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Týždenný prehľad zaujímavostí vo svete diamantov .

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RAPAPORT NEWS SERVICE | Dec. 14, 2012 www.rapaport.com | news@rapaport.com



Retail & Wholesale
Stats
India
EconWatch
Mining








Rapaport Weekly Market Comment Dec. 14, 2012


Polished markets stable with very good U.S. demand for SI qualities. Jewelers discounting heavily to drive final Christmas sales. Expensive De Beers sight estimated at $490M. Weak rough trading and low premiums as Indian cutters hold enough inventory for post-Diwali manufacturing. Christie’s NY sale at $32.5M (84% by lot) with rectangular-cut, 50.01ct, D, potential FL diamond selling for $8.4M ($167,400/ct.). U.S. Oct. polished imports -21% to $1.4B. Belgium’s Nov. polished exports -8% to $1.2B. Philippe Mellier, Varda Shine to address DMIA NY meeting. Caution: Prices for green, grey and brown tinted diamonds 10-15% below non-tinted. Green tint often indicates Marange origin.


RapNet Data: Dec. 13

Diamonds 1,014,663
Value $6,268,682,969
Carats 1,089,765
Average Discount -27.46%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS


December
16-19
Sun-Wed


Rapaport Single Stone Auction
Israel

View details.



December
18-20
Tue-Thu


Rapaport Melee Auction
New York

View details.



January
8
Tue


An Evening with Philippe Mellier and Varda Shine

New York City
Hosted by DMIA at 5:30 p.m.
Venue to be announced shortly.
Reservations are required.
Email Alla Sachakova for seating.
alla-at-williamfriedmandiamonds.com



QUOTE OF THE WEEK
Last-minute shoppers are looking forward to the four-day Christmas weekend this year to finalize their shopping plans before the big day, making sure to research everything from shipping deadlines to the best deals on apparel, jewelry and electronics. Budget-conscious consumers have taken advantage of retailers’ deals all season long, even after a strong showing Thanksgiving weekend, and could even look to the days after Christmas to find treasures in the clearance bins or new spring items that arrive that week.

Pam Goodfellow | BIGinsight









Careers@Rapaport




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















INDUSTRY



De Beers Broadens Term Supply Eligibility

De Beers Group invited eligible customer of its rough diamond auctions to apply for term supply for the remainder of the 2012 to 2015 supplier of choice contract period. De Beers opened the offer to create a more dynamic intention to offer (ITO) re-planning process. Sightholders and non-sightholders that have demonstrated sufficient demand through De Beers’ auction sales in 2012 will, subject to De Beers’ forecast rough diamond availability, have the opportunity to qualify for an ITO by submitting a contract proposal questionnaire (CPQ) as part of the 2013 ITO re-planning process. Eligibility includes having met mandatory financial and compliance requirements and demonstrating the requisite level of demand at De Beers’ auction sales in 2012 in categories of rough diamonds for which De Beers has sufficient forecast availability.








Mellier & Shine to Keynote at DMIA Meeting

The Diamond & Importers Association of ‎America (DMIA) will host and feature guest speakers Philippe Mellier, the chief executive of the De Beers Group and Varda Shine, the chief executive of the De ‎Beers Diamond Trading Company (DTC) as part of its general membership meeting on January 8 in New York. DMIA expects Mellier and Shine to make a comprehensive presentation about the De Beers Group of ‎Companies, diamond mining, polished markets, and the state of the international, as well ‎as the U.S. diamond and jewelry industry. ‎A large turnout is expected, so reservations are required and sought immediately by emailing Alla ‎Sachakova at alla-at-williamfriedmandiamonds.com. Venue details will follow shortly.‎















RETAIL & WHOLESALE



NY Auctions Net Strong Diamond Prices

VIEW THE TOP LOTS: The New York offices of Sotheby's and Christie's held their Magnificent Jewels auctions this past week and high-quality diamonds and gemstones achieved very strong prices. Sotheby’s sale totaled $64,765,013, the highest-ever for a day of jewelry sales in New York, with the top lot a 6.54 carat, internally flawless, fancy intense pink diamond ring by Oscar Heyman, that sold for $8,594,500, or $1,313,144 per carat. Christie’s sale realized $32,541,625 with strong sell-through rates of 84% by lot. The top lot was a 50.01-carat, D, potentially flawless, rectangular-cut diamond ring by Graff that sold to Laurence Graff for $8,370,500 or $167,400 per carat.







Most Shoppers Complete Gift Buying Early

The National Retail Federation (NRF) and BIGinsight concluded that so far this Christmas season, 20.8% of U.S. shoppers have made a jewelry purchase, which is slightly lower than the groups' prediction of 24%. Survey results also found that 56.5% of shoppers have completed gift buying, which is up from 46.5% compared with one year ago. More than half of the shoppers surveyed purchased apparel, 41.9% bought toys, 42.9% purchased books, CDs, DVDs and video games, 28.3% bought electronics and 14.6% purchased sporting goods or leisure items.

With only 10 days remaining before Christmas Day, of those who haven't completed shopping, 29.8% expect to finish by December 18 and 10.2% said they'd wrap-up gift buying on December 24.

U.S. online retail sales for the first 40 days of the Christmas shopping season through December 10, rose 13% year on year to $29.3 billion, according to comScore Inc. Green Monday, which fell on December 10, experienced a 13% increase as well and comScore predicted that it opened what would become the heaviest online spending week since tracking began. So far, the top categories for this season have been digital content and subscriptions, predominantly comprised of digital book, music and video downloads; toys; video game consoles and accessories; electronics and computer hardware.








Apollo Global Buys AURUM

Private equity firm Apollo Global Management, through its affiliates, will acquire AURUM Holdings Limited in the U.K. for an undisclosed sum. The portfolio of companies under the AURUM brand name includes Watches of Switzerland, Mappin & Webb and Goldsmiths. The acquisition is expected to close in the first quarter of 2013 and is subject to customary closing conditions. Apollo Global currently manages approximately $110 billion in private equity, credit and real estate funds to invest across a core group of nine industries.







PPR Acquires Qeelin

PPR acquired a majority stake in the Chinese fine jewelry brand Qeelin for an undisclosed sum. The transaction should be finalized in January. Qeelin was launched in 2004 and turns mythical and superstitious Chinese symbols into contemporary jewels. Qeelin operates 14 boutiques, seven of which are on Mainland China, four in Hong Kong and three across Europe, in addition to being carried by multi-brand stores, such as Colette in Paris and Restir in Tokyo. PPR expects to accelerate Qeelin's expansion, notably through store openings in China and Hong Kong.







Gitanjali Acquires Nirvana & Viola

The Gitanjali Group acquired the Nirvana and Viola Indian jewelry brands as the company ‎aims to enhance its share of the organized retail space. The acquisition was made ‎through Gitanjali’s subsidiary Spectrum Jewellery Ltd. for an undisclosed amount.‎ Nirvana is a 15-year-old brand with a focus on daily wear jewelry, ‎targeting professional women between the ages of 20 and 45 in tier I and tier II cities. Its ‎product range consists primarily of rings, earrings and pendants and at price points ranging ‎from $460 to $553 (INR 25,000 to INR 30,000). The brand has an active design portfolio ‎of 2,000 designs.‎ Viola is a relatively newer brand and offers colored stones by Italian designers and targets the occasional-wear and party wear markets, with price points ‎ranging from $553 to $921 (INR 30,000 to INR 50,000).







Shree Ganesh Partners With Rocks Creations

Shree Ganesh Jewellery House (I) Ltd. plans to set up a jewelry manufacturing ‎unit in Bangladesh as it expands its global market base. The company recently ‎entered into a joint venture with Rocks Creation Ltd. of Bangladesh to set up the unit with ‎a total investment of $9.2 million. Shree Ganesh will own 75% of the joint venture. The production capacity of the unit will be 200 kilograms of gold jewelry per year and the companies expect to employ and train 200 jewelry craftsmen.

Rocks Creation has retail, jewelry and textiles operations so it will provide the local support and infrastructure in Bangladesh to set up the factory and pipeline. Bangladesh is ‎designated as a beneficiary country under the U.S. Generalized System of Preferences ‎‎(GSP) program for jewelry, which will also enhance Shree Ganesh's market base.








Tiffany's 'Legacy of Diamonds' Opens in Dubai

Tiffany & Co. opens its special exhibit, ''A Legacy of Diamonds,'' at its flagship store in Dubai on December 13 as part of the retailer's 175th anniversary celebration. A Legacy of Diamonds showcases jewelry from the Tiffany archives and includes its icon -- the 128.54-carat Tiffany Diamond. The exhibition in Dubai will conclude on January 9. The Tiffany Diamond is considered to be one of the finest and most beautiful fancy yellow diamonds ever discovered. Its beauty symbolizes Tiffany's heritage and was reset in a diamond and platinum necklace for this anniversary exhibition. Additionally, the design features more than 100 carats of diamonds and includes 20 Lucida&reg; diamonds and 58 brilliant-cut diamonds, with a mounting of 481 sparkling stones, each hand cut and set by skilled artisans.







Helzberg Launches Proposal App

Helzberg Diamonds create a new smartphone application, the Proposal Pro™: A Complete Guide to Popping the Question, to provide its customers with help in navigating their way through the engagement experience. The mobile app advises users on points such as ''asking her parents'' to ''putting the perfect ring on her finger'' and supports an automated ring sizer. Proposal Pro offers information on how to select a ring, define the 4C’s and to plan a proposal. The app is available at iTunes and Google Play stores.







Jewelry Robbers Wreak Havoc Across LA

Five masked gunmen robbed Empire Jewelry & Pawn Shop in Moreno Valley, California Wednesday and shot a jewelry clerk before fleeing the scene with an undisclosed amount goods. The jeweler was rushed to hospital and remains in critical condition. The robbers engaged police in a high-speed chase across southern California, which resulted in the suspects separating to avoid capture. One gunman ended up in Watts where he was captured as a result of carrying out a carjacking. Four other suspects fled to the sprawling campus of California State University Fullerton where police surrounded the college, closed it down and successfully captured two suspects, but two others evaded authorities and remain at large.







U.S. Customs Seize $83M in Counterfeit Watches

The U.S. Customs & Border Patrol seized thousands of counterfeit designer watches, which had they been real would have been valued at $83 million. Nearly 7,800 watches where confiscated upon arriving in a truck at the World Trade Bridge that links Laredo, Texas and Nuevo Laredo, Mexico. The U.S. government determined that the watches infringed upon the trademark Audemars Piguet. In June, Customs seized a shipment of 4,200 fake Louis Arden and Audemars Piguet watches at the same border crossing and listed the retail value of those timepieces at $29 million had they been authentic. The Laredo port determined this latest seizure was the largest to date in terms of retail value.















MINING



Renard Sample Reveals High-Value Stone

Stornoway Diamond Corporation recovered a 9.78-carat rough diamond from ongoing processing at its Renard 65 bulk sample program and a preliminary valuation was given at $7,000 per carat. Stornoway defined this diamond as one of the most valuable stones ever discovered at the Renard diamond project. Further, the rough diamond was described as an unbroken white octahedral gem. The next largest diamond in the sample was 6.41-carats and it, too, was a white octahedral gem of high-quality with a preliminary valuation of $4,700 per carat. Approximately one third of the Renard 65 bulk sample's heavy mineral concentrate has now been processed and a total of 11 diamonds larger than 1.8 carats were extracted.







Tirisano Placed on Care & Maintenance

Rockwell Diamonds placed its Tirisano mine operations on care and maintenance as a result of persistent labor difficulties and ongoing losses incurred at the mine. Tirisano has been subject to persistent industrial relations issues regarding wage increases, despite the fact that the mine continued operating at a loss. The labor issues are being dealt with in compliance with the Labour Relations Act (LRA) of South Africa, according to Rockwell. Challenges at Tirisano have been exacerbated by operational complexities and slower than anticipated price recovery for the smaller diamonds that make up a large part of the mine's production. With operations at Tirisano suspended, the company will focus on its high potential Saxendrift and Klipdam projects in the Middle Orange River region.







Gemfields Acquires Ruby Deposit

Gemfields plans to acquire a controlling interest in an additional ruby deposit located adjacent to the company’s Montepuez ruby mine in Mozambique. The initial acquisition includes 75% of one exploration license with a one-year option to acquire 75% of a second license for $1.75 million each. The mining titles would provide a platform, alongside the Montepuez deposit, for the expansion and development of Gemfields’ Mozambique operations. Small-scale and informal mining within the targeted licenses has already taken place and the current vendor is seeking to expand its operations. The deal is subject to government approval.















STATS



Belgium

Nov. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,153 -8% $12,213 -9%
Polished imports $1,035 -11% $12,129 -6%
Net exports $118 34% $84

Rough imports $1,100 10% $11,323 -11%
Rough exports $1,044 -11% $12,124 -8%
Net imports $56 ($801)

Net diamond account $62 -76% $884 20%







U.S.

Oct. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,441 -21% $16,416 -12%
Polished exports $1,120 -5% $14,044 -7%
Net imports $321 -48 $2,372 -34%

Rough imports $27 -27% $404 -21%
Rough exports $20 -13% $258 -25%
Net imports $7 -50% $148 -10%

Net diamond account $328 -49% $2,520 -33%















ECONWATCH



Diamond Industry Stock Report

U.S. retail was mixed as JCP (+15%) led gainers, but Blue Nile (-3%), Movado (-7%) and Zale (-7%) zapped the jewelry index. European retailers were all lower, Indian shares were lower except for Classic Diamond (+13%) and C. Mahendra (+3%). Mining shares were mixed but Stornoway (+26%) and True North (+29%) posted the best performance. Read the extended industry stock report for this past week.
Dec. 13 Dec. 6 Chng.
$1 = Euro 0.760 0.771 -0.011
$1 = Rupee 54.49 54.14 0.4
$1 = Israel Shekel 3.79 3.83 -0.04
$1 = Rand 8.67 8.68 -0.01
$1 = Canadian Dollar 0.98 0.99 -0.01

Precious Metals
Gold $1,696.90 $1,698.90 -$2.00
Platinum $1,612.00 $1,596.00 $16.00

Stock Indexes Chng.
BSE 19,229.26 19,486.80 -257.54 -1.3%
Dow Jones 13,170.80 13,074.04 96.76 0.7%
FTSE 5,929.61 5,901.42 28.19 0.5%
Hang Seng 22,445.58 22,249.81 195.77 0.9%
S&P 500 1,419.45 1,413.94 5.51 0.4%
Yahoo! Jewelry 1,119.48 1,132.41 -12.93 -1.1%
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RAPAPORT... ALROSA has started a stripping operation at its Botuobinskaya diamond pipe, the first phase in developing the deposit to prepare it for mining minerals.

The stripping operations will last for three years with commercial diamond mining at Botuobinskaya expected to begin in the fourth quarter of 2015, the Russia-based miner stated.

ALROSA said that the diamond pipe will be worked out as an open pit, while its ore will be processed at the existing facilities of Nyurba GOK, a mining and concentrating mill. The open-pit mine will produce about 1.5 million carats annually after Botuobinskaya reaches its design capacity of 300,000 tonnes of ore per year, the company noted.

Botuobinskaya, which is located 3 kilometers from the currently mined Nyurbinskaya diamond pipe, has an estimated diamond reserve of more than 70 million carats given its diamond grade is 5.13 carats per tonne, ALROSA noted. Botuobinskaya diamonds are characterized by a high proportion of gem-quality and near-gem-quality stones having a high degree of transparency.

ALROSA has included the mining operations to be launched at Botuobinskaya in its long-term development plan until 2021. The company expects Botuobinskaya will setmake up for dwindling ore production at Nyurbinskaya where mining began in 2000. :shock: :shock: :roll:
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RAPAPORT NEWS SERVICE | Dec. 28, 2012 www.rapaport.com | news@rapaport.com



Retail & Wholesale
General
India
EconWatch
Mining








Rapaport Weekly Market Comment Dec. 28, 2012


Caution: Automatic Jan. 1 U.S. tax hikes may significantly reduce diamond ‎demand. News: U.S. holiday sales disappoint as consumer confidence slides on ‎stalled budget talks. Final effort to beat fiscal cliff deadline expected but inevitable tax hike will ‎reduce 2013 jewelry demand. MasterCard Advisors SpendingPulse reports Nov./Dec. ‎retail sales +0.7% vs. +2% in 2011. comScore says online sales +16%. Diamond trading ‎quiet as U.S. and Belgian markets close for Christmas break and Indian manufacturing ‎cautiously resumes after Diwali. Israel and other markets focusing on Far East Chinese ‎New Year demand.


RapNet Data: Dec. 27

Diamonds 974,972
Value $6,178,135,631
Carats 1,054,527
Average Discount -27.43%

www.rapnet.com







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RAPAPORT ANNOUNCEMENTS





The Rapaport Group
wishes you and yours
a happy, peaceful,
healthy and prosperous
New Year.







January
21-29
Mon-Tue


Launching Rapaport Jewelry Auctions

Closeout and Estate Jewelry

January 21-25, New York
January 28-29, Miami
Excellent Buying Opportunities

For more information, please call +1-702-893-9400


January
8
Tue


An Evening with Philippe Mellier and Varda Shine

New York City
Hosted by DMIA at 5:30 p.m.
Venue to be announced shortly.
Reservations are required.
Email Alla Sachakova for seating.
alla-at-williamfriedmandiamonds.com



QUOTE OF THE WEEK
Christmas shopping season experienced only marginal growth when compared to the 2011 season. The Northeast, Mid-Atlantic and North Central regions of the country all lagged the national average growth, while the southern and western regions of the country experienced more positive holiday shopping seasons. You really did have two kinds of results, depending on the region -- one had a relatively negative season, while the other was more in line with the lower-end of expectations. And between the two, even with all the negative headwinds, the country managed to gain slightly over last year.

Michael McNamara | MasterCard Advisors SpendingPulse









Careers@Rapaport




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















RETAIL & WHOLESALE



Retail Sales Growth Slows to a Crawl

A SpendingPulse report by MasterCard Advisors found that, from October 30 to December 24, U.S. consumers increased their spending by 0.7% year on year for categories such as jewelry, apparel, electronics, online, luxury and furnishings. The measure excluded autos, food and fuel. SpendingPulse noted that online sales for those same categories grew only 8.4% year on year with the strongest products being specialty apparel and electronics.

The Christmas-season, as measured from about November 1 through January 1, initially experienced steep sales declines in the northeastern U.S. due to storm damage, but then sales recovered when promotional activity stimulated growth, the group concluded. However, across the nation, growth subsided in the first half of December with several areas returning to negative growth year on year. Finally, sales improved again for the final two weeks before Christmas.

Meanwhile, comScore observed that Christmas-season retail sales from November 1 through December 22 jumped 16 percent year on year to $38.7 billion and that rate of growth was in line with expectations.

WATCH WEEKLY SALES RECAP








Theo Fennell Narrows Loss

Theo Fennell reported that revenue fell 8% year on year to $7.9 million for the six months that ended on September 30. The cost of sales was nearly 7% lower at $3.7 million and the luxury jeweler lowered its loss to $987,000 from $2.3 million one year earlier. Theo Fennell is in ongoing discussions with EME Capital about a potential takeover and it will inform the market when there are further developments to report.







NRF Warns of Fiscal Cliff Impact

The National Retail Federation (NRF) estimated that U.S. retail sales in 2013 would fall flat for the year, following a contraction in the first half, if middle-class tax increases go into effect as a result of inaction on the so-called fiscal cliff. However, if Congress and the White House reach a deal to avoid automatic tax increases on December 31, the NRF's chief economist, Jack Kleinhenz, estimated that retail sales would increase between 2% and 2.5% year on year for 2013.








