned tunnels collapsed on the men Tuesday. The diggers were operating illegally. Reports suggest three diggers were killed and as many as 15 still remained trapped. The tunnels were closed in April, however, there has been an increasing amount of illegal digging activity in the region. South Africa's ministry of mines ordered a task force to seal all access points at these mines to curb the illegal diamond digging.















STATS



India

Apr. $Mil %Chng. YTD $Mil %Chng.
Polished exports $1,334 -35% $6,668 -41%
Polishd imports $355 -76% $2,675 -72%
Net exports $979 82% $3,993

Rough exports $115 21% $605 19%
Rough imports $1,581 20% $5,465 18%
Net imports $1,466 20% $4,860

Net Diamond Account ($486.70) ($867.1)















ECONWATCH



Diamond Industry Stock Report

U.S. retailers and jewelers rebounded this week, while European shares continued to slide this week, and Indian firms had strong gains. Among the biggest gains for retailers were Movado Group (+19%), Zale (+11%), Blue Nile (+9%), Kohl’s (+7.8%), Macy’s (+7.3%), JCPenney (5.2%), and Saks (5.1%). Mining stocks were down across the board, especially True North Gems (-18.8%), Rockwell Diamonds (-10.4%), Stellar Diamonds (-5.1%), Shore Gold (-3.7%), Namakwa Diamonds (-3.4%), and Mountain Province (-2.4%). Only exceptions were Stornoway Diamonds (+2.5%), Gemfields (+2.4%), and Peregrine Diamonds (+1.7%). Read the extended industry stock report for this past week.
May 24 May 17 Chng.
$1 = Euro 0.798 0.790 0.007
$1 = Rupee 55.65 54.38 1.3
$1 = Israel Shekel 3.85 3.83 0.02
$1 = Rand 8.35 8.33 0.02
$1 = Canadian Dollar 1.02 1.02 0.00

Precious Metals
Gold $1,559.60 $1,573.70 -$14.10
Platinum $1,419.00 $1,449.00 -$30.00

Stock Indexes Chng.
BSE 16,222.30 16,070.48 151.82 0.9%
Dow Jones 12,529.75 12,442.49 87.26 0.7%
FTSE 5,350.05 5,338.38 11.67 0.2%
Hang Seng 18,666.40 19,200.93 -534.53 -2.8%
S&P 500 1,320.68 1,304.86 15.82 1.2%
Yahoo! Jewelry 913.67 933.88 -20.21 -2.2%
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Rapaport Weekly Market Comment June 8, 2012


JCK Las Vegas show exceeds low expectations with very good U.S. demand for affordable VS-SI certs and commercial goods. U.S. taking on role as leading market with steady but price sensitive consumer demand. Expensive large stone demand weak but Triple Ex cut certs selling well to Hong Kong. Polished prices steady with RapNet Diamond Index (RAPI) for 1 ct. -0.6% in May. Rough market cautious and cutting profit margins low. Expectations for another small DTC sight of around $550M with rising concerns that sightholders may start to reject goods. BHP Billiton prices estimated -7%. Harry Winston 1Q sales +34% to $193M, profit more than doubles to $12M.


RapNet Data: June 7

Diamonds 919,729
Value $6,082,623,728
Carats 979,382
Average Discount -26.69%

www.rapnet.com







Get Current Price List | Subscribe to Rapaport | Join RapNet



RAPAPORT ANNOUNCEMENTS


June
7-14
Thu-Thu


Rapaport Single Stone Auction
New York & Israel

email: auctions@rapaport.com



June
11-14
Mon-Thu


Rapaport Melee Auction
New York

email: auctions@rapaport.com




QUOTE OF THE WEEK
We are fully behind Rapaport's ethical jewelry campaign to make sure that the international ‎jewelry community is aware of where their diamonds are coming from.

Farai Maguwu | Center for Research and Development









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 Stable in May

Certified polished diamond prices were steady during May despite a weak global trading environment. The U.S. is providing market stability while consumer demand in India and the Far East has softened and uncertainty in Europe continues to reduce confidence. Liquidity is tight and manufacturing profit margins low. Rough prices remain unsustainable and are expected to decline.

In May, the RapNet Diamond Index (RAPI) for 1 ct. diamonds fell 0.6%. The 0.3 ct. category declined by 0.3% and the 0.5 ct. stones dropped 0.4%. RAPI for 3 ct. diamonds fell 1.6% during the month. Through the first five months of the year, RAPI for 1 ct. diamonds fell 1.7% and has declined by 4.5% from one year ago. Polished inventories are stable but trading levels are low with shortages of well-made polished goods, particularly fancy shapes and SI clarity rounds.

Indian cutters are slowly returning from summer vacation but manufacturing levels are below capacity. Polished buyers expect prices to soften due to the weak economic environment but suppliers are holding their prices firm due to expensive rough. Rapaport will release its May 2012 Research Report on June 11 providing additional information about the state of the global diamond market. The Rapaport Research Reports can be found at www.diamonds.net/report.