Sterling, Zale Trade Barbs in Court

Sterling Jewelers charged that Zale violates the Lanham Act with its Celebration Fire tagline, the ''most brilliant diamond'' in the world, but Zale argued that Sterling makes similar claims with its own branded diamonds. Expert witnesses for plaintiff Sterling argued that Zale could only make a brilliant claim if each Celebration Fire diamond was indeed the most brilliant. Defendant Zale argued that Sterling's witnesses collaborated in the case simply for competitive reasons. Zale has requested a trial by jury.

Read the latest court summary briefs:
Sterling Says Zale Misinterprets an Advertiser's Legal Burden

Zale Says Sterling Misleads With Its Own Diamond Claims

Sterling Says Consumer Expectations Exceed Zale's Claim








U.S. Consumer Confidence Flat

The Conference Board's Consumer Confidence Index was basically flat year on year at 65.1 points (1985=100) for December 2012, but the group noted a sharp drop from November's reading of 71.5 points. Nonetheless, the Present Situation Index rose 34% year on year to 62.8 points. The Expectations Index, however, fell 13% to 66.5 points. The group observed that the pending fiscal cliff negotiations worried consumers most.








JJS Attracts Strong Attendance

The tenth edition of the Jaipur Jewellery Show (JJS) in India, also known as the December Show, experienced higher traffic than one year ago and exhibitors reported good inquiries from buyers. Jewelry demand was relatively better than diamonds, however. Organizers estimated more than 30,000 visitors participated in the show and some 290 exhibitors were present to serve.








L'Azurde Opens Flagship Store

Saudi Arabia-based jeweler L’Azurde expects to invest $26.7 million in expanding it diamond store network, tripling the number of locations to 30 in the next three years. L’Azurde reported an annual growth rate of more than 30% this past year. The brand opened a new flagship store in Riyadh on Olaya Street this past week.
















GENERAL



Groupon Acquires Channel Solution

Groupon acquired CommerceInterface, a provider of web-based channel management technology that serves manufacturers, distributors and retailers to manage online sales. Terms of the deal were not disclosed. Groupon said it has been using CommerceInterface technology since April 2012 to streamline its own operations and automate interactions with vendors. As part of this deal, CommerceInterface will no longer serve other retail channels and current customers will have the option to transition to other vendors over the next six months with migration support from the company.







YES Bank Adopts Commodity XL Solution

YES Bank licensed Triple Point Technology's Commodity XL for Precious Metals software to manage its gold and silver bullion wholesale and retail distribution operations in India. YES Bank serves corporate and retail customers at more than 380 branches in 275 cities. The software provides an enterprise solution to seamlessly manage all aspects of the precious metals supply chain at YES Bank, while supporting regulatory compliance, according to the companies. Commodity XL provides a real-time, enterprise-wide view of exposure and automatically generating compliance documentation for national or international trade.







Runci Retires From JA

Matthew A. Runci, the president of Jewelers of America (JA) for more than 17 years, will retire on December 31. David J. Bonaparte, formerly the vice president of JCK Brands for Reed Exhibitions, will take the helm of the national jewelry trade association effective January 1. The two men have worked together since October to ensure a smooth transition of leadership. Bonaparte will focus on continuing JA's public policy work, in addition to enhancing its membership, both in terms of size and benefits.















MINING



ALROSA Acquisition Expands Production

ALROSA acquired a 51% stake in alluvial diamond miner Nizhne-Lenskoye for $119 million and it will provide additional production of two million carats a year. Nizhne-Lenskoye mines alluvial diamonds near operations overseen by ALROSA's subsidiary Almazy Anabara. The company has estimated diamond reserves of 26.4 million carats and its existing and expected mineral resources are sufficient to maintain diamond mining for 17 years.

ALROSA also began strip mining operations at its Botuobinskaya diamond pipe, the first phase in developing the deposit to prepare it for mining minerals. Stripping will continue for three years, with commercial diamond mining at Botuobinskaya expected to begin in the fourth quarter of 2015. The diamond pipe will be worked as an open pit, while its ore will be processed at the existing facilities of Nyurba GOK, a mining and concentrating mill. The open-pit mine will produce about 1.5 million carats annually after Botuobinskaya reaches its design capacity of 300,000 tonnes of ore per year. Botuobinskaya has an estimated diamond reserve of more than 70 million carats given its diamond grade is 5.13 carats per tonne.
















ECONWATCH



Diamond Industry Stock Report

U.S. retail shares took a bath as investors noted weaker-than-expected preliminary Christmas sales. Birks -9%, Blue Nile -5%, Signet -4%, Zale -8%. European shares were lower, but not much worse than flat. Indian shares were mixed, Classic -10% but C.Mahendra +10%, Goenka -4% but Goldiam +3%. Mining shares were slightly higher except for Rockwell -8%, Harry Winston -5%, Stellar -7% and Stornoway -1%. Read the extended industry stock report for this past week.
Dec. 27 Dec. 20 Chng.
$1 = Euro 0.755 0.755 0.000
$1 = Rupee 54.95 54.86 0.1
$1 = Israel Shekel 3.73 3.74 -0.01
$1 = Rand 8.49 8.48 0.01
$1 = Canadian Dollar 0.99 0.99 0.00

Precious Metals
Gold $1,664.00 $1,648.50 $15.50
Platinum $1,532.00 $1,546.00 -$14.00

Stock Indexes Chng.
BSE 19,323.80 19,453.92 -130.12 -0.7%
Dow Jones 13,096.31 13,311.72 -215.41 -1.6%
FTSE 5,945.30 5,958.34 -13.04 -0.2%
Hang Seng 22,619.78 22,659.78 -40.00 -0.2%
S&P 500 1,418.09 1,443.69 -25.60 -1.8%
Yahoo! Jewelry 1,101.57 1,116.13 -14.56 -1.3%
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Rapaport Weekly Market Comment Jan. 4, 2013


Diamond prices stabilize in December easing sharp declines for the year: 2012 RapNet Diamond Index (RAPI™) for 1ct. -12.5%, 0.3ct. -7.4%, 0.50ct. -11.1%, 3ct. -11.6%, Rapaport Melee Index (RMI™) +2.3%. Diamond buyers conservative as higher U.S. taxes expected to reduce luxury spending in 2013. Expectations rise for Chinese New Year as China’s economic outlook improves. Israel’s 2012 polished exports -23% to $5.6B, rough imports -13% to $3.8B. Japan’s Nov. polished imports +9% to $68M. Tiffany extends partnership with designer Elsa Peretti for 20 years. De Beers executives to address U.S. DMIA on Jan. 8.


RapNet Data: Jan. 3

Diamonds 949,225
Value $6,040,237,425
Carats 1,025,052
Average Discount -27.44%

www.rapnet.com







Get Current Price List | Subscribe to Rapaport | Join RapNet



RAPAPORT ANNOUNCEMENTS


January
8
Tue


An Evening with Philippe Mellier, Varda Shine
and Stephen Lussier

New York City
Hosted by DMIA at 5:30 p.m.
1271 Avenue of Americas 8th Floor
Reservations are required.
Email Alla Sachakova for seating.
alla-at-williamfriedmandiamonds.com


January
15-23
Sun-Mon


Rapaport Melee Auction
New York & Dubai

View details.



January
21-29
Mon-Tue


Launching Rapaport Jewelry Auctions

Closeout and Estate Jewelry

January 21-25, New York
January 28-29, Miami
Excellent Buying Opportunities

For more information, please call +1-702-893-9400



QUOTE OF THE WEEK
December sales were slightly below our expectations, as strong results late in the month did not completely offset softness in the first three weeks. Similar to November, profitability for December benefited from our continued focus on achieving an appropriate balance between price investments and driving sales, combined with thoughtful inventory management.

Gregg Steinhafel | Target Corp.









Careers@Rapaport




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















INDUSTRY



Polished Prices Fall in 2012

Certified polished diamond prices fell ‎in 2012 as global economic weakness slowed growth in China and poor government ‎policy fueled further declines in India. Steady U.S. demand sustained the jewelry industry ‎but consumer sentiment softened in December as pending tax hikes reduced holiday ‎retail spending.‎ In December, the RapNet Diamond Index (RAPI™) for 1-carat polished diamonds was ‎flat, while other categories rose slightly.‎

For 2012, RAPI for 1-carat fell 12.5%, while 0.3-carat ‎stones declined 7.4% and 0.5-carat diamonds decreased by 11.1%. RAPI for ‎‎3-carat stones fell 11.6% but the Rapaport Melee Index (RMI) ‎increased by 2.3%.

Forecasts for pending diamond price increases are premature and the trade should be ‎careful not to inflate prices by buying diamonds with easy credit. Bank credit that enables ‎firms to buy diamonds at unsustainably, artificially high prices must be stopped. ‎

Purchase the Rapaport Research Report, “Questionable Stability” for full details.







KP Issues a Notice on CAR

The Kimberley Process (KP) urged vigilance across the supply chain for any illicit rough diamonds that may have been introduced by rebel group Seleka in the Central African Republic (CAR), particularly from Bria, Sam Ouandja and Bamingui. The KP requested its Working Group on Monitoring and the Working Group of Diamond Experts to continue monitoring the situation on the ground where rebel groups have attacked diamond-producers. The KP noted, however, that most of CAR's rough diamond production is legitimate and accompanied by certificates.







ALROSA Sells $230M in Rough to Gokhran

ALROSA sold approximately $230 million worth of diamonds to Russia’s state depository ‎Gokhran in 2012.‎ The company sold about $90 million worth of goods to Gokhran in the second quarter of ‎‎2012 and an additional $140 million through the rest of the year. ALROSA explained in August that it reduced supply to the market and sold to Gokhran ‎after ‎witnessing its customers' acute financing problems during the second half of ‎‎2011, ‎which led to the decline in demand for rough diamonds in the first half of 2012.‎















RETAIL & WHOLESALE



U.S. Christmas Season Retail +3%

U.S. chain-store sales rose 4.5% year on year in December, excluding drugstores, according to the International Council of Shopping Centers (ICSC). The comparable-store increase for the entire Christmas season rose 3.1%, due to a weaker-than-expected November reading. ICSC concluded that retailers performed ''largely as expected,'' and benefited from two extra days of shopping due to an early Thanksgiving weekend. ICSC anticipates that January's chain-store sales will increase about 3% year on year, but lower when drugstores are included. As for online spending, comScore stated that retail sales rose 14% year on year to $42.3 billion from November 1 through December 31, which was just slightly lower than expectations.

The following table reflects December sales at some of the major retailers.
Dec. $Mil. %Chng. Comps %Chng.
Bon-Ton $513 1.5% 2.4%
Costco $11,200 11.5% 8%
Kohl's $3,370 4% 3.4%
Macy's $5,100 3.6% 4.1%
Nordstrom $1,700 9.4% 8.6%
Target $10,200 0.8% 0%








Hong Kong Jewelry Sales +14%

The Census and Statistics Department (CSD) of Hong Kong reported that November retail sales rose 9.5% year on year to $4.7 billion. The volume of retail goods sold rose 8.1%. Sales of jewelry, watches and clocks rose 13.6% year on year in November to $1 billion, bringing the year to date total to $11.1 billion and representing an increase of 7.3%. The CSD observed that retail sales benefited from a vibrant influx of tourists and stable job and income conditions locally.







Tiffany, Peretti Sign a 20-Year Deal

Tiffany & Co. and jewelry designer Elsa Peretti entered into an amended and restated agreement to extend their partnership 20 years. Tiffany made a $47 million one-time payment to Peretti, which is subject to the withholding of U.S. income taxes on a portion of the payment. Peretti will also receive royalties for use of the Peretti intellectual property and fees in respect of certain quality-control services Peretti has committed to providing pursuant to the agreement.

Since 1974, Tiffany & Co. has been the sole licensee for the intellectual property rights to make and sell jewelry and other products under Peretti’s trademarks. The renewed agreement, which reflects the long-standing rights and marketing and royalty obligations of both parties, grants Tiffany an exclusive license in all of the countries in which Peretti-designed jewelry and products are currently sold.








Richline Buys Rio Grande

The Richline Group Inc. acquired Rio Grande, including Rio Grande’s Neutec branded equipment, from The Bell Group Inc. In the new corporate structure, Rio Grande's president, Alan Bell, and executive vice president, Molly Bell, will continue in their executive roles and oversee the company, while Eddie Bell will continue to lead the Santa Fe Symposium and Neutec. With Richline's financial support and collaboration, Rio Grande will be able to meet the future challenges of the jewelry industry, according to the companies. Rio Grande will be a stand-alone business, as are two other recent acquisitions -- LeachGarner and Inverness.







LJ Intl. Changes FY Closing Date

LJ International Inc. approved a change to its fiscal year, moving the closing date from December 31 to March 31 from this point forward. The primary purpose of altering the financial closing date was to align its reporting structure with that of other domestic peers in order to improve comparability on both a quarterly and an annual basis, according to a statement from the board of directors.







Foresee Ranks Website Satisfaction

Foresee Results' annual Holiday E-Retail Satisfaction Index, which measured the user experience of 100 retail websites from 24,000 consumers, found that Amazon.com measured up to high standards with an 88% satisfaction rate. Other retailers that sell jewelry included QVC.com with a satisfaction rate of 83%, Avon.com and HSN.com at 81%, Kohls.com at 80%, Nordstrom, Saks and Target at 79%, Costco, JCPenney, ShopNBC and Walmart at 78%, Macy's at 77%, Overstock and Sears at 75%, RueLaLa at 73% and Gilt at 72%.

Foresee observed some big-name retailers suffered declines including Apple and Dell, but the largest drop in satisfaction hit JCPenney.com. Satisfaction with the customer experience, when measured correctly, is the most important predictor of future success, according to the firm. Merchandise selection remains a top priority for increasing customer satisfaction. Foresee determined that, on average, a one-point change in website user satisfaction was found to predict a 14% gain or loss in revenue.















GENERAL



Disparity Widens With Industry Stocks

WATCH NOW: There were two distinct stories from publicly-traded diamond industry shares in 2012 across retail, wholesale and mining sectors. Either the company's stock was hot, investors snapped-up shares and the prices soared by 20% or more, or the opposite was true and poor business conditions sank shares by as much as half. Stand-out performers though included Movado Group, Charles & Colvard, Richemont, Gitanjali Group, Titan, Vaibhav Gems, Michael Hill and Gemfields. Overall the greatest losses for share prices hit the diamond-mining companies.







Luxury Women to Watch

‎The Luxury Daily named 25 executives in its inaugural Luxury Women to Watch 2013 list, defined by those who are expected to make a difference in luxury marketing and retail during the year. Of those closely tied to the jewelry industry, Luxury Daily chose Erika Bearman, the senior vice president of communications at Oscar de la Renta; Pam Danziger, (pictured) the president of Unity Marketing; Cannon Hodge, the social media manager at Bergdorf Goodman; Denise Incandela, the chief marketing officer for Saks Fifth Avenue and Maureen Mullen, the research lead for L2 Think Tank.







Avidar Rejoins IDI

The Israel Diamond Institute Group of Companies (IDI) reappointed Eli Avidar as its ‎managing director, six months after he left the position to join the private sector. Avidar previously served as IDI managing director from October 2006 until June 2012 ‎when he was appointed chief executive of Azura Consulting, which is owned by ‎Dan Gertler and provides consulting services for the ‎management of mining assets in ‎Africa.‎















STATS



Israel

2012 $Mil. %Chng.
Polished exports $5,560 -23%
Polished imports $4,270 -25%
Net exports $1,290 -15%

Rough imports $3,830 -13%
Rough exports $2,800 -20%
Net imports $1,030 -15%

Net diamond account $262 -58%







Japan

Nov. $Mil. %Chng. YTD %Chng.
Polished imports $68 9% $834 12%
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Rapaport Weekly Market Comment Jan. 11, 2013


Diamond markets quiet. Rough prices may come under pressure ‎as banks scrutinize manufacturers and reduce credit facilities that have encouraged speculation and price manipulation. Far East polished demand improving ahead of Chinese New Year but ‎consumers remain price sensitive. Indian retail diamond demand strong. Government may raise ‎gold import duty to 6% encouraging shift in consumer demand to diamonds. Christmas season sales at Signet +7% to $1.2B, ‎same-store sales +3%; Zale sales flat at $567M, same-store sales +2%; Tiffany sales +4% to $992M, same-store flat. Swatch Group 2012 revenue +14% to $8.8B, watch & jewelry ‎sales +16%. Anglo American appoints AngloGold Ashanti’s Mark Cutifani as new CEO.


RapNet Data: Jan. 10

Diamonds 963,427
Value $6,145,883,384
Carats 1,052,331
Average Discount -27.55%

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RAPAPORT ANNOUNCEMENTS


January
15-23
Sun-Mon


Rapaport Melee Auction
New York & Dubai

View details.



January
21-29
Mon-Tue


Launching Rapaport Jewelry Auctions

Closeout and Estate Jewelry

January 21-25, New York
January 28-29, Miami
Excellent Buying Opportunities

For more information, please call +1-702-893-9400


January
23-30
Wed-Wed


Rapaport Single Stone Auction
New York & Israel

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QUOTE OF THE WEEK
Tiffany & Co.'s shortfall in the fourth quarter and reasoning for the conservative 2013 outlook was primarily weakness in U.S. sales. This is particularly disappointing after multiple negative revisions to guidance throughout 2012 and the gross margin weakness acknowledged last quarter.

Liz Dunn | Macquarie Group









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RETAIL & WHOLESALE



Swatch's FY Sales +16%

The Swatch Group reported that sales from its watches and jewelry segment grew 15.6% year on year to $7.9 billion in 2012. The company noted double digit growth rates for almost all of its brands, outside of Greater China. Total group sales rose 14% year on year to $8.8 billion. The company will report net income on February 21, signaling ahead of time to expect solid results despite the significant marketing expenses for the London Olympic Games and unsatisfactory currency developments this past year.







Tiffany's Comps Flat

Tiffany & Co. reported that worldwide sales increased 4% year on year to $992 million for the Christmas season, which included the months of November and December 2012. However, comparable-store sales were flat.

Sales in the Americas region rose 3% year on year to $516 million, however, Tiffany recorded a comparable-store sales decline of 2% for its New York flagship store and in U.S. branch stores. Internet and catalog sales rose 4%. In the Asia-Pacific region, revenue increased 13% to $187 million, comparable-store sales jumped 7%; in Japan, total sales plunged 5% to $153 million, but same-store sales rose 1%; in Europe, sales rose 2% to $119 million, however, results were mixed by country and same-store sales were flat.







Signet's Comps +3%

Signet Jewelers reported Christmas-season sales on a same-store basis rose 3.3% year on year for the nine weeks that ended on December 29. Group sales, which included $37 million from the newly acquired Ultra stores, rose 7.1% to $1.24 billion. Online sales increased by 39%. By region, U.S. sales on a comparable-store basis rose 4.7% and total sales rose 9.9% to $1 billion. In the U.K., same-store sales fell 2.6% and total sales fell 8.1% at constant-exchange-rates to $203 million.







Zale's Comps +2%

The Zale Corporation reported that its Christmas-season same-store sales rose 2.3% year on year, while total revenue was flat at $567 million. Zales branded stores posted a same-store sales increase of 3.1% year on year, while Gordon's Jewelers posted a comparable-store sales increase of 2.2%. Canada's fine jewelry brands posted a comparable-store sales increase of 2.7%. Same-store sales at Piercing Pagoda rose 1.7%.







Rajesh Reports Record Festive Sales

Rajesh Exports reported record sales during the Diwali and Christmas festive seasons with revenue exceeding $41 million. Stores registered footfall of 97,322 customers, 64,312 conversions and they sold 79,347 pieces of jewelry. More than 743 kilograms of jewelry were sold during the period. Rajesh Exports expects to introduce 1,000 new designs in its stores beginning on January 15 for the upcoming wedding season.







DMIA Hosts De Beers Execs for NY Trade

WATCH NOW: Marking an official public appearance of De Beers executives on U.S. soil, the Diamond & Importers Association of America (DMIA) hosted its members and the diamond trade for an ''Evening with De Beers'' on January 8 in Manhattan. Philippe Mellier, the chief executive of the De Beers Group; Varda Shine, the executive vice president of global sightholder sales and Stephen Lussier, the executive vice president of marketing, presented "Diamond Equity and the De Beers Group" to some 300 in attendance.







Deepak Intl. to Market Polar Bear Diamonds

The Northwest Territories (NWT) of Canada granted Deepak International Ltd. its special diamond manufacturer status, which enables the company to purchase a portion of the 10% of NWT rough diamond production offered for local cutting and polishing. Deepak International will also be able to market the Polar Bear trademark under and exclusive licensing agreement. Deepak International is authorized to market NWT-manufactured diamonds as a ''Government Certified Canadian Diamonds.'' Deepak International is finalizing the purchase of two government-owned buildings in Yellowknife and the lease of related airport land as the site for their new NWT diamond manufacturing operations.







Quality Gold Completes Leslie's Merger

Woodbridge International completed the sale of its client, Greenwich, Connecticut-based Leslie's Jewelry Manufacturing Corporation this month to Quality Gold Inc. of Fairfield, Ohio. Quality Gold began taking orders for Leslie's on January 2, started shipping orders on January 7 and by January 14, or earlier, it will begin processing returns, according to the company's announcement. Also by mid-January, Leslie’s sales force should be equipped to introduce more than 350 new items that Quality Gold expects to offer with the Leslie’s brand. By the second quarter, the company expects to ''aggressively introduce'' additional new products in both 10-karat and 14-karat gold and sterling silver. In May, prior to the Las Vegas shows, Quality Gold will introduce a new and expanded Leslie’s catalog.







MJGF Misses Expectations

Visitor traffic was light at the second edition of the Mumbai Jewellery & Gem Fair (MJGF), with exhibitors reporting activity mainly from their existing clients. Hari Krishna Exports said it expects footfall would increase as the show gains in prominence in years to come. Demand for dossiers, fancy shapes, SI and pique goods during the show was stable; buyers were mainly looking for dossiers in 30-40 pointers.







Helzberg Partners With David's Bridal

Helzberg Diamonds became the exclusive jewelry retail partner for David’s Bridal in the U.S. The partnership creates a one-stop resource for brides-to-be, the companies stated. Helzberg believes it will be reaching a huge audience of brides to offer wedding bands, wedding jewelry and bridal party gifts. The affiliation with David's also gives the retailer an opportunity to build relationships with women who are approaching marriage.







Huizenga Launches Collection at Neimans

Pamela Huizenga launched her gem infused gold and platinum jewelry collection with Neiman Marcus in Fort Lauderdale, Florida this month. The launch opened with a 22-piece collection that the designer will build upon throughout the first and second quarters. The collection includes colorful bracelets, pendants and earrings with statement rings coming soon. Huizenga's designs ''pop in natural colors'' that engage and entice with fancy colored, rose-cut diamonds, rubellites, chalcedony, opals, tourmalines, rare stalactites and turquoise.







Cred Sources Fairtrade Silver

Cred Jewellery in the U.K. sourced what it called the world's first Fairtrade & Fairmined silver in December. The metal originated in the Sotrami mine in Peru, one of the mines certified as Fairtrade & Fairmined by the Fair Trade Labeling Organization and the Alliance for Responsible Mining. The silver is found in small quantities at Sotrami alongside deposits of gold and, therefore, it received the same fair trade mark, according to Cred Jewellery.















GENERAL



Anglo Appoints Cutifani

Anglo American has appointed Mark Cutifani as its new CEO to replace ‎Cynthia Carroll. Cutifani, who is currently CEO of AngloGold Ashanti Ltd., will begin his new ‎position on April 3, while Carroll is scheduled to leave at the end of April.‎ Cutifani was described as a seasoned miner and experienced executive with a focus on creating shareholder value.







Namibia Appoints Seber to Diamond Board

Burhan Seber, the president of the Diamond Manufacturers Association of Namibia (DAIMAN), was appointed to the Diamond Board of Namibia by the Honorable Isak Katali, Namibia's Minister of Mines & Energy, for a term of four years. DIAMAN is one of the 16 members of the International Diamond Manufacturers Association (IDMA). Seber is the managing director and majority shareholder of Hardstone Processing (Pty.) Ltd., one of the 12 sightholders of the Namibian Diamond Trading Company (NDTC). Namibia's Diamond Board consists of 14 government-appointed members.







HOF Names New Execs

Hearts On Fire promoted Gilly Strauss to executive vice president of global sales, Jacqueline Raffi was promoted to vice president for key accounts and Chris Croteau was made director of sale for North America. They will report to the vice president of sales, Rich Pesqueira, who oversees the sales operation. Additional executive promotions were given to Jason Bisset, now vice president and controller; Michael McArdle, vice president of business planning and analysis and Keith Spodek, vice president of operations.







King Crown Promotes Chinese Execs

King Crown of South Africa promoted Rose Yu to executive vice president of the company's operations for China to oversee its supply chain management and service operations within the greater China region. The company also named Linda Ao as its vice president of business development for China. King Crown set up its operations in China this past year with a local brand, Hao Guan. The company's priority this year is to build upon its independent sales and service operation in China particularly in Guangdong, Fujian, Zhejiang, Jiangsu and Shanghai, according to the group.















MINING



Rockwell's 3Q Loss at $5M

Rockwell Diamonds reported that diamond sales rose 23% year on year to $7.4 million for the third quarter that ended November 30. The company sold 4,043 carats at an average price of $1,821 per carat, in part due to several high-quality stones, greater than 50 carats, which contributed to a 64% increase in price per carat. The company reported a loss of $4.7 million.







DiamondCorp, Laurelton Finalize Agreement

DiamondCorp signed the contract with Laurelton Diamonds Inc. for a previously announced term loan of $6 million in exchange for an offtake agreement for diamond production from the Lace mine in the Free State province of South Africa. The terms of the loan were originally announced on November 16 and proceeds are to be released from escrow and complete the funding required for DiamondCorp's 47-level block cave development at Lace. DiamondCorp expects to make its first withdraw on January 10 and a second on April 10.







Lucara Recovers Two Blue Stones

Lucara Diamond recovered two rare blue diamonds from its Karowe mine in Botswana. The larger of the two diamonds weighs 4.77 carats with the smaller diamond weighing 0.2 carats. Options for the sale of the rough diamonds are currently being considered, according to the company. Lucara recently sold a 9.46-carat blue diamond from the Karowe mine for $4.5 million.







Paragon Accesses New Licenses

Paragon Diamonds entered into a memorandum of understanding with a private company in Botswana that it said was the registered owner of a number prospecting licenses across diamond-prospective terrain. The licenses were issued to the private firm in July 2011, remain valid until June 2014, include one in the Orapa kimberlite field and can all be extended for an addition four years, according to Paragon. The agreement stipulates a six month period during which Paragon may review data on the licenses, undertake appropriate due diligence and negotiate earning an equity interest in the licenses in return for funding exploration costs, on terms to be finalized.















ECONWATCH



Diamond Industry Stock Report

Solid gains were the rule this week as investors found jewelry retailers managed to hold margins in check given a very difficult selling environment. Birks +9%, Movado +14%, Signet +12%, Tiffany +6%, Zale +18%. Indian shares were mixed with C.Mahendra -22% and Gitanjali +17%. Stornoway +22% and Peregrine +17% pulled ahead in the mining sector. Read the extended industry stock report for this past week.
Jan. 10 Dec. 27 Chng.
$1 = Euro 0.754 0.755 -0.001
$1 = Rupee 54.58 54.95 -0.4
$1 = Israel Shekel 3.75 3.73 0.02
$1 = Rand 8.66 8.49 0.17
$1 = Canadian Dollar 0.98 0.99 -0.01

Precious Metals
Gold $1,673.60 $1,664.00 $9.60
Platinum $1,624.00 $1,532.00 $92.00

Stock Indexes Chng.
BSE 19,663.55 19,323.80 339.75 1.8%
Dow Jones 13,471.22 13,096.31 374.91 2.9%
FTSE 6,101.51 5,945.30 156.21 2.6%
Hang Seng 23,354.31 22,619.78 734.53 3.2%
S&P 500 1,472.12 1,418.09 54.03 3.8%
Yahoo! Jewelry 1,137.65 1,101.57 36.08 3.3%
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Rapaport Weekly Market Comment Jan. 18, 2013


Market sentiment improving ahead of Chinese New Year but Far East retailers cautious. Chow Tai Fook warns of sluggish luxury growth as 3Q sales +4%, same store sales -8%. All eyes on the rough market with small De Beers sight expected next week as manufacturers reduce their 2013 rough purchasing budgets. Harry Winston to sell luxury brand to Swatch for $1B. Rio Tinto’s 4Q diamond production +9% to 3.25M Cts. Lazare Kaplan 2Q sales -28% to $16M. U.S. Nov. polished imports +22% to $1.9B, polished exports -11% to $578M. India’s Dec. polished exports -37% to $950M, rough imports +35% to $1.8B. Belgium’s Dec. polished exports -18% to $998M, rough imports +13% to $930M.


RapNet Data: Jan. 17

Diamonds 940,937
Value $6,119,309,826
Carats 1,034,890
Average Discount -27.64%

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RAPAPORT ANNOUNCEMENTS


January
15-23
Sun-Mon


Rapaport Melee Auction
New York & Dubai

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January
21-29
Mon-Tue


Launching Rapaport Jewelry Auctions

Closeout and Estate Jewelry

January 21-25, New York
January 28-29, Miami
Excellent Buying Opportunities

For more information, please call +1-702-893-9400


January
23-30
Wed-Wed


Rapaport Single Stone Auction
New York & Israel

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QUOTE OF THE WEEK
The U.S. economy has been recovering in fits and starts and it shows in small retailer sales growth numbers. When you step back and look at the big picture, small businesses are operating in a much better environment today than two years ago. Yet, recent data seems to indicate that retailers faced stronger headwinds at the end of 2012 and it remains unclear how ongoing uncertainty in Washington will impact small businesses heading into 2013.

Marc Bernstein | Wells Fargo









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RETAIL & WHOLESALE



Swatch to Buy Harry Winston Retail

Harry Winston Diamond Corp. will sell its diamond jewelry and timepiece division to ‎The Swatch Group for $1 billion, consisting of $750 million in cash and debt ‎repayment of $250 million. Harry Winston will change its name to Dominion Diamond Corp. once the transaction is completed. Cash from the sale will leave the mining company well equipped for upstream ‎opportunities in an environment where cash has become a strategic resource, according to the firm.

Harry Winston agreed to buy the Ekati diamond mine from BHP Billiton for $500 million and, pending a positive outcome from litigation attempting to halt the sale, it expects to close the deal by May 15. Harry Winston is also interested in buying Rio Tinto's stake in the Diavik diamond mine.

As reported in the Rapaport Tradewire of January 11, Swatch recorded 2012 revenue from its watches and jewelry segment up 16% year on year to $7.9 billion. The company noted double digit growth rates for almost all of its brands, outside of Greater China. Total group sales rose 14% year on year to $8.8 billion. The company will report income on February 21.







Jewelry Store Sales +8% in Nov.

U.S. jewelry store sales jumped 8.2% year on year in November to $2.663 billion, while the consumer price index (CPI) for jewelry in November fell 2%. Jewelry store sales for the January through November period increased 4.3% year on year to $24.514 billion, while the CPI was up almost 2%.

In other retail news, the National Retail Federation (NRF), after predicting Christmas-season retail sales would increase by 4.1%, determined that consumer spending at the nation's stores for the months of November and December combined rose only 3% to $579.8 billion. Online retail sales rose 11.1%, just shy of the group's prediction of 12%. Economic uncertainty and the fiscal cliff chaos likely weighed on consumer spending during Christmas, according to the NRF.







Jewelry CPI -3% in Dec.

The U.S. consumer price index (CPI) for jewelry eased again in December, falling 2.9% year on year to 176.87 points in response to marginally weaker prices for precious metals and gemstones. The index was also lower than November's reading of 177.68 points; however, the CPI maintained a historically strong trend and December marked 24 consecutive months of a reading of more than 170 points. The CPI reached a record 185 points in January, but then prices for polished diamonds, gold and platinum have since remained under pressure. The average CPI rate for the calendar year rose 0.9% to 178.23 points compared with 176.56 points in 2011.







Lazare Kaplan 2Q Sales -28%

Lazare Kaplan reported ''anticipated'' revenue for its second-quarter of fiscal year 2013, fell 28% year on year to $15.6 million. Lazare Kaplan observed a drop in sales of both polished and rough diamonds during the quarter. The company also filed a notice that the quarterly financial statement would be delayed due to online material uncertainties.

In other news, Lazare Kaplan acquired a 50% stake in the NamGem Diamond Manufacturing Company in December. Lazare Kaplan has had an existing strategic cooperation agreement with NamGem for cutting and polishing diamonds in Namibia. Under the terms of that agreement, Lazare Kaplan provides technical assistance and supervises the manufacturing of stones deemed suitable to cut and polish.







Chow Tai Fook Sales +4%

Chow Tai Fook reported group sales rose a modest 4% year on year in its third ‎fiscal-quarter that ended on December 31, while same-store sales declined 8%. The company did not provide sales figures in ‎its report and it observed weak condition on Mainland China. The ‎National Day Golden Week sales performance in October was worse than expected ‎significantly dragging down sales. The company’s sales in Hong Kong and Macau, however, grew 11%, while same-store sales fell 6%. Chow Tai Fook opened a net 70 points-of-‎sale during the quarter bringing its total to 1,802 as of December 31. ‎







Michael Hill's Sales +9%

Michael Hill International reported that revenue for five months plus preliminary sales from December grew 8.8% year on year to $262.1 million, however, same-store sales for the jeweler rose by only 2.6%. By region and local currency, Australia's sales jumped 10.8% with same-store sales up 4.2%; New Zealand's sales rose 3.7% and comparable-store sales increased 3.1%; jewelry sales in Canada surged 21.6% and same-store sale rose 3.9%, whereas U.S. revenue and comparable-store sales inched higher by 3.9%







Enterprise Software Improves Operations

WATCH NOW: Integrated software solutions created specifically for the diamond and jewelry industry are streamlining operations and improving supply chain performance from the backend all the way up to a company's ecommerce and social media outreach. Check out what ChainDrive and HansaWorld are doing for their jewelry clients and see what PMI Digital marketing is doing to enhance their jewelers' online engagement from the floor of NRF's Big Show in Manhattan.

Also during the show, Signet announced the completion of its major integration of online and mobile presence with IBM, which the retailer claimed dramatically improved its customer experience and added a 49% year on year revenue increase to online Christmas sales this year.

Separately from the show, independent jeweler James Allen launched its Diamond Display Technology, which magnifies diamonds 15-times in high-resolution and gives online shoppers the ability to flip the actual diamond for sale by 360 degrees online. Blue River Diamonds Jewelry introduced the Blueriver47 app, which can be found in the Apple iTunes store, for iPhones and iPads. The app was designed to simplify the diamond-buying process and to allow users to select or design their engagement rings, wedding rings, earrings, necklaces, bracelets and other pieces through Facebook, Twitter or Google+.







Kingold Secures Cash, Gold Lease Credit Deal

Kingold Jewelry Inc. entered into a subscription agreement with three individuals, providing seven million shares of its common stock at a price of $1.80 per share for proceeds of $12.6 million. The gold jewelry manufacturing firm also issued, on a pro rata basis, warrants to purchase up to an additional 2.8 million shares at an exercise price of $1.80, which warrant is not cashless exercise but is exercisable at any time in whole or in part for 12 months. Kingold intends to use the proceeds to purchase additional raw materials for its products, working capital and other general corporate purposes.

Kingold also signed a gold leasing agreement with China Construction Bank's Wuhan Jiang'An branch. The agreement is similar to a revolving credit line, with the bank providing Kingold reusable credit of up to approximately $40.2 million; however, draw downs under the facility, and repayment thereunder, will be made in gold rather than currency, according to Kingold.







TBZ Opens New Showroom

Tribhovandas Bhimji Zaveri Ltd. (TBZ) opened a showroom in Nagpur, expanding its reach in India’s western state of Maharashtra. The new store will cater to the needs of local communities in the Vidarbha region. The opening was timed to serve customers during the auspicious Uttarayan, known as Makar Sakranti in other parts of India, and the pre-wedding buying season. The 2,500-square-foot showroom is located at Dharampeth in Nagpur.







Israel's Top Exporters

Company by rank, name
and revenue in 2012.
$Mil. 2011 $Mil. %Chng. 2011 Rank
Leo Schachter $317 $403 -21% 1
M.I.D. House Of Diamonds $238 $239 0% 2
A.A. Rachminov Diamonds $180 $216 -17% 3
Safdico (Israel) Ltd. $154
Niru Diamonds Israel $120 $111 8% 6
E.Z. Diamonds Ltd. $95 $140 -32% 4
Ofer Mizrahi Diamonds $92 $96 -4% 9
Andre Messika Ltd. $87 $101 -14% 8
Yoshfe Diamonds Intl. $84 $130 -35% 5
Poligem Ltd. $81 $67 21% 13
Rosy Blue Sales Ltd. $74 $85 -13% 10
Royal Gem (Israel) Ltd. $68 $68 0% 12
O.S.G. Polishing Ltd. $64 $50 28% 18
Rachminov Diamonds $63 $61 3% 15
Masingita Ltd. $48 $65 -26% 14
Eran Diamonds - Yehuda Sayag $47 $47 0% 20
D.N. Diamonds 2007 Ltd. $41
Shlomo Bichaci Diamonds Ltd. $40
Eliyahu Yona Diamonds Ltd. $40
Eshed-Diam Ltd. $38 $47 -19% 21
S.N. Asia (Israel) Ltd. $38 $59 -36% 16
Waldman Diamond Company $38 $45 -16% 23
A. Schwartz & Sons Diamonds $36 $43 -16% 24
Z.I.P. Diamonds Ltd. $34 $46 -26% 22
Yoram Dvash Diamonds Ltd. $31
















GENERAL



Sisk Dies at 59

Gerald (Jerry) D. Sisk, Jr., the co-founder and executive vice president of Jewelry Television&reg;, passed away peacefully in his sleep on January 13, at the age of 59. His death was unexpected. He is survived by his wife Karen, his mother, a sister and several other relatives. Sisk was a graduate gemologist from the Gemological Institute of America (GIA), a member of the International Colored Gemstone Association and he served as a Gemstone Industry & Laboratory Conference committee member. He was a frequent guest speaker and was honored to be chosen as one of the five ''most powerful people in the world of gems and gemology'' on the JCK 2012 Power List.







Diamond Bourse of Canada Appoints Kumar

The board of directors for the Diamond Bourse of Canada unanimously voted Deepak Kumar, from Deepak International Ltd., to the post of bourse director. Kumar will assume a director’s post vacated by Filip Zimmerman, of Zimmy Diamonds. Kumar’s diamond company recently concluded its purchase of two diamond manufacturing facilities in Yellowknife, Canada and was granted the exclusive rights, by the government of the Northwest Territories, to manufacture their iconic Canadian diamond brand “Polar Bear.”







IDI Appoints Gefen

The Israel Diamond Institute Group of Companies (IDI) representative office in Hong Kong, IDI – Asia Pacific Ltd., named Gilat Elizov Gefen its managing director to replace Michal Gordon, who served in this position for the past two years. Gefen has served in several capacities with the Jewish Women's Association in Hong Kong, where she currently resides. Gefen holds a BSc in Industrial Engineering from the Technion and an MBA from the Recanati School of Management in Tel Aviv University.