JCK Vegas Show Concludes

The JCK Las Vegas show ended on Monday with mixed reports from diamond ‎exhibitors. Overall, the show was okay. While it did not signal a significant boom in ‎trading, most left satisfied that the U.S. market is stable in the near term.‎ Square shape fancies were strong and selling at low discounts with larger ‎discounts for princess cuts. There is a shortage of well-made fancies in the ‎market. Rounds were weaker but prices were relatively firm. Clean makes, Triple Ex goods were in ‎demand with best demand for SI goods, with shortage in supply.‎ Polished suppliers are holding prices firm due to high rough prices and there is little to ‎no profitability on manufacturing.‎ Indians were largely absent from this show, Israeli buyers played a strong role but trading from Belgians was weak in the polished market.‎ Luxury jewelry producers reported strong sales from JCK, Couture and the Antique jewelry shows.







Rapaport Launches Ethical Pledge

Zimbabwean human rights activist Farai Maguwu urged jewelers and consumers to ‎be vigilant to verify the source of their diamond purchases. Maguwu endorsed the Rapaport ‎Group’s ethical pledge program launched during JCK, which was designed to encourage members of the diamond ‎and jewelry trade to insist on written assurances in their purchases.

The pledge would ensure that sellers have ‎investigated their sources and that the products offered are free of human rights ‎violations, significant environmental damage, illegal activities, or sanctions by U.S. or ‎E.U. governments.‎ Such sourcing would exclude Zimbabwe’s Marange fields, where the mines are part ‎owned by Zimbabwean government agencies, which are sanctioned in the U.S. and E.U.‎

Maguwu noted that while the struggle to end human rights violations at Marange is being ‎won, problems associated with Marange diamonds are far from over. He explained that ‎the biggest challenge currently is to ensure that revenue from Marange ‎production goes to the treasury and is used to benefit Zimbabwe's people. ‎ ‎Rapaport Group honored Maguwu with an award recognizing his work in advocating ‎human rights in Zimbabwe. Martin Rapaport, the chairman of the Rapaport Group, ‎acknowledged the extent to which Maguwu has risked his life to protect the lives, ‎freedom and human rights of diamond diggers at Zimbabwe's Marange mines. ‎

Sign the pledge now.















RETAIL & WHOLESALE



Fundamentals Continue to Signal Growth

WATCH NOW: Varda Shine, the Diamond Trading Company's (DTC) chief executive, discusses how market conditions are shaping the second half of 2012. In this video, she shares observations from the JCK Vegas show; Indian market conditions due to the weaker rupee; China's economic impact on rough demand; global price outlook for rough diamonds, and what DTC's move to Botswana represents in terms of southern Africa's emerging economy.







Industry's Next Gen Shines in Vegas Show Coverage

Trading activity aside, the JCK and Couture shows present an opportunity to report on how vendors are innovating design and business practices to improve their profit margins. As most of these videos show, the next generation of industry players have emerged and are taking risks and experimenting with new concepts -- whether that be in the manufacturing process or from how they sell direct to consumers. Select vendor name to watch the feature video.
• Jewelmer shares its production story for the golden pearl and launches a new collection featuring the floral/petal motif.
• Gebruder Schaffrath unveils its ring sizing solution with a duo-purpose diamond ring/bracelet and its Vendetta diamond collection.
• TW Steel expands its men's and women's watch collection in the U.S.
• Ernst Benz reveals two new collections that reflect partnership and passion behind watchmaking.
• Kirk Kara debuts 40 new designs and wins Jeweler's Choice award for an engagement ring at JCK 2012.
• Danhov debuts three new collections, featuring the increasingly popular petal design, and concludes this JCK show was its best to date.
• Lafonn debuts its new line of jewelry with Rhonda Faber Green to reach an alternative level of price points.
• Hearts On Fire details the psychology behind developing its new store concept in Las Vegas.
• Royal Asscher debuts its pop-up store concept and reports strong consumer sales.








Gitanjali Unveils Maya Jewels

Bollywood actors Emraan Hashmi and Kalki Koechlin unveiled the new monsoon collection of Maya Jewels by Gitanjali at its showroom at South Extension-1 in New Delhi. The actors also promoted their Hindi political thriller film ''Shanghai'' that will be released on June 8, at the launch. The latest collection is a blend of gold and diamond jewelry in various shapes that denotes the different flavors of the season, which can be worn with any attire, the company stated. The store offers a wide assortment of jewelry from brands such as Nakshatra, Asmi, D’damas, Parineeta, Nizam and Gili.







Using Social Media to Touch Consumers

The “2012 Social and Mobile Commerce” study, a joint research project by Shop.org, comScore, and The Partnering Group stressed the importance of social media for retailers since nearly two out of five online consumers follow retailers through social networking. The study found that social media space Pinterest has become a particularly big player in the social sharing game, with online U.S. consumers reporting that they already follow an average of 9.3 retail companies through that website compared with the average of 6.9 retailers they follow on Facebook and the 8.5 retailers they track via Twitter. Almost two out of five online consumers follow retailers through one or more social networking sites.