MINING



Rio Tinto Production +9%, Albanese Out

Rio Tinto reported that its diamond production grew 9% year on year to 3.248 ‎million carats in the fourth quarter of 2012, with increases registered at all of its operations.‎ Production at Rio Tinto’s fully-owned Argyle mine in Australia rose 5% to 2.01 ‎million carats due to an increase in processed ore and higher-grade ore. Rio Tinto’s 60% share of production from the Diavik mine in Canada jumped 19% to 1.141 million carats. Harry Winston owns the remaining 40% in Diavik and is ‎reportedly looking to acquire Rio Tinto’s stake. Rio Tinto’s 78% share in production at the Murowa mine in Zimbabwe rose 11% to 98,000 carats.

In other news, Rio Tinto informed shareholders that it would take a $14 billion impairment charge, primarily from coal and aluminum operations, when it reports fiscal results in February. Tom Albanese, the CEO, stepped down and was replaced by Sam Walsh.







Fipke Files Claim to Prevent Ekati Sale

C. Fipke Holdings Ltd. filed a claim with the Ontario Superior Court of Justice to prevent BHP Billiton Canada's sale of the Ekati diamond mine to Harry Winston unless, and until, BHP provides it with revised offers. Fipke, which holds a 10% interest in Ekati's core zone joint venture and the buffer zone joint venture, alleged that BHP did not comply with a pre-emptive rights agreement and was complicit in the non-compliance.

All parties involved entered into an agreement which provides for the trial and any appeal to be conducted on an expedited basis, with a view to obtaining a final ruling no later than April 15. Harry Winston and BHP both claimed the suit is without merit and plan to vigorously defend the action.







Guinea Renews Droujba License

Stellar Diamonds received its long awaited renewal of the Droujba diamond exploration license in Guinea. The exploration license, which hosts a 3 million carat JORC-defined resource, was renewed for two years, while three exploration licenses adjacent to Droujba are pending. Stellar relinquished a 14-square-kilometer parcel not considered to be prospective for diamonds, reducing the Droujba license area to seven-square-kilometers. The three licenses awaiting renewal cover 100-square-kilometers and are located to the immediate west of Droujba.















STATS



India

Dec. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $950 -37% $16,986 -16%
Polished imports $581 -49% $5,592 -72%
Net exports $369 2% $11,394 54%

Rough imports $1,762 -35% $14,986 4%
Rough exports $79 -39% $1,525 -10%
Net imports $1,683 43% $13,461 0%

Net diamond account ($1,314) ($2,067)







U.S.A

Nov. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $1,876 22% $18,292 -9%
Polished exports $1,298 -11% $15,342 -7%
Net imports $578 596% $2,950 -20%

Rough imports $49 -28% $453 -22%
Rough exports $39 -5% $297 -23%
Net imports $10 -63% $156 -21%

Net diamond account $588 435% $3,106 -19%







Belgium

Dec. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $998 -18% $13,211 -10%
Polished imports $775 -29% $12,905 -8%
Net exports $223 100% $306 -50%

Rough imports $930 13% $12,253 -9%
Rough exports $1,394 17% $13,518 -6%
Net imports ($464) ($1,265)

Net diamond account $687 43% $1,571 -1%















ECONWATCH



Diamond Industry Stock Report

U.S. shares were modestly higher overall, except for Blue Nile (-12%), JCP (-5%), Zale (-3%). Euro shares were higher with Richemont, Swatch and PPR (all +6%) but Indian shares were mixed. Three mining company stocks fell by double digits: Rockwell (-13%), True North (-13%), Gemfields (-19%). Read the extended industry stock report for this past week.

Jan. 17 Jan. 10 Chng.
$1 = Euro 0.747 0.754 -0.007
$1 = Rupee 54.37 54.58 -0.2
$1 = Israel Shekel 3.72 3.75 -0.03
$1 = Rand 8.82 8.66 0.16
$1 = Canadian Dollar 0.99 0.98 0.01

Precious Metals
Gold $1,687.60 $1,673.60 $14.00
Platinum $1,689.00 $1,624.00 $65.00

Stock Indexes Chng.
BSE 19,964.03 19,663.55 300.48 1.5%
Dow Jones 13,596.02 13,471.22 124.80 0.9%
FTSE 6,132.36 6,101.51 30.85 0.5%
Hang Seng 23,339.76 23,354.31 -14.55 -0.1%
S&P 500 1,480.93 1,472.12 8.81 0.6%
Yahoo! Jewelry 1,174.34 1,137.65 36.69 3.2%
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Rapaport Weekly Market Comment Jan. 25, 2013


Diamond markets conservative as Far East retailers complete Chinese New Year purchases. Expectations rise for upcoming Golden Week as China’s 4Q economic growth of 7.9% beats forecasts. Indian government raises gold import duty to 6%, expected to help its trade deficit but hurt the jewelry sector. De Beers keeps prices stable but continues to restrict supply with Jan. sight estimated at $550M. BHP Billiton’s FY2Q diamond production -39% to 295K Cts. as minority partners protest Ekati sale. Richemont’s FY3Q jewelry sales +4% to $2B. India’s Bharat Diamond Bourse inaugurates trading floor.


RapNet Data: Jan. 24

Diamonds 940,925
Value $6,030,300,856
Carats 1,030,303
Average Discount -27.43%

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QUOTE OF THE WEEK
Blue Nile has a strong and growing international presence and the company has identified China as a core market in which to continue that growth. Cooperation with a leading Chinese luxury shopping site is an effective way to enter the Mainland China market.

Vijay Talwar | Blue Nile









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INDUSTRY



India Hikes Gold Duty Again

India raised its gold import duty from 4% to 6% in an effort to thwart a surging current account deficit. But industry analysts believed this move would lead to more smuggling activity, while the tax is unlikely to have much of an impact on consumer demand. The duty comes to about INR 60,000 per kilogram of gold, which is a difference of 7% between the international and domestic price, according to Prithviraj Kothari, the managing director of RiddiSiddhi Bullions Ltd.

The All India Gems and Jewelry Trade Federation (GJF) stated that gold smuggling increased after the government doubled the import tax from 2% to 4% one year ago. GJF seeks a reduction in the duty. Nomura added that gold demand has risen as a hedge against inflation and imposing the duty will shift gold imports from official to unofficial channels. Angel Commodities, meanwhile, suggested that the duty may impact short term demand for jewelry, but overall demand is expected to be firm due to wedding and festival seasons.

India’s current account deficit for the first fiscal half, which ended on September 30, 2012, stood at $38.7 billion, or 4.6% of its gross domestic product (GDP), much above sustainable levels of 2.5%.








Italian Brands Adapt to Changing Marketplace

WATCH COVERAGE: The VicenzaOro Winter Show hosted jewelry manufacturers and buyers from 120 countries this week, but there were very few diamond exhibitors among the 1,500-strong list of participating brands. Italian jewelry makers reported the need to adapt to changing market conditions, in part due to emerging mass-market production centers in the Far East. Mixed economic conditions from major markets also seemed to weigh on participating buyers decisions to place orders at the show. Italian manufacturers are increasingly producing more affordable price points by using lower-quality diamonds and more silver and colored stones in their designs.















RETAIL & WHOLESALE



Richemont's 3Q Jewelry Sales +4%

Luxury group Richemont reported that revenue performance for the third quarter that ended on December 31, was highlighted by robust jewelry sales and continued retail channel momentum. Nonetheless, Richemont concluded that its wholesale channel was relatively weak, reflecting a cautious approach by the group’s retail partners in the watch business.

Sales at a constant-exchange-rate rose 5% year on year to $3.8 billion for the third quarter. While revenue growth was observed across all segments, Richemont's retail sales jumped 9% and wholesale revenue was up 2%. Jewelry brand sale increased 4%, however, specialty watchmaker sales surged 9%.







Pure Gold Budgets Expansion Funds

Pure Gold Jewellers budgeted for a $75 million expansion this year with plans to open 30 new stores, targeting locations in Jordan, Sri Lanka, India, Maldives and Saudi Arabia. In 2012, Pure Gold Jewellers opened new retail outlets in four countries it had not previously served, and it reported that revenue grew 18% overall. The retailer is focused on penetrating high-density cities.







Blue Nile Gains New TM, Access to China

The U.S. Patent & Trademark Office (USPTO) approved the trademark ''It Starts With The Diamond In Your Mind'' for online retailer Blue Nile Inc. on January 15. In other news, Blue Nile selected Xiu.com, a shopping website serving China, as its exclusive third-party online distributor for fashion jewelry in Mainland China. Blue Nile's presence on Xiu.com launched January 18, marking its official entrance to the marketplace in Mainland China. Blue Nile's jewelry offerings range from the equivalent of about $20 to $160,000.







Baume & Mercier Debut Clifton

Baume & Mercier premiered a new men's collection, Clifton, this week at the Salon International de la Haute Horlogerie (SIHH) show in Geneva. The Clifton collection will be available at retailers in April. The watches are powered by Swiss-made mechanical movements and the company defined their style as contemporary, while depicting a modern interpretation of the men's classic round watch.

The watches feature an uncluttered sun satin-finish dial, double-beveled design, curves on the case and the bezel, sapphire case back and small complications on some of the references. Each model is clad in steel or 18-karat red gold and they are finished with an alligator strap or stainless steel bracelet.







Stuller, Gemvision Combine Sales Force

Stuller Inc. and Gemvision combined their sales teams into one organization in an effort to improve customer relationships. Expert teams are now more personalized to offer convenient service for customers, according to Bob Cox, the vice president of business development at Stuller. The united force is comprised of 11 regional sales directors.







Sharma Unveils 'Season of Love'

Bollywood actress Anushka Sharma announced the “Season of Love” offer from Gitanjali Group and unveiled the new Valentine collection from Gili in Mumbai. Under the banner of ''Leading Jewelers of the World'' (LJOW), Gitanjali is offering discounts of up to 20 percent on diamond jewelry purchase above $186 (INR 10,000). The month long offer will be available on jewelry brands such as Asmi, Gili, Ddamas, Nakshatra, Parineeta, Diya, Sangini, ME Jewels, Gitanjali Jewels, Shuddhi, Gdivas, Jewel Souk, Menz, Sagaee and Amore.







BDB Christens SG Jhaveri Trading Hall

The Bharat Diamond Bourse (BDB) inaugurated its trading floor, with an aim to widen the scope of trading within the complex and facilitate the operations of smaller companies and traders. Currently, there are 425 offices of 300 companies operational within the premises, while work on the interiors of another 415 offices is nearing completion. The SG Jhaveri Trading Hall will help accelerate this process of shifting the entire operations of the industry from the Opera House to BDB.















MINING



BHP Production -39%

BHP Billiton's diamond production from the Ekati diamond mine in Canada fell 39% year on year to 295,000 carats during the second quarter that ended on December 31. Rough diamond production for the first half of the company's fiscal year fell 35% to 608,000 carats.

BHP reiterated its agreement to sell all interests in the Ekati mine to Harry Winston for $500 million. As Rapaport Tradewire reported January 18, Charles Fipke (C. Fipke Holdings) sued BHP and Harry Winston to prevent the sale, unless and until BHP provides him with revised offers. All parties did agree to fast-path the case. BHP expects the sale to close in the first half.








TIZ Urges Zim Parliament to Oversee Mining

The group Transparency International Zimbabwe (TIZ) urged Zimbabwe's Parliament and cabinet to oversee mining rights and licenses in an effort to curb corruption and ensure transparency. TIZ claimed mining deals benefit certain government officials and that there is an urgent need for reform as ministers were behind the most corrupt activities concerning the extraction, sale and export of gold and diamonds in Zimbabwe.

TIZ alleged that all of the companies mining diamonds in the Marange hold close ties to senior politicians. TIZ rated Zimbabwe 163rd out of 176 countries on its corruption perception index, making it the most corrupt nation in the SADC region.







Cameroon Exports Its First KP Rough

Cameroon exported its first round of rough diamonds as a new Kimberley Process (KP) member country. Export certificates were given for rough from C & K Mining, a Cameroon and South Korea joint venture, which operates the Mobilong Diamond reserve field. C & K expects monthly production of about 6,500 carats.







DiamondCorp Begins Lace Development

DiamondCorp commenced its development activities for the 47-level block cave at its Lace mine, following the receipt of $3 million in funding from Laurelton Diamonds, a subsidiary of Tiffany & Co. The junior miner will receive a second $3 million tranche on April 10 as part of its funding agreement with Tiffany. DiamondCorp stated that the Tiffany loan, combined with $6.6 million of convertible bonds and $24.6 million from the Industrial Development Corporation of South Africa, completed the Lace project financing package.

The main pipe at the Lace mine contains 33.1 million tonnes of kimberlite indicated and inferred to 855-meters depth, containing approximately 13.4 million carats in both resource categories at an average grade of 40.1 carats per hundred tonnes (cpht). The resource has an in-ground value in excess of $2 billion at $160 per carat, according to the company.








De Beers Angola Prospects Improve

De Beers sees Angola as a high-priority for diamond exploration and expects to unveil an economically viable diamond deposit that will help the company regain almost $250 million it has invested searching for diamonds. The company was awaiting evaluation results from three kimberlites at Mulepe, located 500 miles east of Luanda, within the next two months.

De Beers has also found diamonds in a 3,000-square-kilometer concession near Lucapa in the Luanda North province, the last remaining site out of the five that De Beers has explored in Angola since 2005. De Beers has allocated an annual budget of $30 million for prospecting in Angola, which in 2011 produced 8.32 million carats of diamonds worth more than $1.16 billion.







Escom Targets Production by May

Escom Investimentos e Participacoes expects to be producing diamonds from its operations in Angola by May 2013, the company's chairman, Helder Bataglia, told Jornal de Angola. Escom operates the Luo diamond mine and the Tchegi alluvial property, which together could account for about 35,000 carats per month by the end of this year.

The Escom group’s mining business is concentrated in Angola, where it has 15 diamond concessions. Luo has been in operation since 2005. Other areas of business for the company include real estate, oil and gas, energy and public works.







Mining Investment Surges in Canada

The Mining Association of Canada (MAC) reported record global interest for the nation's minerals and metals during 2011, which was the most recent reporting year. Exploration spending in Canada that year reached $3.9 billion, and MAC estimated investment was expected to have been even higher for 2012.

Since 2002, MAC determined that exploration spending in Canada surged 585%, and by 2011 Canada had become the top destination for exploration spending, representing 18% of global investment. Canada's mineral production value rose 21% year on year in 2011 to a record $50.3 billion. While MAC didn't cite the diamond figures specifically, Kimberley Process statistics ranked Canada third in the world for rough production in 2011 at $2.6 billion.















ECONWATCH



Diamond Industry Stock Report

U.S. stocks pointed higher, except for Birks (-7%), Blue Nile (-1%) and Tiffany (-2%). European shares were mixed, Damiani (+5%) pulled ahead, Richemont (-4%) dropped. Indian shares were lower across the board with biggest declines for Classic Diamonds (-13%), Asian Star and C. Mahendra (-9%). Gainers far outnumbered losers on mining stocks with a spread between Namakwa (-13%) and Mwana (+17%). Read the extended industry stock report for this past week.


Jan. 24 Jan. 17 Chng.
$1 = Euro 0.748 0.747 0.001
$1 = Rupee 53.68 54.37 -0.7
$1 = Israel Shekel 3.71 3.72 -0.01
$1 = Rand 9.05 8.82 0.23
$1 = Canadian Dollar 1.00 0.99 0.01

Precious Metals
Gold $1,668 $1,688 -$19.6
Platinum $1,679 $1,689 -$10.0

Stock Indexes Chng.
BSE 19,923.78 19,964.03 -40.25 -0.2%
Dow Jones 13,825.33 13,596.02 229.31 1.7%
FTSE 6,264.91 6,132.36 132.55 2.2%
Hang Seng 23,598.90 23,339.76 259.14 1.1%
S&P 500 1,494.82 1,480.93 13.89 0.9%
Yahoo! Jewelry 1,166.07 1,174.34 -8.27 -0.7%
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RAPAPORT NEWS SERVICE | Feb. 1, 2013 www.rapaport.com | news@rapaport.com



Industry
Retail & Wholesale
EconWatch
Mining
India
General


Rapaport Weekly Market Comment Feb. 1, 2013


Polished markets uncertain as Chinese wholesale demand slows ahead of Feb. 10 New Year and U.S. economy contracts slightly in 4Q. Tight rough supply pushing prices as Indian cutters come back into the market. Dealers selling De Beers boxes at about 5% premium after 2012 production falls 11% to 27.87M Cts. Petra Diamonds 1H production +31% to 1.24M Cts., revenue +54% to $156M. Gem Diamonds 4Q Letšeng sales -41% to $48M with average price -33% to $1,703/ct. Titan Industries 3Q sales +23% to $556M, profit +24% to $38M. Sotheby’s 2012 jewelry sales total $461M with average 84% sold by lot.


RapNet Data: Jan. 31

Diamonds 925,703
Value $6,100,633,436
Carats 1,032,126
Average Discount -27.53%

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QUOTE OF THE WEEK
Royal Asscher established a firm foothold in the Japanese market for 45 years, where we supply 125 jewelers. Next to the U.S. and European markets, the People's Republic of China is the fourth greatest market for our 159-year-old Asscher family company. We believe that Sparkle Roll's market leadership and extensive distribution network will help expand our reach across the broad spectrum of target audiences in China and reinforce our presence in the market.

Edward Asscher | Royal Asscher

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INDUSTRY



De Beers Production -11%, Jan. Sight at $550M

De Beers diamond production rose 24% year on year to 8.051 million carats during the fourth quarter that ended on December 31, dramatically improved by the resumption of operations at Jwaneng mine in Botswana. A slope failure incident in June at the Jwaneng mine disrupted output. However, De Beers production for 2012 declined 11% year on year to 27.875 million carats. Operations continued to focus on waste stripping and maintenance activities initiated in the fourth quarter of 2011, in response to softer global demand for diamonds throughout the year.

De Beers January sight had an estimated value of $550 million as the company ‎continued to limit rough supply. Prices were basically stable with slight changes made to ‎assortments. ‎The market mood remains cautious, according to Nigel Simson, the head of ‎beneficiation at De ‎Beers. Sightholders noted that demand for De Beers goods on the secondary market improved ‎slightly in January due mainly to a decline in supply during the past year. As a result, ‎premiums rose slightly in January to sell on average at around 5% above list. ‎Prices at other suppliers have also increased marginally with reports from the BHP ‎Billiton January tender indicating increases of around 2% to 3%. ‎
Explorers & Damas Jump Start Spring Plans

WATCH NOW. Gemfields completed its acquisition of Faberge this week and emerald production jumped 82% to 14.5 million carats for the first half. Peregrine Diamonds prepares for surface trenching at the Childliak property. Stornoway Diamond completed its capital cost estimate for Renard, realizing a savings of about $50 million. Damas unveiled its new Spring Collection of diamond jewelry crafted in 18-karat yellow gold, and using semi-precious stones and diamonds to celebrate color.

RETAIL & WHOLESALE



LVMH Jewelry Comps +6%

LVMH recorded revenue of $38.2 billion for fiscal year 2012, an increase of 19% year-on-year. Organic growth, representing comparable-store sales and constant-exchange-rates, increased 9%. LVMH's group share of profit jumped 12% to $4.6 billion. In terms of organic growth for jewelry and watches, sales increased 6% year on year; however, total revenue, which benefited from the acquisition of Bulgari, surged 46% to $3.9 billion. Profit from recurring operations of the jewelry and watch business rose 26% to $453 million. The company predicts a robust year of growth ahead as, despite mix messages, luxury goods sales in Europe and Asia remain particularly strong.

Titan 3Q Profit +24%

Titan Industries, which owns the Tanishq brand, reported that sales rose 23% year on year to $556 million in the third fiscal quarter that ended on December 31, driven by growth across all businesses. Expenses increased by 23% to $512.4 million and profit jumped 24% to $38 million. Jewelry sales, including those from its flagship Tanishq brand, ‎rose 27% year on year to $468.8 million, while watch sales increased 11% to $78.9 million.

Sotheby's Jewels Set Record Year

Jewelry sales for Sotheby's in 2012 surged to a record $460.5 million. The auction house stated that revenue from its jewelry sales was propelled by the success of private collections, exceptional diamonds and gemstones and historical jewels with noble provenance. Sotheby’s jewelry auctions worldwide achieved an average of 84% sold by lot. Seventy-two lots sold for more than $1 million, with six surpassing the $5 million mark. One highlight for the year came from a record sale of various-owner jewels at Sotheby’s Geneva, where the total achieved $108.4 million in May.


In the Americas, Sotheby’s experienced its highest single-day total for jewelry in December when its New York auction achieved $64.8 million. Sotheby’s annual total of $114.5 million in Hong Kong marked the company’s second-biggest year of jewelry and jadeite sales in Asia.
Valentine's Day Jewelry Outlook Brightens

The 2013 Valentine’s Day spending survey conducted by BIGinsight for the National Retail Federation (NRF) found the sales of jewelry and watches should increase 7% year on year to $4.4 billion. Nearly 20% of shoppers expressed interest in buying jewelry for a loved one, up from 19% in 2012. While nearly 40% of shoppers plan to hit discount stores for gifts, 11% expect to visit jewelry stores before February 14.

Royal Asscher Partners With Sparkle Roll

Royal Asscher formed a strategic alliance in China and Macau with the Sparkle Roll Group Ltd., a leading distributor of top-tier luxury goods in China. Under the terms of the agreement, the alliance will run for 10 year period, with an option to renew for an additional decade. Sparkle Roll will facilitate Royal Asscher's growth and expansion of sales of Royal Asscher Cut diamonds, other Royal Asscher jewelry lines and notably the Stars of Africa Collection in China.

Sterling's Injunction Request Denied

Sterling Jewelers lost its request for a preliminary injunction against rival Zale Corporation claiming that Celebration Fire diamonds were the ''most brilliant'' in the world. The judge ruled that Sterling had fallen short of its burden to demonstrate a clear case of irreparable harm to its brand. Additionally, the court determined that Sterling failed to establish that it had no legal remedy and simply argued that Zale's marketing campaign provided competition, which resulted in taking an unfair portion of their market share. The judge stated that such damage would be calculable, not requiring a preliminary injunction. The next step in the case is likely to be a trial.

Juno Lucina Expands Offline

Juno Lucina will expand its specialty jewelry line to select authorized retail locations in 2013, following a sharp increase in sales this past year. The brand, which was previously available only at JLucina.com, first created diamond jewelry ''push presents'' for expectant mothers in 2011, after company founder Erik Kaplan was uninspired by the quality and availability of push presents available for his own expectant wife. Kaplan designed his own push present, styled in the shape of Juno Lucina, the Roman goddess who protected women in childbirth. The line now features diamond pendants, drops and studs and gift sets

Shane Opens Large Format Store

Shane Co. moved its St. Louis, Missouri-area jewelry retail store to a new location at 9643 Olive Boulevard in Olivette. The new address replaced a previous location in Brentwood, but the retailer also stated that this store represents the largest jewelry store in the Midwest. The store features flat panel TV screens showing educational material for jewelry and behind-the-scenes videos about gemstone buying, in-house designing and profiles of salespeople. Shane Co. created a large diamond viewing area where customers can examine and compare diamonds in natural light and a customer lounge area with a flat panel TV
Ross-Simons Preps Sidney Thomas Jewelers

Ross-Simons plans to rename 10 stores this year as Sidney Thomas Jewelers with a focus on higher-end jewelry and a much more pampered customer experience. The retailer's catalog, two outlet stores and its flagship space in Rhode Island would retain the store's original name. Sidney Thomas Jewelers has already secured its trademark, domains and social media presence in preparation for rebranding in the third quarter. The late Sidney Thomas Ross founded Ross-Simons in 1952.


GENERAL



GJEPC Lobbies for Duty Free

The Gem & Jewellery Export Promotion Council (GJEPC) lobbied the government for duty free import quotas (with limits) for cut and polished diamonds since the levy of 2% duty on polished diamonds lowered trading activity in 2012. India aimed to curb round-tripping with the levy last year. In addition, GJEPC recommended correctly implementing the Benign Assessment Procedure of Income Tax for the diamond industry in the way of reduction of net profit to 2.5% of turnover instead of 6%. GJEPC urged the government to establish special notified zones for importing and trading of rough diamonds; and a special $3 billion to $5 billion fund to refinance borrowing by export industries.

Izhakoff Steps Down in June

Eli Izhakoff, the longtime president of the World Diamond Council (WDC), will conclude his term on June 30. His decision was not unexpected as he originally informed the board of his intentions in May 2012. Izhakoff has served as president for 13 consecutive years. Izhakoff said that the time had come for the WDC to prepare for the future and a steering committee that he tapped to create reforms would complete the exercise by June.
ADTF Concludes on Positive Feedback

Exhibitors at the fourth annual Antwerp Diamond Trade Fair (ADTF) appeared pleased with the quality of buyers at the invitation-only event and reported better sales activity than the previous show. A few logistical issues frustrated some attendees, however, the overall mood was positive. Buyers expressed satisfaction with the availability of goods and some, who had made their first trip to Antwerp for this event, were pleased to have met new suppliers and establish new business relationships.

MINING



Marange Operators Export $685M in Rough

The Zimbabwe Mining Development Corporation (ZMDC) reported that four companies operating in the Marange earned a total of $684.5 million from diamond exports in 2012. Mbada Diamonds contributed $308.3 million in exports, Anjin sold and exports $209.9 million, Diamond Mining Corporation exported $100.8 million and Marange Resources $236,317 worth of rough. Diamond royalties to the government came to $102.7 million and the diamond companies received $10.2 million from sales to local diamond and polishing companies. ZMDC predicted that rough diamond output in 2013 would double to 16.9 million carats.
Gem Diamonds Revenue -30%

Gem Diamonds reported that sales from the Letšeng mine in Lesotho fell 41% year on year to $48.2 million as rough ‎prices slumped in 2012. ‎Gem Diamonds sold 28,324 carats of Letšeng goods for an average price of $1,703 per carat ‎during the fourth quarter, representing a decline in average prices of 33%, but it was an increase of 2% from the third quarter.‎ Production at Letšeng rose 1% to 30,181 carats during the fourth quarter. ‎Full year production increased 2% to 112,367 carats. Gem Diamonds revenue for 2012 fell 30% to $207.9 million.

Petra's Production +31%

Petra Diamonds' production rose 31% year on year to ‎‎1.247 million carats during the six months that ended on December 31. Revenue during the half year rose 54% to $156.3 million from 1.066 million carats ‎of diamonds sold. The average price achieved at its larger operations was relatively ‎steady. Petra said that run of mine production at Finsch and Cullinan would remain a ‎challenge with volatile grades, due to the aging mine, until new mining areas have been ‎accessed in fiscal 2015.‎

Namakwa Tender Nets $6M

Namakwa Diamonds' recent sale of rough diamonds from its Kao diamond mine in Lesotho fetched $5.5 million and was 100% sold by lot. The company reported that a total of 21,506 carats sold for an average price of $254.74 per carat compared with $384 per carat achieved at the previous sale, which was held in December. The company is also in the process of investigating several initiatives to modify and improve the recovery process, which will affect production at the plant as the company will need to shut it down for repair work to be done.
Lucara Nets $54M in 2012

Lucara Diamond Corp. reported it had produced 303,060 carats of diamonds from the Karowe diamond mine in 2012, and it conducted five sales of rough diamonds for a total of $54 million in revenue. Lucara sold an exceptional 9.46-carat blue diamond for $4.5 million or $447,272 per carat during the year.
ECONWATCH



Diamond Industry Stock Report

U.S. retail shares decidedly mixed but Birks, Blue Nile and Zale up about 5%, European shares all down except PPR; Chow Sang Sang and Chow Tai Fook down 2%, India shares flat except C. Mahendra -14%, Asian Star +10%. Mining shares lower with double digit drops for Firestone and Namakwa. Read the extended industry stock report for this past week
$1 = Euro 0.736 0.748 -0.012
$1 = Rupee 53.27 53.68 -0.4
$1 = Israel Shekel 3.71 3.71 0.00
$1 = Rand 8.95 9.05 -0.10
$1 = Canadian Dollar 1.00 1.00 0.00

Precious Metals
Gold $1,663.80 $1,668.00 -$4.20
Platinum $1,675.00 $1,679.00 -$4.00

Stock Indexes Chng.
BSE 19,894.98 19,923.78 -28.80 -0.1%
Dow Jones 13,865.95 13,825.33 40.62 0.3%
FTSE 6,278.88 6,264.91 13.97 0.2%
Hang Seng 23,729.53 23,598.90 130.63 0.6%
S&P 500 1,498.28 1,494.82 3.46 0.2%
Yahoo! Jewelry 1,182.24 1,166.07 16.17 1.4%
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Rapaport Weekly Market Comment Feb. 8, 2013


Far East wholesalers on vacation. Markets hoping for strong jewelry sales during Chinese New Year Golden Week. U.S. retailers offering deep discounts to increase Valentine’s Day sales. Indian consumer sentiment weakens as economic growth slower than expected and new 6% tax reduces gold imports. India approves bonded warehouses in duty free zones for diamonds and gems. 1 ct. RapNet Diamond Index (RAPI) +0.1% in Jan.‎ Swiss watch exports +11% to $23B in 2012. BHP Billiton's partners drop action to block Ekati sale. Rapaport Group opens new India headquarters at Bharat Diamond Bourse. Rapaport Group wishes everyone a prosperous Year of the Snake.


RapNet Data: Feb. 7

Diamonds 921,432
Value $6,050,014,751
Carats 1,026,210
Average Discount -27.51%

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February
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QUOTE OF THE WEEK
We think consumption will be one of the key drivers of the Chinese economy this year. And the consumer should be stronger because of more confidence, faster economic growth and fast gains in income. So retail sales should be good and that should be reflected in the data we get for the Lunar New Year sales that will come out later in the month.

Dariusz Kowalczyk | Credit Agricole

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INDUSTRY



Polished Prices +0.1% in January

The RapNet Diamond Index (RAPI™) for 1-carat certified polished diamonds rose 0.1% in January, RAPI for 0.3-carat diamonds increased 0.9%, while 0.5-carat ‎stones fell 0.1% and 3-carat diamonds declined by 0.3%. Prices have held ‎relatively steady in the past three months, easing the downtrend that was prevalent for ‎most of 2012.‎ Far East demand was steady ahead of the Chinese ‎New Year Golden Week. Tight rough supply has also spurred polished demand resulting ‎in shortages of select in-demand stones, ‎such as non-tinted, 0.40-carat to 0.90-carat, G-, VS-SI, Triple Ex goods.

A possible increase in polished supply may ease those shortages after ‎diamond cutters increased their rough buying in the fourth quarter and have begun to ‎ramp up their manufacturing to pre-Diwali levels. As a result, trading on the rough dealer ‎market improved in January, and prices increased slightly. De Beers held its prices ‎basically stable at its sight but the mining company continues to restrain production.

For more detail, Rapaport Research's ''Snake-Like Stability'' report is available for purchase.

Swiss Watch Exports Soar

WATCH NOW: The Swiss watch industry recorded a 10.9% jump in the value of watch exports in 2012, at $23.4 billion, according to the Federation of the Swiss Watch Industry trade group. Month-to-month variations in exports were more pronounced in the second half as the market weakened and exports contracted in September and December. Swiss watch industry exports were comprised mainly of wristwatches, which rose 11.5% to $22 billion; however, the number of units shipped fell 2.2% to 29.1 million. Higher-priced watch exports rose



RETAIL & WHOLESALE



U.S. January Sales

U.S. chain-store sales rose 4.5% year on year in January, according to the International Council of Shopping Centers (ICSC). Drug stores, which have been a drag on sales, experienced a surge and consumers went bargain hunting at department and apparel stores, providing a much needed lift. For the fiscal year of 2012, ICSC said chain-store sales rose 2.1%.

The the following table reflects quarterly results for the period through the end of January:
$Mil %Chng. Comps %Chng
Costco $43,770 9% 6%
Kohl's $6,343 5.4% 1.9%
Macy's $9,350 7.2% 3.9%
Neiman Marcus $1,360 6.5% 5.3%
Nordstrom $3,596 13.5% 6.3%
Target $22,370 6.8% 0.4%

Arjav, ABN Amro Reach Deal

Arjav Diamonds in Antwerp and ABN Amro reached an agreement to settle all pending legal disputes arising from their former commercial relationship. While both parties agreed to not disclose details, ABN Amro and Arjav discontinued measures introduced or brought against each other, and ended their relationship. In December, ABN Amro had Arjav's safes sealed negotiations failed regarding the diamond company’s debt. Arjav filed a counter claim against the bank for damages.
Swatch Profit +26%

The Swatch Group's net income rose 26% to $1.78 billion in 2012 and is subsequently optimistic about its long term growth prospects going into 2013. This past month, the Swiss watchmaker reported that its sales increased 14% to $8.94 billion.

Kristall's Revenue -18%

Kristall's sales fell 18% in 2012 to $457 million primarily due to a weaker second half and late year loss from the resale of rough diamonds, the company told Interfax. Polishing was also unprofitable, however, conditions have improved. Kristall closed 2012 with a pretax profit of $1.6 million.



India Approves Bonded Warehouse Provision

India re-introduced a provision for private/public bonded warehouses in Special Economic Zones (SEZs) and Domestic Tariff Areas for importing and exporting diamonds and gemstones. The Gem & Jewellery Export Promotion Council (GJEPC) stated that after the imposition of a 2% import duty on polished diamonds in January 2012, it lobbied the Department of Commerce to re-introduce facilitating bonded warehouses.

The government also allowed for single revolving bank guarantees on different transactions for the import of silver or gold or platinum for the gems and jewelry sector. The bank guarantee furnished by the importer can be used for subsequent consignments, if the importer has fulfilled the export obligation and export proceeds realized in respect of the earlier consignments. The bank guarantee may be used for subsequent import consignments, provided it is sufficient to cover the duty involved and has validity for a sufficient time period with a self-renewal provision built in.

RBI Weighs Recommendations on Gold

The Reserve Bank of India (RBI) will weigh a panel study recommending measures such as introducing new gold-backed financial products, designing inflation indexed bonds and prohibiting bank finance for purchases of gold bullion to curb demand. There is a need to moderate the demand for gold imports, considering its impact on the current account deficit, which hit a record high of 5.4% of the gross domestic product (GDP) in the second fiscal quarter that ended in September.

A combination of demand reduction measures, supply management measures coupled with measures to increase monetization of idle stocks of gold need to be put in place, the panel concluded. The government has increased gold import duty for the third time in about a year, while appealing to the people to moderate their demand. The duty currently stands at 6%.

Forevermark Expands in India

Forevermark will expand its reach to 130 stores in India by the end of this year. De Beers launched Forevermark in India two years ago and has grown to 85 doors. Its newest retail partnership is with Mumbai-based Kundan Jewellers. Actress Suhasi Dhami also unveiled the Forevermark Encordia collection, which is comprised of exquisite jewelry pieces with contemporary designs in rings, bracelets, pendants and earrings.

JVC Guide Addresses Trade Materials

The Jewelers Vigilance Committee (JVC) published “The Essential Guide to the U.S. Trade in Materials From Plant and Wildlife Products” in partnership with the American Gem Trade Association (AGTA). The guide concentrates on gem materials that have been classified by international, federal, and/or state laws as protected. The guide includes information that jewelry manufacturers must be familiar with and follow, including important laws governing the trade in protected species; USFWS import/export license and filing; exemptions for jewelry retailers and collectors; obtaining permits and filing declarations; penalties and fines and state laws.

India's Luxury Growth Set at 15%

India’s luxury market is likely to touch $15 billion by 2015, rising 25% per year from the current level of $8 billion, according to an ASSOCHAM-Yes Bank report. Consumer spending is also likely to rise across the country due to increasing brand awareness amongst young shoppers and from greater purchasing power out of the upper classes in Tier 2 and Tier 3 cities. Luxury product sales, of which 31% include jewelry, are projected to rise to $5.38 billion in 2015 from $2.85 billion this year. ASSOCHAM also noted that private equity (PE) investments in the luxury sector would rise and support the enhanced size of the country's luxury market. Globally, consumer spending is forecast to reach $40 trillion by 2020.

MINING



Fipke Drops Ekati Action

C. Fipke Holdings Ltd. discontinued its court action against BHP Billiton Canada and Harry Winston Diamond Corp., Stuart Blusson, Archon Minerals and various associated companies in conjunction with the Ekati mine sale. Harry Winston, which bid to purchase Ekati for about $500 million, has been advised by BHP that all of Ekati's joint venture partners agreed to waive their rights of first refusal in respect of the sale. The sale may now proceed, subject to satisfaction of closing conditions, including regulatory approvals. BHP hoped to finalize the sale in the second quarter.

Paragon's Lemphane Update

Paragon Diamonds Ltd. reported that a 3.71-carat, sawable rough diamond achieved the value of more than $2,300 per carat out of its Lemphane kimberlite project in Lesotho. WWW International Diamond Consultants tested and valued the diamond along with a parcel of 114 carats produced during bulk sampling at Lemphane, but the results were considered to be encouraging overall, indicating the presence of large, high-value diamonds in the kimberlite. The company will commission WWW to model the diamond prices once the bulk sampling has produced a parcel of about 1,000 carats.
Lucara Production, Sales Rise

Diamond production for Lucara Diamond Corp. rose to 303,060 carats in 2012 from 14,773 carats in 2011, with all production originating from the Karowe mine in Botswana. Five sales generated $54 million in revenue. Lucara started trial mining at its Mothae project in Lesotho and transitioned the project to a smaller care and maintenance team. The company noted that it would continue to look into development options for Mothae, as a preliminary economic assessment indicates that the project is at present not feasible.


Canada's Ice Road Opens

The Diavik Diamond Mines, in Canada’s Northwest Territories, began its annual mine resupply program and expects to transport approximately 3,500 loads of fuel, cement and other operating supplies using the winter ice road. The Tibbitt to Contwoyto Winter Ice Road opened on January 30 and supplies three diamond mines, Diavik, Ekati and Snap Lake, and various exploration companies. It is expected to transport approximately 7,500 loads northbound from Yellowknife.



ECONWATCH



Diamond Industry Stock Report

Jittery retail environment sank most U.S. and European shares with Blue Nile -6%, JCP -4%, Tiffany -5%, LVMH -6%; Indian shares and miners were mixed.. Read the extended industry stock report for this past week
Feb. 7 Jan. 31 Chng.
$1 = Euro 0.746 0.736 0.010
$1 = Rupee 53.22 53.27 -0.1
$1 = Israel Shekel 3.69 3.71 -0.02
$1 = Rand 8.91 8.95 -0.04
$1 = Canadian Dollar 1.00 1.00 0.00

Precious Metals
Gold $1,671.40 $1,663.80 $7.60
Platinum $1,718.00 $1,675.00 $43.00

Stock Indexes Chng.
BSE 19,580.32 19,894.98 -314.66 -1.6%
Dow Jones 13,944.05 13,865.95 78.10 0.6%
FTSE 6,228.42 6,278.88 -50.46 -0.8%
Hang Seng 23,177.00 23,729.53 -552.53 -2.3%
S&P 500 1,509.39 1,498.28 11.11 0.7%
Yahoo! Jewelry 1,155.08 1,182.24 -27.16 -2.3
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Rapaport Weekly Market Comment Feb. 15, 2013


Shortages driving rough prices higher with some DTC boxes trading at 5%. Polished prices flat and not supporting rough increases. Triple Ex bringing 5-10% premiums. Steady gold jewelry sales during China’s Golden Week but authorities restrict luxury advertising. Rio Tinto 2012 diamond sales +2% to $741M, loss of $43M. Gitanjali Gems 3Q sales +27% to $810M, profit +34% to $32M. Shrenuj & Co. 3Q sales +60% to $266M, profit +13% to $4M. Blue Nile’s 4Q revenue +21% to $136M, net income +17% to $5M. U.S. Dec. polished imports -13% to $1.4B. Belgium Jan. polished exports +9% to $891M. Hong Kong 2012 polished imports -4% to $17B.