While Pinterest has grown into this space fairly recently, blogs, YouTube and Facebook still command the majority of consumers’ social activity. In particular, seven in 10 of those who follow a retailer’s blog click through to the website, and more than two-thirds of consumers use YouTube to browse and research a retail company. The main reason consumers follow retailers on social media -- locate product promotions. The amount of consumers searching for these promotions, however, has dropped to 51 percent from 58 percent in the past year. Four in 10 consumers also say they look for product information on social media, while 36 percent want to post/read comments about merchandise or services.

Additionally, around three in 10 consumers who follow retailers via social media say they are actively looking for information about events, current trends and ideas, or photos and videos, such as “how-to’s” and styling ideas, as well as expert opinions.







Blue Nile Launches in Japanese

Blue Nile launched a Japanese language version of its diamond retail website. The new website allows customers in Japan to shop Blue Nile's entire collection of diamonds and fine jewelry in their native language and pay for products using yen. Blue Nile began serving Japan in 2008, and has developed a loyal customer following over the past four years, according to the company. Shipping to Japan is free and most products arrive in approximately three days, according to Blue Nile.















MINING



Harry Winston's Profit Jumps

Harry Winston Diamond Corporation reported first quarter sales rose 34% year on year to $192.5 million for the three months that ended on April 30. Mining segment sales jumped 44% to $89 million while luxury brand segment sales, which include retail, increased 26% to $103.5 million. Harry Winston's profit improved to $11.6 million from $3.6 million one year ago.

The company's rough diamond sales improved due to a 116% year on year increase in the quantity of stones sold. Harry Winston reported selling 1 million carats of rough during the quarter, nearly twice as much as the previous year, however, the average price per carat fell 34% in part due to the company holding back higher-priced goods and selling off lower-priced inventory. Diavik ore production for the first calendar quarter consisted of 1.2 million carats produced from 0.39 million tonnes of ore from the A-418 kimberlite pipe, 0.2 million carats produced from 0.10 million tonnes of ore from the A-154 North kimberlite pipe, and 0.1 million carats produced from 0.04 million tonnes of ore from the A-154 South kimberlite pipe. Also included in production for the calendar quarter was an estimated 0.08 million carats from reprocessed plant rejects. Rough diamond production was 19% higher than the comparable calendar quarter of the prior year due to a combination of higher average grade and an increase in ore processed during the quarter.







DiamondCorp Lays Out Lace Production Plan

DiamondCorp expects its Lace mine production to reach 250,000 carats by 2014, more than 400,000 carats by 2015, and then 500,000 carats by 2025. SRK Consulting recommended that mining be initiated with a block cave on level 47 of the mine. DiamondCorp's chief executive, Paul Loudon, noted that it would take 18 months to mine down to that level. The first revenue from the mine is expected before the end of the first quarter of 2014 with full production to be reached in the second quarter of 2015.







Namakwa Recovers Rare Pink Diamond

Namakwa Diamonds recovered a rare 11.36-carat pink diamond and a 44.47-carat diamond at its North West Province alluvial mining operations in South Africa. The stones are among the top five diamonds recovered from the mining area in terms of value per carat in the rough. Namakwa noted that although the pink diamond has not been sold, it ranks alongside the 7.53-carat, vivid orange diamond discovered in October 2010 in terms of quality and rareness. As of the end of May 2012, the company reported that it produced 16,569 carats during fiscal 2012 with unit costs in line with expectations and average year to date sales prices at $764 per carat. The company expects its North West Province operations to produce 20,000 carats by the end of fiscal 2012.















ECONWATCH



Diamond Industry Stock Report

Diamond industry stocks were mainly lower this week. The biggest drops in share price hit Kohl's (-12%), Movado (-9%), Chow Sang Sang (-7%), Theo Fennell (-18%) and Peregrine (-12%). However Stellar (+16%), Suashish (+11%), Asian Star (+9%), Scio (+11%) and LJ Intl. (+12%) recorded strong gains. Read the extended industry stock report for this past week.
June 7 May 31 Chng.
$1 = Euro 0.794 0.798 -0.003
$1 = Rupee 54.90 55.65 -0.8
$1 = Israel Shekel 3.87 3.85 0.02
$1 = Rand 8.35 8.35 0.00
$1 = Canadian Dollar 1.03 1.02 0.01

Precious Metals
Gold $1,590.20 $1,559.60 $30.60
Platinum $1,439.00 $1,419.00 $20.00

Stock Indexes Chng.
BSE 16,649.05 16,222.30 426.75 2.6%
Dow Jones 12,461.03 12,529.75 -68.72 -0.5%
FTSE 5,447.79 5,350.05 97.74 1.8%
Hang Seng 18,678.29 18,666.40 11.89 0.1%
S&P 500 1,314.99 1,320.68 -5.69 -0.4%
Yahoo! Jewelry 907.56 913.67 -6.11 -0.7%
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Rapaport Weekly Market Comment June 15, 2012


Diamond markets under increasing price pressure as Indian liquidity dries up and rough prices too high relative to polished. U.S. market stable but demand insufficient to support unsustainably high rough price levels. DTC May sight estimated at $540M with re-assortments that adjusted prices upward for SI quality and lower for better qualities. Christie’s NY sells $14.6M (89% by lot) with 22.46 ct., E, VS2 diamond selling for $1.9M ($84K/ct.). U.S. April polished imports -17% to $1.4B, polished exports -13% to $1.2B. Belgium’s May polished exports -15% to $1.2B, rough imports -21% to $1.1B. Israel’s May polished exports -8% to $1B. Botswana’s April diamond exports -42% to $174M.


RapNet Data: June 14

Diamonds 934,525
Value $6,097,893,256
Carats 993,031
Average Discount -26.81%

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RAPAPORT ANNOUNCEMENTS


June
18-25
Mon-Mon


Rapaport Melee Auction
New York & Hong Kong

email: auctions@rapaport.com



July
9-19
Mon-Thu


Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com




QUOTE OF THE WEEK
Diamonds have been the flavor of the season, with top prices achieved in Geneva, Hong Kong and New York through spring 2012 as seasoned collectors and new economies went head to head for the best.

Rahul Kadakia | Christie's









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INDUSTRY



Christie's NY Auction Nets $14.6M

WATCH NOW: Christie's New York sale of Important Jewels, which was held on June 12, realized a total of $14,596,525 and achieved 89% sold by lot. The sale of watches garnered $8,495,988. See top lots from both auctions in this video. The top lot for diamonds was a 22.46-carat, E, VS2 diamond ring by David Webb that sold above estimate for $1,874,500. A 14.82-carat, E, VVS2 pear-shaped diamond fetched $1,594,500, well above estimate. Another diamond, a 15.65-carat, F, VS1 sold for slightly above estimate at $1,538,500 and a second David Webb ring, a 39.83-carat, VS1 fancy vivid yellow diamond sold within estimate at $1,426,500.







Rough Prices to Remain Flat in 2012

Rough diamond prices are likely to remain at current levels in 2012 given near-term economic uncertainty due to euro-zone debt crisis and the uncertainty of global economic growth, BMO Capital Markets projected. BMO estimated that rough diamond supplies fell 5% year on year to 127 million carats in 2011 due to production declines at De Beers and Rio Tinto’s Argyle mine, but it expects production is to rise again as development projects are brought on stream and De Beers catches up with its stripping programs. The firm projects that the rough diamond market will be valued at around $29 billion by 2020, up 53% from $19 billion in 2011. Meanwhile, the polished market is project to grow between 6% and 9% to reach more than $33 billion in total market value by 2020, driven by strong demand in emerging economies such as China and India and consistently stable demand in the U.S.







India’s Gold ETF Assets Double in May

The assets held under India’s gold exchange-traded funds (ETFs) nearly doubled year on year to $1.85 billion as of May 31, according to the Association of Mutual Funds in India (AMFI). Total assets under gold ETFs were at $1.83 billion in April 2012. The number of gold ETFs in India has increased to 14 since the product was first launched in early 2007.















RETAIL & WHOLESALE



U.S. Jewelry Store Sales -9%

Jewelry store sales fell 9.3% year on year in April to $1.996 billion, according to U.S. government calculations. Preliminary department store sales, which the government compiles quicker, were flat in the month of May at $14.576 billion. Both figures clearly reflected weaker consumer spending on jewelry and for general merchandise. Nonetheless, the U.S. estimated that total retail and food services sales for May rose 5.3% year on year to $404.6 billion. Retail trade sales rose 5% from one year ago.







U.S. Jewelry Inflation -1% in May

The U.S. consumer price index (CPI) for jewelry fell 0.7% year on year in May to 173.3 points. While the index's change was slight, it was a significant shift being the first price decrease since August 2009. May's reading followed a 0.5% year on year increase in April. The CPI is now at its lowest reading since March 2011, however, May was the seventeenth consecutive month of a reading above 170 points, reflecting historically strong commodity prices since 2008.







Indian Watch Market to Grow to $3B by 2020

India’s watch market is expected to grow at 15% every year to around $2.70 billion by 2020 driven by young consumers, the emergence of a strong middle class and a larger number of high-net-worth individuals, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM). Due to increased international travel, Indian consumers have become more aware of various brands available globally and are willing to purchase in India. However, with more international brands entering the Indian market to cater to the growing demand of fashion and luxury watch consumers, it has also created some challenges for local manufacturers. Still, local players still continue to dominate the Indian watch industry due to a solid manufacturing base and a wide range of price points.