RapNet Data: Feb. 14

Diamonds 935,863
Value $6,059,894,152
Carats 1,032,525
Average Discount -27.44%

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RAPAPORT ANNOUNCEMENTS


February
12-20
Tue-Wed


Rapaport Single Stone Auction
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Feb-Mar
27-8
Wed-Fri


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March
5-9
Tue-Sat


Rapaport at HK Intl. Jewelry Show

List your diamonds, company name and booth location on the complimentary RapNet show listings diamond search. Register now.

Visit Rapaport in Hall 3-G, Booth B42



QUOTE OF THE WEEK
Trends in luxury consumption in the U.S. have continued to outperform overall consumer trends. Where some have gone too far is in thinking Middle America is going to be buying luxury.

Antoine Belge | HSBC









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INDUSTRY



Gold Jewelry Demand +4%

Global gold demand reached a record of $236.4 billion in 2012, up 2% year on year, according to the World Gold Council. The fourth quarter experienced the strongest performance as demand rose 6% to $66.2 billion. The value of gold jewelry demand improved 4% during the year to a record $102.6 billion. The average price of gold during 2012 was $1,669 per ounce, up 6% from 2011. By value, annual gold jewelry demand in China rose 6% to $29.3 billion, but it fell 3% to $29.7 billion in India. Gold jewelry demand in Indonesia rose 9% to $1.7 billion and it was up 3% to $7.9 billion in the Middle East. Turkey's gold jewelry demand jumped 7% to $3.7 billion, while Russia's demand surged 12% to $4.4 billion. Jewelry demand dropped 2% in the U.S. to $5.8 billion and it fell 7% in Europe to $2.4 billion.







U.S. Jewelry Store Sales Soar

WATCH NOW: ALROSA recovered a 145-carat rough diamond and estimated it would fetch $1 million at auction. U.S. jewelry store sales surged in December and overall they rose 5.7% in 2012, topping $30.7 billion, or the highest value since 2007. Given the market player contraction since 2007 plus a relatively stable CPI, the improved store sales were certainly solid. U.S. jewelry exports surged 12.4%, while jewelry imports declined 1.9%. Watch imports were flat.







India Plans Rough Hub

India will weigh recommendations designed to make the country an international trading hub for rough diamonds. The proposed concept touches upon special import and trading zones, duty-free rules and creating a beneficiation policy among others. The sector and government alike seek clean and responsible diamond trading, and they are committed to the Kimberley Process Certification Scheme.

The task group in charge of the plan conducted an extensive review of issues related to trade facilitation, taxation, fiscal measures and promotional matters that are in line with similar practices elsewhere. Some of the recommendations include setting up a special notified zone for the import and trading of rough diamonds, permission to import cut and polished diamonds duty-free up to the extent of 15% of the average of a company's previous three years’ exports, and reducing the rate of computation of profit under Benign Assessment Procedure (BAP) from 6% to 2.5%.















RETAIL & WHOLESALE



Blue Nile's Profit +17%

Blue Nile's revenue climbed 21% to $136.1 million for the fourth quarter that ended on December 30. Cost of sales, however, rose 24% to $110.5 million. Income for the quarter increased almost 17% to $4.9 million or 39 cents per share. U.S. engagement sales jumped 31% to $73.6 million, while international sales surged 27% to $20 million. Gross profit for the fourth quarter fell to 18.8% of net sales compared with 20.7% one year earlier. Blue Nile's list of new customers rose nearly 8%. Net cash provided by operating activities totaled $34.4 million for the year compared with only $15.4 million in 2011. Non-GAAP free cash flow was $31.9 million compared with $10.1 million for the previous year.







Gitanjali's Profit +34%

Gitanjali Gems Ltd. reported that group sales rose 27% year on year to $809.5 million during its third fiscal quarter that ended on December 31. Profit increased 34% to $32 million. Sales at the company’s diamond business grew 26% to $347.5 million, while jewelry segment sales increased 28% to $479 million. The company recently opened a factory in Jaipur to manufacture jadau, kundan and polki jewelry.







Shrenuj's Profit +13%

Shrenuj & Co. Ltd. reported that third quarter group sales rose 60% year on year to $265.9 million for the period that ended on December 31, with a strong performance at its diamond business. Group expenditures rose 62% to $254.2 million, however, net profit still grew 13% to $3.9 million. Diamond sales jumped 93% to $222.9 million, while sales from its studded jewelry business declined 15% to $46.5 million.







Sotheby's Jewel Sale Nets $11M

Sotheby's New York sale of important jewels garnered $10,535,820 and was 78% sold by lot. The top lot was a diamond ring of 6.46 carats, E, SI1, type IIa and set in platinum that sold to an anonymous buyer for $560,500 or $86,765 per carat, well above estimate. The second and third top lots achieved sales prices far above estimate with a 0.51 carat, VS2 fancy, vivid purplish pink diamond ring by Tiffany & Co. selling for $338,500 and a platinum and diamond bow brooch by Van Cleef & Arpels being sold for $332,500.







Fewer Cite Jewelry as Expendable

STORES Magazine’s February survey, conducted by BIGinsight.com, examined products and services that consumers felt were “untouchable” and “expendable” in 2012 and it tracked the past five years of this sentiment. On average, 53.9% of adults said they cut back on some items and services in 2012, down from more than 76% in 2011. According to 89.1% of respondents, high-end jewelry was expendable in 2012; however, that percentage was down from 92.3% in 2011 and 91% in 2010. Other top expendable items in 2012 included luxury handbags, maid services, clubs and social memberships and high-end cosmetics.







Tiffany Sues Costco for Counterfeiting

Tiffany & Co. sued Costco Wholesale Corporation for trademark infringement, dilution, counterfeiting, unfair competition, injury to business reputation, false and deceptive business practices and false advertising. In November, Tiffany confirmed what it called “Tiffany” diamond engagement rings being promoted and sold at a Costco store in Huntington Beach, California. However, Tiffany found the rings were not Tiffany rings, nor were they manufactured by, licensed by, or otherwise in any way properly associated with the brand. Tiffany charged Costco with leading its shoppers to believe they were purchasing authentic Tiffany products at significant discounts, when in fact, that was simply not true, according to the filing.















GENERAL



Court Dismisses 'Blood Diamond' Libel Suit

Portuguese courts dismissed a libel suit against Rafael Marques and his publisher for "Blood Diamonds: Corruption and Torture in Angola," concluding that the book is protected by free speech laws. The book alleged that Angolan generals own a diamond company and a security firm that carried out killings and the torture of workers in the nation's mines.

Mining company Sociedade Mineira do Cuango and security firm Teleservice-Sociedade de Telecomunicacoes, Seguranca e Servicos filed the complaint against Marques and publisher Tinta-da-China after the book was published. President Jose Eduardo dos Santos' government is accused of corruption and mismanagement of oil and diamond riches.







Global Witness Chides Belgium

Global Witness didn't mince words with Belgium and called upon the European Union (E.U.) to strengthen measures that restrict the sales of diamonds from Zimbabwe’s Marange region to Europe. Belgium is leading the effort to drop sanctions against the Zimbabwean Mining Development Corporation (ZMDC). Global Witness is calling for ZMDC to remain on the list of entities affected by restrictive measures and it urges the addition of Anjin, a joint-venture diamond-mining company with links to senior Zimbabwean military officials, and Hong Kong-based businessman Sam Pa. The group contends that widespread human rights violations continue in the Marange and that diamond sales only benefit President Robert Mugabe's ZANU-PF ruling party.















MINING



Rio Tinto Reports Diamond Ops Loss

Rio Tinto reported that revenue from its diamond operations rose 2% to $741 ‎million in 2012. Despite the increase, the division posted a net loss of $43 million ‎compared with earnings of $10 million the previous year. ‎Production attributed to the company ‎rose 12% to 13.122 million carats during the year. Rio Tinto forecast diamond ‎production of 13.9 million carats in 2013.‎ The company did not provide an update to the strategic review of its diamond business.







De Beers Commits $2B to Venetia

De Beers will invest approximately $2 billion to build a new underground mine beneath the currently operating open pit Venetia diamond mine in Limpopo Province, South Africa. When completed, the underground operation will extend the life of Venetia until 2042 and replace the open pit as South Africa’s largest diamond mine. De Beers has received final outstanding regulatory clearances earlier this month. Underground operations will begin production in 2021, yielding approximately 96 million carats during the life of the mine.








Libera Threatens Miners Employing Children

Children in Liberia are reportedly dropping out of school to mine diamonds, but the government is threatening to crack down on the miners who are illegally employing these children. No one under 18 is permitted to work at diamond mines. However, the miners contend that children, with their small body size, fit perfectly into narrow tunnels below the surface to dig for diamonds.

Liberia's Ministry of Lands, Mines and Energy estimates that at least 1,500 children are currently employed by Liberian diamond mines. Liberia's unemployment rate is near 85% and about 95% of the population is living on less than $2 a day. The prospect of earning $50 for each diamond is too good for any age group to turn down. The government is threatening to revoke mining licenses, shut down mines and take legal action against any firm found to be employing children.







NT, Harry Winston Negotiate Supply Term

The Northwest Territories (NT) of Canada is negotiating a diamond allocation agreement with Harry Winston Diamond Corp. in support of local processing. Building the diamond manufacturing sector is one of the ways the government is working to achieve a diversified economy. These agreements with rough producers are intended to allow area diamond manufacturers to purchase diamonds from a percentage of the value of producers’ mine production, helping to support the sector.

Harry Winston expects to close on its $500 million purchase of the Ekati diamond mine from BHP Billiton by the second quarter, and complete the sale of its retail division to the Swatch Group for $1 billion by midyear at which time it would change its name to the Dominion Diamond Corp.







Stellar Secures $2M, Starts Studies

Stellar Diamonds raised approximately $1.76 million from a share placement and subscription of 41,960,640 new ordinary shares. The placement represented approximately 12.5% of the enlarged share capital. Proceeds will be used to advance the company's pasting project in Guinea and its Tongo project in Sierra Leone, including economic scoping studies, which commenced this week.

The studies will determine a financial base for projects ahead of prefeasibility and are being conducted by Paradigm Project Management. Tongo and Droujba currently have a combined inferred diamond resource of four million carats. Studies will center upon mine design and planning, treatment plant, ore processing options, capital budgeting, infrastructure options and operating cost analysis.















STATS



Hong Kong

2012 $Mil. %Chng.
Polished imports $16,573 -4%
Polished exports $11,528 -11%
Net imports $5,044 23%

Rough imports $1,696 -15%
Rough exports $1,878 10%
Net imports ($183)

Net diamond account $4,862 11%







U.S.A

Dec. $Mil. %Chng. 2012 $Mil. %Chng.
Polished imports $1,345 -13% $19,637 -10%
Polished exports $1,246 -3% $17,779 -7%
Net imports $99 -62% $3,049 -22%

Rough imports $97 87% $550 -13%
Rough exports $54 39% $351 -17%
Net imports $43 207% $202 0%

Net diamond account $142 -48% $3,251 -21%







Belgium

Jan. $Mil. %Chng.
Polished exports $891 9%
Polished imports $1,134 -2%
Net exports ($243)

Rough imports $1,115 6%
Rough exports $1,058 7%
Net imports $57 -7%

Net diamond account ($399) 0%















ECONWATCH



Diamond Industry Stock Report

Retail shares largely unchanged in the U.S. and Europe, Indian shares mixed. Mining shares mainly higher with Gemfields (+20%) leading the way. Read the extended industry stock report for this past week
Feb. 14 Feb. 7 Chng.
$1 = Euro 0.749 0.746 0.003
$1 = Rupee 53.94 53.22 0.7
$1 = Israel Shekel 3.68 3.69 -0.01
$1 = Rand 8.79 8.91 -0.12
$1 = Canadian Dollar 1.00 1.00 0.00

Precious Metals
Gold $1,635.30 $1,671.40 -$36.10
Platinum $1,708.00 $1,718.00 -$10.00

Stock Indexes Chng.
BSE 19,497.18 19,580.32 -83.14 -0.4%
Dow Jones 13,973.39 13,944.05 29.34 0.2%
FTSE 6,327.36 6,228.42 98.94 1.6%
Hang Seng 23,413.25 23,177.00 236.25 1.0%
S&P 500 1,521.38 1,509.39 11.99 0.8%
Yahoo! Jewelry 1,167.50 1,155.08 12.42 1.1%
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Rapaport Weekly Market Comment Feb. 22, 2013


Diamond markets stable with strong demand for finest cut 3X under 1ct., F-I, ‎VS-SI stones. Large capes and very large 10ct.+ better goods improving. Other ‎categories weak. Expectations for low rough supply and steady prices at next week’s ‎DTC sight. De Beers 2012 rough sales -15% to $5.5B, earnings -49% to $506M, average ‎rough price -12%. BHP 1H diamond revenue -44% to $199M, deficit before tax of $37M ‎vs. profit of $120M. India’s Jan. polished exports -7% to $1.7B, rough imports -11% to ‎‎$986M. ‎ Zale’s 2Q revenue +1% to $671M, profit +43% to $41M. Security alert after ‎‎$50M diamond heist at Brussels airport and $4M hit on De Beers Paris store.‎


RapNet Data: Feb. 21

Diamonds 944,530
Value $6,000,082,774
Carats 1,036,097
Average Discount -27.31%

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RAPAPORT ANNOUNCEMENTS


Feb-Mar
27-8
Wed-Fri


Rapaport Melee Auction
New York & Hong Kong

View details.



March
5-9
Tue-Sat


Rapaport at HK Intl. Jewelry Show

List your diamonds, company name and booth location on the complimentary RapNet show listings diamond search. Register now.

Visit Rapaport in Hall 3-G, Booth B42


March
5-13
Tue-Wed


Rapaport Single Stone Auction
New York & Israel

View details.



March
18
Mon


Intl. Diamond Week in Israel

Martin Rapaport will deliver his “State of the Diamond Industry” presentation at 4 p.m. in the Israel Diamond Exchange.



QUOTE OF THE WEEK
I am certain [the Brussels airport heist] was an inside job. It was incredibly audacious and well organized. In big jobs like this we are often surprised by the level of preparation and information. They know so much they probably know the employees by name.

Doron Levy | Ofek
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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



Brinks Compensates Brussels Heist Losses

Brinks compensated its clients for losses suffered from the Brussels airport heist on February 18. All customers were paid within 48 hours of the robbery; and while Brinks did not provide the exact amount of claims, approximately $50 million worth of rough and polished diamonds were stolen during the armed heist, according to the AWDC. Brinks has the exclusive handling license for cash-in-transit operations at the Brussels airport. Goods transported by other companies are transferred to the Brinks vaults at the airport and subsequently handled by Brinks within the airport facility. An investigation continues into the robbery, while speculation abounds in the press for how the heist was orchestrated.
De Beers Earnings -49%

De Beers reported 2012 revenue fell 16% year on year to $6.1 billion and rough diamond sales fell 15% to $5.5 billion. Earnings dropped 49% to $506 million. Rough diamond prices decreased 12% during the year, which De Beers contended was in line with a drop in polished diamond prices. Diamond production fell 11% to 27.9 million carats. Free cash flow fell to $697 million from ‎$816 million in 2011, but net debt was reduced to $722 million, excluding shareholder loans, from $1.177 billion in 2011. Exploration investment rose to $59 million from $46 million the year before.

De Beers expects moderate growth for diamond jewelry demand in 2013, ‎supported primarily by a more positive outlook from China and India compared with 2012. Some upside is possible in the U.S., while trading conditions in other developed ‎markets are likely to be challenging. The rough diamond manufacturing sector closed ‎‎2012 with high levels of inventory, particularly in the higher-end categories of diamonds, ‎and faces continued pressure in terms of midstream liquidity. In the medium to long term, ‎industry fundamentals are expected to strengthen as diamond production plateaus and ‎demand continues to increase.‎

EU Eases Zimbabwe Sanctions

WATCH NOW: Catherine Ashton, the High Representative of the European Union's (EU) foreign affairs council, and William Hague, Foreign Secretary of the U.K., comment after the vote to ease some restrictions on Zimbabwe ahead of its constitutional referendum vote in March. EU sanctions are reviewed annually and this year Belgium lobbied to strike the Zimbabwe Mining Development Corporation (ZMDC) from EU trade restrictions; however, that was not approved just yet pending transparent presidential elections, which are tentatively planned for July.

U.S. sanctions remain on ZMDC along with the Minerals Marketing Corporation of Zimbabwe, Mbada Diamonds, Marange Resources and its Block Wood Mining company, and numerous individuals in the ruling party, some of whom the U.S. State Department determined to have ties to diamond mining firms. The full list can be found here
RETAIL & WHOLESALE



Zale's Profit Jumps to $41M

Zale Corporation's second-quarter revenue rose 1% year on year to $670.8 million for the three months that ended on January 31. Same-store sales rose 2.8%. Cost of sales rose 0.9% to $331.1 million. Net earnings jumped to $41.2 million from $28.8 million one year ago. Zales brand stores, consisting of Zales Jewelers and Zales Outlet, posted a comparable-store sales increase of 3.6%, compared with an increase of 10.1% one year ago. U.S. fine jewelry brands including Gordon’s Jewelers, posted a comparable store sales increase of 2.8%, following an 8.9% rise in the same period last year.
Rajesh Exports' Profit +15%

Rajesh Exports Ltd. reported that sales rose 20% year on year to $1.45 billion, during its third fiscal quarter that ended on December 31. Growth was driven by its export and retail businesses. Expenses were up 21% to $1.42 billion, but profit increased 15% to $24.4 million. The company had outstanding orders worth $1.26 billion as of December 31.


Jewelry CPI -4%

The U.S. consumer price index (CPI) for jewelry eased again in January, falling 3.5% year on year to 176.7 points in response to marginally weaker prices for precious metals. The index was just a touch lower than December's reading, which was revised lower than originally stated to 176.8 points. Nonetheless, the CPI maintained a historically strong trend and January marked 25 consecutive months of a reading of more than 170 points.

Gunmen Holdup De Beers Paris Shop

Two armed men, allegedly wearing bullet-proof vests stole approximately $4 million worth of goods from a De Beers boutique at Printemps in central Paris on Tuesday. The men sought the sales associate to open two display cases at 6:45 p.m., or about one hour before closing time. The gunmen grabbed diamond jewelry and fled using a staircase at the rear of the building. No injuries were reported and most shoppers in the crowded shopping center at the time were unaware the heist took place.

JA Member Weighs in on Marketplace Fairness Act

Jewelers of America's (JA) board member James Rosenheim, the CEO of Tiny Jewel Box in Washington, D.C., participated in the Marketplace Fairness Coalition briefing Wednesday urging ''efairness'' for small business owners in support of the Marketplace Fairness Act of 2013. Participants highlighted reasons to pass the law, which would close a tax loophole excluding online retailers from collecting and remitting state sales tax.

Retailers noted that the law would not create any new tax, but instead, just level the playing field online and offline. Loss of sales tax revenue, they added, also hurts society as it places undue burden on local communities where small businesses operate brick-and-mortar stores. It is estimated that up to $23 billion in sales tax revenue is lost each year due to this loophole.