LJ International Reports 1Q Loss

LJ International Inc. reported a net loss $2.87 million in the first quarter that ended March 31, compared with a profit of $3.3 million one year ago as expenses weighed on its performance. Selling, general and administrative expenses increased 65% to $24.2 million mainly due to an increase in investments in new store openings, marketing and branding campaigns, and professional fees for upgrades in internal control over financial reporting. Operating revenue increased 27% to $52.2 million and comparable store sales grew 17% year on year. Wholesale revenue fell 1% to $15.5 million. The company added six new ENZO stores expanding its retail network to 208 stores at the end of March 2012. LJ's store count further grew to 218 at the end of May 2012.







Kristall's Polished Diamond Tender Nets $2M

Kristall held its second exclusive polished diamond tender in Moscow from May 14 to 29 and reported that bidders were offered 55 stones, representing more than 190 carats. As a result of the tender, Kristall reported that 41 lots were sold, with 145.62 carats, for approximately $2.2 million. Kristall has schedule its next polished auction for September 2012.







Forevermark and Talos Select Damas

Forevermark appointed retailer Damas as its exclusive authorized jeweler in the United Arab Emirates (U.A.E.). Forevermark collections will soon be available at six Damas stores within the country. Damas has confirmed that it plans to increase the number of outlets that retail Forevermark diamonds to 13 by the end of this year. Luxury watch brand Talos also selected Damas to be its exclusive retailer across the Arab States in the Gulf (GCC). A number of different Talos watch collections, including its well known Volute collection, are now available at selected Damas outlets. All Talos watches are sold with diamond certificates, and the back of each watch is engraved with details about the diamonds used in each particular watch.







Amrapali Launches Ethical Emerald Collection

Amrapali launched an ethical emerald collection, Panna, which is a direct translation of the Hindi word for emerald. The collection features ethically-mined stones from Gemfields' Zambia licenses. Panna designs were inspired by collections the Maharajas once commissioned to the grand Maisons of Europe and feature cuffs, necklaces and chandelier earrings. The line will be available at the company own boutique as well as Harrods.















MINING



Trans Hex's FY Profit Jumps to $25M

Trans Hex reported a 15% year on year increase in revenue to $89 million for the year that ended on March 31. The cost of selling rough diamonds fell nearly 3% to $67 million. Trans Hex reported profit of $25 million compared with a loss of $5.3 million. During the year, production in South Africa's increased to 84,409 carats from 69,508 carats in the 2011 with an average price per carat sold at $1,200, up from $1,162 per carat in 2011. In Angola, production at Somiluana, in which Trans Hex holds a 33% stake, increased to 45,869 carats compared with 27,662 carats. Angolan operations achieved an average price of $446 per carat. Trans Hex expects production for the 2013 financial year to reach 80,000 carats out of South Africa, and 42,000 carats from Angola.







Lucara's Online Karowe Auction Nets $6M

Lucara Diamond Corp.'s first sale of Karowe diamonds through its new online auction system fetched $5.64 million. The company reported that 26,196 carats sold for an average price of $215 per carat and that sale was 86% sold by lot. A top lot included a 25.90-carat diamond, which achieved $130,070, or $5,022 per carat.







Shear Lowers Expectations for Jericho Sale

Shear Diamonds delivered 11,318 carats from its Jericho mine to its diamond marketing partner, Taché Company, to sell on the open market. Taché made an initial payment of $500,000 for the first parcel but recent declines in world rough diamond prices have resulted in a reduced expected price for the parcel. The company also noted that the recent drop in world diamond market prices will not generate sufficient cash flow to support operations. Shear must obtain financing in the very near term to fund continuing operations and to increase production by going to 24-hour by seven day a week processing.







Stornoway Reports Resource Estimate for Qilalugaq

Stornoway Diamond Corporation reported its first mineral resource estimate for the Q1-4 kimberlite pipe located at its Qilalugaq diamond project in Nunavut, Canada. Qilalugaq includes the Qilalugaq kimberlite pipes and the Naujaat system of kimberlite dykes and has been the focus of ongoing exploration and assessment work by Stornoway since it was optioned and subsequently acquired from BHP Billiton. A total inferred mineral resource for the Q1-4 kimberlite pipe was 26.1 million carats of diamonds from 48.8 million tonnes of ore. Additional resource upside has been identified in the form of a target for further exploration for the Q1-4 kimberlite pipe of between 7.9 million to 9.3 million carats.















STATS



Israel

May $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,040 -8% $3,320 -6%
Polished imports NA NA
Net exports

Rough imports NA NA
Rough exports $293 -31% $1,240 -33%
Net imports

Net diamond account $499 -6% $1,100 -2%







Belgium

May $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,181 -15% $5,695 -2%
Polished imports $1,207 -15% $5,671 5%
Net exports $154 -19% $24 -94%

Rough imports $1,111 -21% $5,620 0%
Rough exports $1,151 -22% $5,955 -3%
Net imports ($40) ($335) 30%

Net diamond account $194 -24% $359 -60%







U.S.A.

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,431 -17% $6,245 -9%
Polished exports $1,148 -13% $5,443 -4%
Net imports $283 -29% $803 -35%

Rough imports $27 -25% $147 -30%
Rough exports $15 -61% $125 -13%
Net imports $12 NA $22 -66%

Net diamond account $298 -24% $825 -36%







Botswana

Apr. $Mil. %Chng. YTD $Mil. %Chng.
Diamond exports $174 -42% $1,000 -30%















ECONWATCH



Diamond Industry Stock Report

Broad-based selloff for U.S. retail stocks and mining companies. Biggest drops were Lucara (-21%), Stornoway (-15%) and Petra (-11%). Read the extended industry stock report for this past week.
June 14 June 7 Chng.
$1 = Euro 0.794 0.794 0.000
$1 = Rupee 55.82 54.90 0.9
$1 = Israel Shekel 3.86 3.87 -0.01
$1 = Rand 8.37 8.35 0.02
$1 = Canadian Dollar 1.02 1.03 -0.01

Precious Metals
Gold $1,625.20 $1,590.20 $35.00
Platinum $1,492.00 $1,439.00 $53.00

Stock Indexes Chng.
BSE 16,677.88 16,649.05 28.83 0.2%
Dow Jones 12,651.91 12,461.03 190.88 1.5%
FTSE 5,467.05 5,447.79 19.26 0.4%
Hang Seng 18,808.40 18,678.29 130.11 0.7%
S&P 500 1,329.10 1,314.99 14.11 1.1%
Yahoo! Jewelry 898.72 907.56 -8.84 -1.0%
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Rapaport Weekly Market Comment June 22, 2012


Global markets quiet with increasing concern about global recession. Hong Kong show opens with low expectations as Far East demand remains sluggish. Rough prices declining with DTC boxes selling at discounts and some sightholders refusing to take goods. India remains highly problematic with tight liquidity and weak local demand. U.S. remains best market for polished. ALROSA 1Q sales +26% to $1.1B, net profit +8% to $386M with average prices for gem-quality stones +24% to $184/ct. India’s May polished exports -44% to $1.3B, rough imports -20% to $1.1B. Blue Star founder Vasantlal Laxmichand Mehta passes away.


RapNet Data: June 21

Diamonds 938,568
Value $6,040,348,640
Carats 992,114
Average Discount -26.60%

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RAPAPORT ANNOUNCEMENTS


June
18-25
Mon-Mon


Rapaport Melee Auction
New York & Hong Kong

email: auctions@rapaport.com



July
9-19
Mon-Thu


Rapaport Melee Auction
New York & Belgium

email: auctions@rapaport.com




QUOTE OF THE WEEK
Our sense is that the recent weak economic data has woken Beijing up to the real risk of a global downturn and a local downturn, so there is a sense of urgency in Beijing to turn things around. The spending...will be financing housing and infrastructure projects. Rail investment comes to mind. Unlike in 2008, it will not be financed through bank loans and local government entities, but, rather it will be financed directly by Beijing, by the central government with a fiscal surplus of $132 billion.

Frederic Neumann | HSBC Asia









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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



Failed States Index Lists Three Diamond-Producers

Foreign Policy magazine listed three diamond-producing countries in its top 10 most failed states index for 2012. The nonprofit group ranks nations annually for their stability, human flight and abuse, economic decline, security and external intervention measures. While Somalia was ranked the most failed state in 2012, and for the fifth consecutive year, due to lawlessness, ineffective government, terrorism, insurgency, crime and piracy, the Democratic Republic of the Congo took second place. Zimbabwe ranked fifth and the Central African Republic was ranked No. 10. Cote d'Ivoire made the list as well, but it ranked No. 11.







Rapaport Conference Videos

State of the Diamond Industry: In his annual JCK Vegas show address, Martin Rapaport, the chairman of the Rapaport Group, highlights diamond industry issues and global economic trends. In addition, Farai Maguwu, the director of the Center for Research and Development in Zimbabwe, discusses current conditions from the Marange. WATCH NOW

Where are Your Diamonds Coming From? In the Rapaport Fair Trade Diamond Conference, panelists identify ethical challenges facing the industry and discuss how to create a sustainable and responsible marketplace. Speakers include: Maguwu; Rapaport; Charles Stanley of Forevermark U.S., and Alan Martin of Partnership Africa Canada. WATCH NOW

The Rapaport Diamond Certification Conference discusses the state of diamond grading, global standards, how each lab identifies standards and how the role of certificates have evolved. Panelists include: Michael Cortez, founder of World Gemological Services; John Nichols of Huntington Jewelers and Maarten DeWitte of Embee Diamonds. WATCH NOW







Industry Groups Furthering the Cause

The Diamond Development Initiative (DDI) seeks public comment on its draft standards for the Development Diamonds™ ethical certification project until July 31. Jeff Corey, owner of Day’s Jewelers, and Dorothee Gizenga, the executive director of DDI, explain why retailers need to participate in protecting the artisanal and small-scale diamond miner. WATCH NOW.