Sarin's Profit -20%

Sarin Technologies ‎reported that its profit fell 20% year on year to $3.8 million during the fourth quarter ‎that ended on December 31.‎ The decline resulted from lower gross margins associated with the ‎composition of products sold, coupled with an increase in third-party commissions. Revenue ‎rose 1% to $14.2 million during the quarter. Sarin estimated that manufacturing in India fell by about 40%, while the figure was 20% lower in Belgium and ‎Israel during the third quarter

GENERAL



India to Suspend Thai Gold Jewelry Imports

India is planning to suspend gold jewelry imports from Thailand over concerns that incoming jewelry does not have 20% added value as stipulated in the foreign trade agreement between the two countries. The Department of Commerce has asked the Department of Revenue to issue a notice suspending the imports under the provisions of Early Harvest Scheme until the certificates of origin issued by Thailand are verified to India's satisfaction. The Early Harvest Scheme, signed by India and Thailand in 2004, allows imports of gold jewelry at a lower duty of 1%, while such imports from other countries are charged around 11%.
IDE Preps for Buyers Week in March

The Israel Diamond Exchange (IDE) will host a buyers week from March 17 to 20 aimed at providing a range of business opportunities for IDE members. Buyers will be offered complimentary hotel accommodation at the Leonardo Hotel, located opposite the Ramat Gan diamond exchange complex. Archos, the Israeli subsidiary of Russia's ALROSA, will hold a tender of diamonds of 10.8 carats and larger; De Beers' rough diamond-auction unit, Diamdel, will hold two auctions, one for rough diamonds larger than 5 carats, and one for rough of 2.50 carats to 4 carats; I. Hennig & Co. Ltd. and Fusion Alternatives Tenders will hold a joint rough diamond tender and eDiamond will stage an online tender. The Rapaport Group will hold a polished diamond auction and Tzoffey's 1818 will stage an exclusive auction for special loose diamonds and extraordinary diamond jewelry pieces.

Stable Outlook Supports Indian Exporters

IndiaRatings & Research (IRR), a Fitch Group Company, issued a ''stable outlook'' for the gems and jewelry exporters and ''stable to negative outlook'' for domestic jewelry retailers in 2013. The analysts concluded that while exporters were likely to report better revenue growth this year, margins may be on par with 2012; whereas domestic retailers were likely to report lower revenue growth and marginally lower margins. Retailers who are aggressiving adding stores may be at the greatest risk.

IRR anticipated export slippage to stop this year, as the markets in Hong Kong, Dubai and Singapore improve, while the U.S. remains steady. IRR determined that liquidity is likely to remain stretched in 2013, and inventory levels are likely to increase moderately on account of slowing sales and new store openings that would keep the inventory requirements high during the year.

Although retailers tried to reduce inventory levels in 2012, by offering higher discounts, suppliers lowered their credit period for domestic jewelers.


MINING



BHP's Diamond Revenue -44%

BHP Billiton's revenue from its diamond operations fell 44% year on year ‎to $199 million in the six months that ended on December 31. Underlying earnings ‎before interest and tax fell to a deficit of $37 million compared with a profit of $120 million a year ‎earlier. Diamond production fell 35% to 608,000 carats.‎ BHP Billiton recently agreed to sell its interest in Ekati to Harry Winston Diamond Corporation ‎for $500 million. The transaction is expected to close in the first half of calendar 2013. ‎Net operating assets of the diamond division were valued at $487 million on December 31, down from $815 million a year earlier. ‎



Gemfields Selects Kunis for Campaign

Gemfields named actress Mila Kunis as the company’s new brand ambassador and face of its latest advertising campaign. Kunis was photographed by Mario Sorrenti and styled by Anastasia Barbieri. The campaign features a fresh-faced and modern Kunis wearing one-of-a-kind emerald and ruby jewelry created by six of Gemfields’ designer partners: Alexandra Mor, Amrapali, Dominic Jones, The Gem Palace, Sutra and Fabergé. Kunis said that she was impressed with Gemfields' practice of ethical mining.
STATS



India

Jan. $Mil. %Chng.
Polished exports $1,689 -7%
Polished imports $598 -39%
Net exports $1,091 30%

Rough imports $986 -11%
Rough exports $173 13%
Net import $813 -15%

Net diamond account $278

ECONWATCH



Diamond Industry Stock Report

U.S. stocks were down moderately, but Zale was down 20%. European and Indian shares were mixed. Mining shares mainly lower except Firestone (+20%). Read the extended industry stock report for this past week
Feb. 21 Feb. 14 Chng.
$1 = Euro 0.758 0.749 0.009
$1 = Rupee 54.48 53.94 0.5
$1 = Israel Shekel 3.70 3.68 0.02
$1 = Rand 8.90 8.79 0.11
$1 = Canadian Dollar 1.02 1.00 0.02

Precious Metals
Gold $1,576.50 $1,635.30 -$58.80
Platinum $1,612.00 $1,708.00 -$96.00

Stock Indexes Chng.
BSE 19,325.36 19,497.18 -171.82 -0.9%
Dow Jones 13,880.62 13,973.39 -92.77 -0.7%
FTSE 6,291.54 6,327.36 -35.82 -0.6%
Hang Seng 22,906.67 23,413.25 -506.58 -2.2%
S&P 500 1,502.42 1,521.38 -18.96 -1.2%
Yahoo! Jewelry 1,163.49 1,167.50 -4.01 -0.3%
_______________
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Moderátor
A co ta bruselská loupež? To je taky dost zajímavost ve světě diamantů. ;)
Registrovaný uživatel
Zaujímavosť určite je , mimoriadne profesionalna práca , nikto nebol zranení a na sekundu presná , holt nebola to práca " břídilů". ;)
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Rapaport Weekly Market Comment March 1, 2013


Cutting center sentiment improving with rising expectations for Hong Kong show but Far East demand still restrained. Prices for normal rough up 4-6% but very large 15 ct.+ rough surging with some prices up over 12%. CAUTION: SPECULATIVE ROUGH FRENZY APPEARS UNSUSTAINABLE. Large polished moving better but not booming. Mid quality VS-SI polished steady with excellent demand for 3X. De Beers sight est. $550M with ‎re-assortments adjusting prices upward ‎some 4%. Pandora 2012 revenue flat at $1.2B, profit -41% ‎to $211M. Petra Diamonds 1H revenue +63% to $152M, net loss of $15M vs. loss of ‎‎$27M. Forevermark grades $500M worth of diamonds in 2012.‎


RapNet Data: Feb. 28

Diamonds 931,457
Value $6,224,144,166
Carats 1,033,796
Average Discount -27.36%

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RAPAPORT ANNOUNCEMENTS


Feb-Mar
27-8
Wed-Fri


Rapaport Melee Auction
New York & Hong Kong

View details.



March
5-9
Tue-Sat


Rapaport at HK Intl. Jewelry Show

List your diamonds, company name and booth location on the complimentary RapNet show listings diamond search. Register now.

Visit Rapaport in Hall 3-G, Booth B42


March
5-13
Tue-Wed


Rapaport Single Stone Auction
New York & Israel

View details.



March
18
Mon


Intl. Diamond Week in Israel

Martin Rapaport will deliver his “State of the Diamond Industry” presentation at 4 p.m. in the Israel Diamond Exchange.



QUOTE OF THE WEEK
India's Finance Minister has correctly sought to divert some of the demand for gold from the ‎investment sector to financial instruments, like inflation-indexed bonds and others which will ‎not impact the more productive jewelry sector.

Mehul Choksi | Gitanjali Group

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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



India's Budget Avoids Legacy Trade Issues

India’s gem and jewelry trade was relieved that the government didn’t hike ‎the country’s gold import duty again as part of the federal budget for fiscal 2013-14 but they were also disappointed that ‎concerns were not addressed.‎ In January, the ‎government increased the import duty on gold to 6% from 4% in an effort to ‎discourage demand, which has contributed to the country's large current ‎account deficit.‎

Brokerage firm Religare concluded that legacy issues remain, especially measures to curb money-laundering. GJF has already stated that there was a lot of confusion about the amended Prevention of Money-laundering Act that came into effect on ‎February 15.‎ The budget made no mention of the diamond industry’s recommendation to introduce a ‎duty-free import quota for cut and polished stones. The ‎Gem & Jewellery Export Promotion Council (GJEPC) recommended that provision as trading activity suffered since the government imposed a 2% import duty on polished diamonds in January 2012.

India’s deficit hit a record high of 5.4% of its gross domestic product (GDP) in ‎the second fiscal quarter that ended in September 2012.‎ The Finance Minister stated that households must be given incentives to save in financial ‎instruments rather than buy gold.

Buyers Splurge on Fine Jewelry at JA

WATCH NOW: See why exquisite new lines of fine jewelry were a hit at JA New York's winter show. Exhibitors and designers found that unique pieces, even in price points above the midrange, appeared to have won over buyers' interest this year. See Anthony Lent of Anthony Lent & Sons, and designers Holly Dyment and Deborah McLaughlin as they share their passion behind new collections using steel, enamel, diamonds and some unusually perfect and rare gemstones.

Stable Demand Highlights Signature Show

The Mumbai Signature show closed with diamond dealers and jewelry wholesalers feeling fairly ‎satisfied that the market appeared to be stable, even as sales remained relatively muted. Many saw the ‎event as a precursor to the Hong Kong show on March 5, which is expected to provide a stronger ‎and more diverse trading opportunity. Demand for VS-SI goods remained strong, with some supply shortages; local trade focused on dossiers and below carat goods, with steady demand for 0.30-‎carat to 0.50-carat, VS-SI. There was improving demand for VVS and lower colors, particularly from retailers in south India. ‎Pears, marquise and heart shapes were in demand, while princess ‎and cushions remained just stable.


RETAIL & WHOLESALE



Forevermark Grades $500M Worth of Stones

Forevermark inscribed $500 million worth of diamond in 2012, according to ‎Stephen Lussier, the CEO of Forevermark. India accounted ‎for 8% of the brand's sales, having launched in the country in January 2011. The ‎De Beers brand is planning to increase that figure to 20% in the next five years. ‎Revenue from Forevermark rose 50% in 2012 ‎as the brand expanded its retail partnerships by 40% to more than 900 doors. In ‎India, the brand is now present in about 85 doors with plans to expand to around 130 by ‎the end of 2013.

Pandora Profit -41%

Pandora reported that group revenue was flat in 2012 at $1.17 billion, while gross margin as a percentage of sales slipped to 66.6% from 73% one year ago. Profit plunged 41% to $211 million. Free cash flow dropped 31% to $202 million. Pandora terminated its arrangement with distributor Verite Co. Ltd. for Japan, and entered into a new deal with Bluebell Japan Ltd. for the region. The jeweler expects to open about 150 new stores globally this year, launch online retail in Europe and achieve global revenue of about $1.4 billion.

Charles & Colvard Profit Jumps

Charles & Colvard Ltd. reported that its sales rose 40% year on year to $22 million for the year that ended on December 31. Profit rose to $4.4 million, or 22 cents per diluted share, from $1.6 million, or 8 cents per share, in 2011. Loose moissanite gemstone sales increased 24% to approximately $15 million, while finished jewelry sales surged 87% to approximately $7.4 million. The fourth quarter of 2012 included a net income tax benefit of $3.8 million and a second tax benefit of approximately $320,000. The company held no outstanding debt.

JCP Loss Soars to $1B

JCPenney (JCP) reported loss of $985 million, or $4.49 per share, for the year that ended on February 2. Revenue fell 25% year on year to $12.99 billion, same-store sales declined 25.2% and Internet sales plummeted 33% percent to $1 billion. JCP's gross margin in 2012 was 31.3% of sales, compared with 36% one year ago. The company reduced its debt by $250 million in 2012, and it ended the year with $930 million in cash and cash equivalents. Retail analyst Walter Loeb blasted JCP's results, calling the company's turn-around strategy a total farce and predicted that conditions could get even worse.
Nordstrom Profit +20%

Nordstrom reported that fourth quarter revenue jumped 13.3% year on year to $3.7 billion for the period that ended on February 2. Same-store sales rose 6.3% company-wide; however, full-line Nordstrom comparable-store sale increased only 2.2%. Profit surged 20% to $284 million or $1.40 per diluted share. Gross profit, as a percentage of net sales, was flat. Markdown improvements were offset by higher expenses associated with the retailer's ''Fashion Rewards'' program, which generated incremental sales and attracted new members. Top performing merchandise categories included men’s apparel, cosmetics, children's apparel and women’s apparel.

TBZ Opens in Raipur

Tribhovandas Bhimji Zaveri (TBZ) of Mumbai will open its first showroom in Chhattisgarh, specifically a 2,900-square-foot store in Raipur at Prem Store on Malviya Road. TBZ stated that its opening of TBZ-The Original was timed to serve shoppers during the Holi festival and pre-wedding buying season with a new bridal collection. This location marks the company's 24th store.

Mouawad Debuts Pearl Suites

Mouawad and RAK Pearls Holding LLC debuted their Flower of Immortality Suite and the Lunar Pearl Suite at the Doha Jewellery & Watch Exhibition this week. The Flower of Immortality Suite features an 18-karat white gold necklace, bracelet, earrings and ring set with 20.46 carats of verdant green emeralds surrounding gem-quality white cultured pearls wrapped in rows of diamonds. The Lunar Pearl Suite is a set of matching necklace, bracelet, ring and earrings in 18-karat white and yellow gold intertwined with 59.13-carats of diamonds surrounded by gem-quality white cultured pearls.


Rebel Chique Diamonds Debuts

Rebel Chique Diamonds by Royal Asscher feature man-made stones and aims change the notion that diamonds are a once-in-a-lifetime heirloom. Rebel Chique expects to tap the advantages that man-made diamonds have over natural stones: they can be cultivated in colors and sizes very rarely encountered in natural diamonds, offer a more personalized diamond experience and remain affordable. The Rebel Chique generation is younger and wants to create its own style icons. All stones will be certified by independent labs to guarantee quality and transparency and to avoid misleading consumers.
TAG Heuer Opens Online Shop

TAG Heuer opened its first online shopping boutique, which the watch brand designed to mimic its "lifestyle lounge" concept and to allow consumers to fully immerse themselves in the brand from any location. TAG Heuer offers high-end timepieces, limited-edition styles and lifestyle accessories such as eyewear, cufflinks, luggage, jackets and more. Shop.TAGHeuer.com showcases the newest collections of TAG Heuer 1887 movements, and it supplements TAG Heuer's luxury boutiques by providing customers from across North America a way to engage the brand directly.
GENERAL



List of Stolen KP Certificates

The World Diamond Council (WDC) and the European Union (EU) provided the following Kimberley Process certificate numbers for rough parcels that were stolen during the Brussels Airport heist. Immediately contact the authorities if you come across any of these certificates.

KIMBERLEY PROCESS CERTIFICATE NUMBERS
EU00503581
EU00503589
EU00503613
EU00503619
EU00503620
EU00503623
EU00503626
EU00503634
EU00503637
EU00503640
EU00503644
EU00503649
EU00503650 EU00503654
EU00503657
EU00503669
EU00503670
EU00503671
EU00503673
EU00503674
EU00503676
EU00503678
EU00503683
EU00503684
EU00503685
EU00503687
Boy's Death a Wake-Up Call for Zimbabwe

Zimbabwe's Centre for Natural Resource Governance (CNRG) and the Peace-Building & Capacity Development Foundation (PACDEF) issued a joint statement calling for the Southern African Development Community to ensure a peaceful environment ahead of the nation's elections, following the death of 12-year-old Christpower Maisiri on February 23. Maisiri, the son of an MDC-T candidate, died when his sleeping quarters were set on fire. ZANU-PF denies involvement in the fire, but the MDC-T named five party members involved in the arson attack. CNRG and PACDEF acknowledge a cycle of violence exits in the country before elections and warned of escalating violence this year once a date is set for the presidential polls.


Mandelkern Dies at 87

Bob Mandelkern died at the age of 87 after a long struggle with Parkinson's disease. Mandelkern, a veteran of the Diamond Manufacturers & Importers Association of America (DMIA), was a leader among the generation of so many current members' fathers who not only led the group, but who also served as role models and mentors. Mandelkern rightfully takes his place among DMIA's esteemed leadership who took an active interest in the group and showed the way. In his later years, Mandelkern was very active in the American Parkinson Disease Association and participated in the successful effort to secure the passage of the bill funding stem cell research in Connecticut. From 2006 to 2011, he served as a member of the CT Stem Cell Research Advisory Committee. He was also the Connecticut state coordinator of the Parkinson’s Action Network. MINING



Petra Loss Narrows to $15M

Petra Diamonds reported revenue rose 63% year on year to $152 million for the first half, and it recorded a net loss of $15.2 million compared with a loss of $26.7 million one year ago. Petra recorded impairment charges of $17.8 million related to the Fissure mines, whose disposal process is underway. Petra restated the trading results for the first half to account for assets held for sale. Production, including from the Fissure mines, rose 31% to 1.247 million carats. The company held diamond inventory worth $45.4 million as of December 31, up from $38.1 million a year earlier. Petra sees a stable rough market.

Namakwa Tender Nets $1M

Namakwa Diamonds' February tender of rough diamonds from its South African subsidiaries achieved $970,000. The company reported that a total of 1,962 carats were sold for an average $496 per carat with the average stone size of 0.50 carat. The company described the tender as satisfactory, with certain articles selling above premiums.

Stornoway Completes Renard 65 Recovery

Stornoway Diamond Corporation completed its diamond recovery program from the Renard 65 bulk sample in north-central Quebec. In total, 962.8 carats of diamonds larger than a +1 DTC size sieve were recovered. Diamond valuation has now been scheduled to take place in Antwerp. Early sampling revealed a 9.78-carat white, octahedral gem from the program, with a preliminary valuation of $7,000 per carat. The next largest diamond was a 6.41-carat white gem, also of high-quality, and a preliminary valuation of $4,700 per carat.

ECONWATCH



Diamond Industry Stock Report

Stocks were largely mixed, however, there were hefty losses with many firms: Birks (-9%), Charles & Colvard (-8%), JCP (-19%), Scio (-18%), C. Mahendra (-10%), Goenka (-12%), Goldiam (-10%), True North (-17%), Namakwa (-15%). Read the extended industry stock report for this past week
Feb. 28 Feb. 21 Chng.
$1 = Euro 0.765 0.758 0.007
$1 = Rupee 54.37 54.48 -0.1
$1 = Israel Shekel 3.71 3.70 0.01
$1 = Rand 9.01 8.90 0.11
$1 = Canadian Dollar 1.03 1.02 0.01

Precious Metals
Gold $1,580.40 $1,576.50 $3.90
Platinum $1,581.00 $1,612.00 -$31.00

Stock Indexes Chng.
BSE 18,861.54 19,325.36 -463.82 -2.4%
Dow Jones 14,054.49 13,880.62 173.87 1.3%
FTSE 6,360.81 6,291.54 69.27 1.1%
Hang Seng 23,020.27 22,906.67 113.60 0.5%
S&P 500 1,514.68 1,502.42 12.26 0.8%
Yahoo! Jewelry 1,170.29 1,163.49 6.80 0.6%
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Rapaport Weekly Market Comment March 8, 2013


Strong Hong Kong show exceeds expectations with much better business than last year. Excellent demand for 0.30-0.40 ct., F-I, VS-SI, goods. 3X bringing 5-8% premiums with some buyers taking VG due to shortages and higher prices for 3X. RapNet Diamond Index (RAPI) for 1 ct. polished diamonds +0.2% in Feb. Rough trading slows as speculative dealers can't sell high-priced purchases. U.S. confidence mixed as Dow Jones hits record high but March spending cuts slow economic growth. U.S. Jan. polished imports +11% to $1.7B, polished exports +29% to $1.5B. Botswana Dec. diamond exports -39% to $140M, FY exports +20% to $4.4B.