During the Vegas show, the Diamond Empowerment Fund (D.E.F.) hosted its first pop-up booth outside JCK Luxury in its ongoing industry efforts to raise awareness for ''Diamonds for Good'' campaign. Dr. Benjamin Chavis, Nancy Orem Lyman, Nicola Breytenbach-Steiner and Joseph Munyambanza extol the program creating future leaders in diamond-producing countries. WATCH NOW.















RETAIL & WHOLESALE



Analyst Assigns a 'Buy' Rating to TBZ

Antique Stock Broking Ltd., which owns shares in Tribhovandas Bhimji Zaveri Ltd. (TBZ), issued a 'buy' recommendation and a target price of $2.84 (INR 158) per share. The brokerage considered TBZ to be a high-growth proposition given aggressive expansion plans. TBZ currently operates 14 retail stores and plans to add 43 showrooms by the end of fiscal year 2015. The analyst anticipated TBZ sales to grow at a compound annual growth rate of 42% to about $503 million during the next two years with earnings growth at 52% to about $24 million.







NY DDC, Dubai Multi Commodities Centre to Boost Trade

Ahmed Bin Sulayem, the executive chairman of the Dubai Multi Commodities Centre, and Reuven Kaufman, the president of the New York Diamond Dealers Club (DDC), announced an agreement to cooperate on a broad range of issues affecting their memberships. The two industry bodies have agreed to regular exchanges of trade delegations between the two centers, commencing with a New York delegation visit to Dubai in the fall. The fall trade mission to Dubai is for the mutual buying and selling of diamonds, an exchange that should prove beneficial for members of the industry in both centers. Additionally, the trade mission would facilitate the development of long-term business relationships among the participants.







WFDB Distinguishes SDX from DES

The World Federation of Diamond Bourses (WFDB) sought to clarify that the opening of the Singapore Diamond Exchange (SDX), a platform for private investors to invest in diamonds, should not be mistaken for the Diamond Exchange of Singapore (DES), which is the first Asian member of the WFDB. The SDX is operating within the Singapore FreePort and has no connection with the WFDB, according to the global body. The DES, however, is registered as a non-profit association in Singapore, was the very first diamond bourse in Asia to become member of the WFDB, back in 1980. The acronym “DES” and its logo are registered trademarks in Singapore. DES members are in no way associated directly or indirectly with the SDX, stated the WFDB.







Shrenuj to Open Manhattan Office

Shrenuj USA will be taking a full floor at 64 West 48th Street in Manhattan, a building owned by The Muss Development. The integrated diamond firm reportedly rented a 4,000 square foot showroom space with executive offices on the building’s 15th floor.







GIA Discusses Synthetics at DMIA Meeting

The Diamond Manufacturers & Importers Association of America (DMIA) hosted a synthetic discussion during their general membership meeting on June 18 in New York. The Gemological Institute of America (GIA) shared the latest measures in detecting synthetic diamonds. There have been many high-quality stones made through the CVD process in recent years and it is not something can be stopped, contended GIA. Synthetic diamonds are occupying a parallel market to natural stones, and while gemologically its becoming more and more difficult to identify CVD diamonds there are many ways in which to distinguish them. CVD diamonds, for example, have irregular black inclusions and dispositions of non-diamond carbon inside and they have a red orange fluoresce under an Ultra Violet (U.V.) light. Almost all of these identification methods, however, require lab-grade equipment and expertise. “There are non-lab devices, some better than others, that will give you an indication that you should test more, but no device will tell you outright,” said GIA's Tom Moses. “It is becoming a ‘refer to a gem lab’ situation more and more.”

While HPHT can create diamonds of all colors and sizes, the stones are more easily identifiable. The HPHT process requires metal catalysts to speed up production of stones, therefore many stones have recognizable metal inclusions, which if detected with a simple magnet confirms its orgin.









Blue Star Founder Vasantlal Mehta Passes Away

Vasantlal Laxmichand Mehta, the founder of the Blue Star Group and Arjav Diamonds, passed away June 17, in Mumbai at the age of 82. Having moved to Mumbai from Palanpur in 1947, Mehta started with humble beginnings. His career began as a diamond broker in Zaveri Bazaar. He founded Blue Star in Mumbai in 1966, and over the following decade, he brought his three sons, Akshay Mehta, Anuj Mehta and Ashit Mehta, into the business. Together they expanded the firm’s Indian and overseas operations. Described as a people's man, he has been an inspiration to not only his family and organization but also to thousands of others in the Palanpur samaj and diamond industry in India.







AWDC Elects Fischler as President

The newly elected board of directors of the Antwerp World Diamond Centre (AWDC) elected Stephane Fischler as its new president. The board also appointed Kaushik Mehta as vice president, representing the trade, and Philippe Barsamian as vice president representing the diamond bourses. Fischler said, "Antwerp has a unique people infrastructure and a unique pool of talent, in and outside our industry. Together, we must strengthen and promote our common and rich history for the benefit of all. I firmly believe we need to focus on further anchoring our industry in our local society; share the value of our entrepreneurship and global networks with Antwerp, Flanders and our country."







GIA Creates Scholarship for U.S. Veterans

U.S. military veterans will have access to new scholarships for advanced gemological education as part of the Gemological Institute of America's (GIA) 2013 international scholarship program. The scholarship application period will run through October 31. In addition, there is a range of other scholarships available for on-campus and distance education programs, as well as for lab classes. The 2013 application period marks the debut of the GIA Scholarship Fund for U.S. Veterans. Multiple scholarships for the Accredited Jewelry Professional degree through GIA’s eLearning distance education program are available. To qualify, applicants must include proof of U.S. military service, including reservists and National Guard personnel.















MINING



ALROSA Diamond Sales +27% in 1Q

ALROSA reported that diamond revenue rose 27% year on year to $1.1 billion in the first quarter of 2012 as prices strengthen and the volume of sales increased. ‎ALROSA’s total revenue increased 26% to $1.13 billion and its net profit ‎increased 8% to $386 million. The volume of sales of gem-quality diamonds rose 2% to 6.1 ‎million carats, the total volume of sales increased 4% to 9.5 million carats and ALROSA’s production fell 19% to 8.1 million carats. ‎

Additionally, ALROSA's supervisory board approved, in principle, the company's production development plan through the year 2021. The key objectives are to ensure that ALROSA’s growth is primarily driven by its core-business of diamond-mining; retain leadership in the world market; anticipate mineral replenishment needs; raise the company’s market value and implement investment projects to fund new facilities. The long-term plan also stipulates growing production volume from 34 million carats at present to an average annual target of 38 million to 40 million carats. The supervisory board also terminated Dmitry Mostovov, the former director of the Mirny Mining and Processing Division, from ALROSA's executive committee and appointed Ilya Ryashchin, ALROSA’s first vice president to the post.







Gemfields' Auction Nets $9M in Jaipur

Gemfields raised $9 million from its auction of predominantly lower-quality rough emerald and beryl in Jaipur between June 9 and June 13. The company offered 10.85 million carats for sale of which 3.47 million carats were sold. Twenty five companies attended the auction and 20 of these placed bids on the goods. The auction yielded an average of $2.61 per carat for the lots sold.







Rio Tinto Appoints Truter to Oversee Argyle Mine

Rio Tinto appointed Kim Truter as the managing director of the company's Argyle diamond mine in Australia, ‎effective July 1. Truter held a number of senior roles within Rio Tinto and most recently served as president ‎and chief operating officer of the Diavik diamond mine in Canada. He was instrumental in ‎leading the development of underground mining at the Diavik mine, the company noted.







Diamcor Commissions its Plant at Krone-Endora

Diamcor Mining Inc. completed the vast majority of construction and the installation of site infrastructure at its Krone-Endora at Venetia diamond project in South Africa. Next, Diamcor will process the remainder of ore concentrate material secured as part of the property's acquisition from De Beers, process new material that was recently mined and stockpiled, and conduct further testing in order to achieve new diamond valuation estimates. Following these exercises, Diamcor plans to focus on achieving targeted production through trial-mining exercises in effort to improve production for sale to its partner Tiffany & Co.















STATS



India

May $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,245 -44% $7,913 -42%
Polished imports $193 -88% $2,870 -74%
Net exports $1,051 59% $5,043 108%

Rough imports $1,135 -20% $6,600 9%
Rough exports $117 -25% $722 9%
Net imports $1,018 -20% $5,878 9%

Net diamond account $33 $835















ECONWATCH



Diamond Industry Stock Report

Stocks were largely mixed this week with U.S. retail taking the brunt of losses, while European retail made solid gains. Indian shares were mixed and mining shares were mainly lower. Read the extended industry stock report for this past week.
June 21 June 14 Chng.
$1 = Euro 0.797 0.794 0.003
$1 = Rupee 56.28 55.82 0.5
$1 = Israel Shekel 3.89 3.86 0.03
$1 = Rand 8.38 8.37 0.01
$1 = Canadian Dollar 1.03 1.02 0.01

Precious Metals
Gold $1,565.70 $1,625.20 -$59.50
Platinum $1,435.00 $1,492.00 -$57.00

Stock Indexes Chng.
BSE 17,032.56 16,677.88 354.68 2.1%
Dow Jones 12,573.57 12,651.91 -78.34 -0.6%
FTSE 5,566.36 5,467.05 99.31 1.8%
Hang Seng 19,265.07 18,808.40 456.67 2.4%
S&P 500 1,325.51 1,329.10 -3.59 -0.3%
Yahoo! Jewelry 905.83 898.72 7.11
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