RapNet Data: Mar. 7

Diamonds 978,969
Value $6,390,298,394
Carats 1,069,223
Average Discount -27.34%

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RAPAPORT ANNOUNCEMENTS


March
5-13
Tue-Wed


Rapaport Single Stone Auction
New York & Israel

View details.



March
11-19
Mon-Tue


Rapaport Melee Auction
New York

View details.



March
18
Mon


Intl. Diamond Week in Israel

Martin Rapaport will deliver his “State of the Diamond Industry” presentation at 4 p.m. in the Israel Diamond Exchange.



QUOTE OF THE WEEK
There’s an irrational exuberance in the market today. I don’t see the logic in ‎why people are paying so much for rough diamonds.

Name Withheld | De Beers Sightholder
Careers@Rapaport



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


INDUSTRY



De Beers Feb. Sight Estimate $550M

The De Beers February sight closed with an estimated value of $550 million as the ‎company adjusted assortments to reflect higher values in its boxes. ‎Sightholders noted that while De Beers kept its prices basically stable, the readjustments in the boxes effectively translated to a ‎price increase of around 4%. ‎Premiums on De Beers boxes ‎have improved and are selling at around 5% on the secondary market. Prices for ‎very large rough, above 15 carat sizes, have increased by more than 12%.‎ Dealers reported that premiums vary according to the type of goods being traded with ‎cheaper goods garnering up to 8%, while more expensive rough that is suitable for high-‎end polished is trading at lower premiums.‎

RAPI Steady in Feb.

Certified polished diamond prices held steady in ‎February as U.S. markets and improved Far East consumer confidence have helped spur strong ‎demand for mid-quality VS-SI, triple EX diamonds.‎ The RapNet Diamond Index (RAPI™) for 1-carat certified polished diamonds increased ‎‎0.2% in February, RAPI for 0.3-carat diamonds rose 2.7% and ‎‎0.5-carat stones ‎increased 0.7%, while 3-carat diamonds fell 0.2%. Prices have held relatively ‎steady ‎in the first two months of 2013.

The Rapaport Monthly Report – March 2013, “Steady Markets, Rough ‎Anxieties,” is available for purchase at diamonds.net/report and addresses supply and demand concerns and explains why the surge in rough prices appears unsustainable.‎
Hong Kong Show Activity Turns Upbeat

The mood was positive at this week's Hong Kong International Jewellery Show given strong traffic and, at least, better business levels than were experienced in all of 2012. There were a lot of inquiries for ‎goods, but these did not necessarily translate to strong sales as there remains notable ‎discrepancies between seller asking prices and buyer offers.‎ There has been strong demand for GIA-certified 0.30-carat to 0.50-carat, H-I, VS-SI goods; excellent demand for triple EX certified stones and there are shortages in the market; stable demand for round, 1-carat to 3-carat goods; weak activity for better quality VVS+ clarity stones, while commercial-quality fancy shapes are strong.

RETAIL & WHOLESALE



Kothari Discusses India's Outlook

WATCH NOW: Sanjay Kothari, the past chairman of the Gem & Jewellery Export Promotion Council, comments on the recent Signature Show in Mumbai and overall market conditions in India. Traders remain relatively optimistic despite the headwinds of slow local demand for diamonds and jewelry, a volatile rupee to dollar exchange-rate and tight liquidity.

Sotheby's Profit -37%

Sotheby's reported that its fiscal year revenue dropped 8% year on year in 2012 to $768.5 million, and attributed the decline to an 11% drop in auction commission, resulting from a 10% reduction in auction sales. Profit plunged 37% to $108.3 million, or $1.57 per diluted share. Before the fiscal year ended, Sotheby's refinanced its long-term bonds to year 2022, and incurred a $15 million pre-tax bond redemption loss as a result. However, this long-term refinancing will reduce Sotheby's financing costs by approximately $5 million per year, beginning in 2014.

Berkshire's Jewelry Brands Come Under Pressure

Berkshire Hathaway, which owns Ben Bridge Jeweler, Borsheims Fine Jewelry, Helzberg Diamonds and the Richline Group among many other diverse product and services brands, reported net earnings jumped 42% to $15.3 billion in 2012 in large part due to bets placed on derivatives and not strong retail sales. Net earnings attributable to shareholders rose 45% to $14.8 billion. Revenue rose 13% to $162.5 billion. Retailers recorded a revenue increase of 4% year on year to $3.7 billion and pre-tax earnings from this division rose just 2% to $306 million.

Increased revenue from the home furnishings and jewelry businesses as well as the inclusion of Oriental Trading since its acquisition on November 27, were partially offset by lower revenue from Pampered Chef. However, home furnishings retailers were substantially offset by lower earnings from jewelry businesses and Pampered Chef. Company chairman, Warren Buffett, will be selling jewelry to shareholders behind Borsheims' counter in Omaha, Nebraska on May 5, with ''crazy Warren'' pricing in an attempt to ring-up $2 million in sales that afternoon.

Kristall Celebrates 50 Years

Kristall celebrated 50 years since its founding by the Ministry of Finance of the USSR on March 1, 1963. Kristall is the largest polished diamond manufacturing enterprise in Europe specializing in high-quality diamonds, is acknowledged as the Russian Cut brand and prides itself on producing diamonds that conform to the Triple Excellent standards. Kristall is represented by four trading companies, one each in Antwerp, New York, Hong Kong and Dubai. During the past 50 years, Kristall has polished 80.5 million diamonds, for a total weight of 9.3 million carats. The company currently employs 2,200 professionals.


Qatar Boosts Stake in Tiffany to 11%

The Qatar Investment Authority, the largest shareholder in Tiffany & Co., increased its stake in the retailer to 11.27% this week. The sovereign wealth fund first purchased a 5.2% stake in Tiffany nearly 11 months ago, by February it had grown its investment to an 8.7% share. The news provided a boost to Tiffany on the Nasdaq this week as shares rose a solid 6% to more than $70, however, the share price remains just about flat year on year. BlackRock, The Vanguard Group and Capital World Investors follow behind Qatar as the top shareholders. Tiffany reports fourth quarter and fiscal year results on March 22.
GENERAL



GIA Lab Reports Get a Makeover

The Gemological Institute of America (GIA) revised the format for its global-standard gem grading and identification reports to consume less paper and other materials, weigh less and offer enhanced security features, including a unique and durable proprietary paper, that exceed document security industry guidelines. QR codes printed on each report will verify the document’s authenticity through direct access to GIA’s online Report Check service. There is also a new, streamlined process for consumers and occasional laboratory clients to submit gems for grading and identification services. GIA used the opportunity to redesign its website, too.

Additionally, the Ethisphere Institute named GIA as one of the World’s Most Ethical Companies in 2013 for efforts on building and maintaining a superior ethics and compliance program. Companies on the list have demonstrated an active role in promoting ethical business practices internally and exceeded legal compliance standards. GIA joined 144 firms named to the list this year.

Firm Denies Smuggling Zim Stones

China Sonangal, which 100Reporters.com alleged was part of a diamond-smuggling operation in Zimbabwe, denied the charge and added that it had not purchased any diamonds from the country. The head of legal services for China Sonangal, Wee Jee Kin, told the Zimbabwe Independent that, while true, the firm is involved in the diamond business, among others, its diamonds only come from ''our jointly-held Catoca mines in Angola and none are from Zimbabwe.''

In an unrelated story, the Independent also quoted Zimbabwe's Mines Minister, Obert Mpofu, discussing plans to seal off newly discovered diamond fields in Masvingo province's Bikita district to halt illegal mining and to avoid a repeat of the Marange diamond fields free-for-all in 2006. Mpofu insisted the lockdown of the area would be achieved peacefully and in an organized manner to plug mineral leaks and allow the nation to benefit from its resource wealth.

Forbes Ranks Top Billionaires

The annual Forbes list of billionaires boasted 1,426 names this year with an aggregate net worth up 17% year on year to $5.4 trillion. The U.S. led the roll call with 442 billionaires, followed by the Asia-Pacific region with 386, Europe with 366, the Americas with 129 and the Middle East and Africa at 103. Here are some of the major players who touch the diamond industry in one form or another.

Direct industry players included Nicky Oppenheimer and family at No. 182, down from No. 136 in 2012, and their net worth dropped $300 million to $6.5 billion; Laurence Graff, however, increased his standing on the list, rising 160 spots to No. 299 with a net worth of $4.3 billion from only $2.6 billion one year ago; Beny Steinmetz dropped to No. 316 from No. 162, and his net worth fell to $4.1 billion from $5.9 billion; Lev Leviev fell to No. 974 from No. 764 in 2012 and his net worth fell by $200 million to $1.5 billion and diamond dealer Nirav Modi joined at No. 1,342 with a net worth of $1 billion, according to Forbes.

Luxury retailers maintained prominent places on the list with Warren Buffett at No. 4 and a net worth of $53.5 billion, Bernard Arnault of LVMH at No. 10 with a net worth of $29 billion; Amazon's founder, Jeff Bezos at No. 19 with a net worth of $25.2 billion; PPR's chairman Francois Pinault and his family were at No. 53 with a net worth of $15 billion; Patrizio Bertelli was No. 175 with a net worth $6.7 billion and Johann Rupert and family at No. 179 with a net worth of $6.6 billion.

DMIA Elects VanderLinden as President

The Diamond Manufacturers & Importers Association of America (DMIA) installed a new board and appointed new directors during the DMIA's general membership meeting on March 5. Ronald (Ronnie) VanderLinden was elected president, stepping in to fill the shoes of Ronald (Ronny) Friedman who served as DMIA president for the past nine years.

Executive Board:
President Ronald VanderLinden
Vice President Sheldon Kwiat
Vice President Fred Knobloch
Vice President Hertz Hasenfeld
Vice President Saul Goldberg
Vice President Eli Haas
Secretary Stuart Samuels
Treasurer Parag Shah

The board of directors include Steve Eisen, Marvin Finker, Ishaia Gol, Suzette Gomes, Manny Gordon, Jay Greenberg, Stan Grosssbard, Tom Heyman, Daniel Kaleko, Moishe Klein, Daniel Klugman, Melissa Kulhanhian, Alan Rehs, Charles Rosario, Matthew Schamroth and Michael Verstandig.
MINING



Gemfields Profit Falls

Integrated mining firm Gemfields plc reported that its revenue fell 39% year on year to $27.7 million during the six months that ended on December 31. Profit slid 78% to $4.7 million. Gemfields' rough emerald tender that took place in November in Singapore achieved $26.8 million and was 84% sold by lot. The company reported that a total of 930,000 carats sold for an average of $29.71 per carat. The company noted that it produced 14.5 million carats of emerald and beryl, mainly of higher-grades from its Kagem mine in Zambia during the period.

Gemfields also completed its acquisition of Faberge and acquired a 75% stake in a second substantial ruby deposit in the Montepeux district of the Cabo Deglado province of Mozambique.

Guinea Renews Stellar's Licenses

Stellar Diamonds' two diamond exploration licenses in Guinea were renewed for two years. The licenses are held by its subsidiary, Friendship Diamonds SA, and are located adjacent to company’s Droujba project, covering approximately 118-square-kilometers. Stellar's Droujba property hosts a JORC-inferred 3 million carat diamond resource, according to the company's project report.
STATS



U.S.A

Jan. $Mil. %Chng.
Polished imports $1,676 11%
Polished exports $1,513 29%
Net imports $164 -52%

Rough imports $39 3%
Rough exports $25 -50%
Net imports $13

Net diamond account $177 -46%

Botswana

Dec. $Mil. %Chng. 2012 $Mil. %Chng.
Rough and polished exports $140 -39% $4,430 20%
Rough and polished imports $155 223% $2,024 181%
Net exports ($15) $2,406 -16%
ECONWATCH



Diamond Industry Stock Report

U.S. stocks were mixed with JCP (-16%) slammed for a second week, but Birks (+9%), Blue Nile (+5%) and Tiffany (+6%) performed well. European shares and most Indian firms were higher, C.Mahendra (+15%), Goenka (+7%), Suashish (+11%) stood out winners. Mining shares lower with Stornoway (-14%) and Firestone (-9%) in the steepest slump. Read the extended industry stock report for this past week.
Mar. 7 Feb. 28 Chng.
$1 = Euro 0.763 0.765 -0.002
$1 = Rupee 54.57 54.37 0.2
$1 = Israel Shekel 3.71 3.71 0.00
$1 = Rand 9.15 9.01 0.14
$1 = Canadian Dollar 1.03 1.03 0.00

Precious Metals
Gold $1,577.90 $1,580.40 -$2.50
Platinum $1,590.00 $1,581.00 $9.00

Stock Indexes Chng.
BSE 19,413.54 18,861.54 552.00 2.9%
Dow Jones 14,329.57 14,054.49 275.08 2.0%
FTSE 6,439.16 6,360.81 78.35 1.2%
Hang Seng 22,771.44 23,020.27 -248.83 -1.1%
S&P 500 1,544.26 1,514.68 29.58 2.0%
Yahoo! Jewelry 1,160.80 1,170.29 -9.49 -0.8%
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Rapaport Weekly Market Comment March 15, 2013


Hong Kong show boosts market confidence. 0.30-0.40ct., G-K, VS2-SI2 certs are hot with good demand through 1ct. Oversizes bringing premiums. CAUTION: speculative rough prices unsustainable. U.S. retail improves with Jan. jewelry store sales +15% to $1.9B. Chow Tai Fook Jan.-Feb. same-store sales -2% with China -7% and Hong Kong / Macau +5%. Gem Diamonds 2012 revenue -34% to $202M, loss of $77M vs. profit of $35M. Belgium’s Feb. polished exports -9% to $1.3B, rough imports +8% to $1.2B. Christie’s expects pear-shape, 101.73ct., D, IF diamond to fetch estimated $20M ($197K/ct.) at May Geneva auction.


RapNet Data: Mar. 14

Diamonds 957,506
Value $6,356,488,863
Carats 1,051,947
Average Discount -27.27%

www.rapnet.com
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RAPAPORT ANNOUNCEMENTS


March
11-19
Mon-Tue


Rapaport Melee Auction
New York

View details.



April
9-17
Tue-Wed


Rapaport Melee Auction
New York & Dubai

View details.
March
18
Mon
Intl. Diamond Week in Israel

Martin Rapaport will deliver his “State of the Diamond Industry” presentation at 4 p.m. in the Israel Diamond Exchange.
QUOTE OF THE WEEK
We are thrilled that Laurence Graff will be coming to Israel to join us for the inaugural International Diamond Week. I am grateful to his partners in the SAFDICO company, Johnny Kneller and Brian Gutkin for conveying our invitation. Mr. Graff will arrive in Israel especially to join us in this exciting inaugural event.

Yair Sahar | Israel Diamond Exchange


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



U.S. Jewelry Store Sales +15%

U.S. jewelry store sales rose 14.7% year on year to $1.954 billion during the month of January 2013, marking the highest total for the first month of the year as tracked by the U.S. Department of Commerce. In addition, consumer price inflation (CPI) for jewelry in January fell 3.5%. In broader retail news, advanced monthly sales for February revealed that department store sales fell 7.8% year on year to $12.44 billion. U.S. retail sales in total for February rose 3.6% to $339.3 billion. Retail trade sales increased 4.7% and nonstore retailers experienced a 15.7% surge in sales.
MJSA Panel: Teach Industry Reality

WATCH NOW: The MJSA Expo in Manhattan featured the latest tools, technology and services available to the jewelry making trade. In addition, attendees interacted with thought leaders on a number of issues, including a topic that addressed the next generation of jewelry making and design coming onto the scene. Panelists Patricia Madeja of the Pratt Institute, Arthur Skuratowicz of the Jewelry Training Center and J. Tyler Teague of Precious Metal Casting Consultants (PMCC) provided insights from the front lines of training and development of new designers who are pursuing careers in the industry. While there are perception, or reality, challenges --from within the industry as well as from students-- the key takeaways were to promote stronger communication, guidance and openness about the rules of survival in the global, evolving business of jewelry manufacturing and design.

RETAIL & WHOLESALE



Chow Tai Fook Reports Weaker Comps

Chow Tai Fook reported that same-store sales fell 2% year on year during January and February due to continued weakness in China’s ‎retail market. By volume, same-store sales declined 3 percent.‎ Consumer sentiment in Mainland China was weak, ‎except during the Chinese New Year holidays. Same-store sales in Mainland China fell 7%, however, same-store sales in Hong Kong and Macau grew 5%. Chow Tai Fook expects its expansion program to open new points of sale to ‎take longer than planned due to the sluggish market.

PPR Eyes Pomellato

PPR is reportedly close to an agreement to buy a majority stake in Pomellato SpA, a midsize Italian jeweler. The deal could be about $450 million, according to unnamed insiders. Still, negotiations could fall apart. Damiani owns a minority stake in Pomellato and it is likely to remain a shareholder. Damiani also made an offer to buy a majority stake, but the deal was not accepted according to the insider.

Costco Says 'Tiffany Setting' is Generic

Tiffany & Co. sued Costco Wholesale Corporation on February 14 alleging trademark infringement, counterfeiting and unfair competition, among other things, and sought $2 million per infringement for rings it found to be advertised for sale using its trademark. But Costco fired back, asking the court to dismiss the case and filed its own counterclaim, arguing that the diamond rings it sells are commonly defined as ''Tiffany settings,'' a generic term, which is not an infringement of trademark, it argued. Costco asked the court to prevent Tiffany & Co. from using its trademark against retailers who use that generic term in the future.
Ben Bridge to Open in El Paso

Ben Bridge Jeweler will open a new flagship store in El Paso, Texas on March 23 at the former Lacy & Co. boutique, marking the chain-store's eighth location in Texas. Nearly all of the sales associates from Lacy & Co. will join Ben Bridge under the direction of store manager Briana Gartin, an eight-year veteran of Ben Bridge. Lacy & Co.'s former owners, Ellen and Charles Lacy, will remain active in the new store as advisors and community ambassadors, according to Ben Bridge. The jeweler plans to host a grand opening and community celebration on April 18.
Georg Jensen Names Chu as CEO

Georg Jensen named David Chu as its new CEO. Chu has served as co-chair of the company's board of directors as well as its chief creative officer. He will become a member of the board and continue as chief creative officer, overseeing the design direction and strategy for all products. Chu founded Nautica, the global lifestyle and clothing brand, in 1983. Beginning with six outerwear jackets, he expanded the brand to encompass all lifestyle categories including apparel, accessories, home and fragrance. In 2003 Nautica was sold to VF Corporation. From 2006 to 2009, Chu was chief creative officer of Tumi, the global luggage, travel and accessory brand.

Kirk Kara Wins Best Bridal Design

Kirk Kara has won first place in the JCK Jewelers' Choice Awards for the category of Best Bridal Design for a sixth consecutive year. Kirk Kara won for the category in the price point range of $5,001 to $10,000 for a hand-engraved rose and white gold three-ring engagement set from the Pirouette collection. The two-toned engagement ring features 36 pavé-set brilliant round diamonds equaling 0.25 carats, all of which accent a ribbon-like halo design. Each of the flush-fit matching wedding bands is highlighted with pavé-set brilliant round diamonds equaling 0.17 carats.
New Ideal Cushion Collection for Forevermark

Crossworks Manufacturing Ltd. and A. Link partnered to create a new Hearts & Arrows Ideal Cushion collection that will be available exclusively to Forevermark authorized retailers in the U.S. This new cut was developed to meet growing demand for the shape and to create brand differentiation for Forevermark jewelers through this exclusive deal with A. Link. Both companies will premiere Crossworks' Hearts & Arrow Ideal Cushion diamonds and A. Link’s Hearts & Arrow Ideal Cushion collection at the Forevermark forum taking place in Orlando, Florida from March 18 to 20
GENERAL



FinCEN Mandates E-Filing by Apr. 1

The Financial Crimes Enforcement Network (FinCEN) reminded the trade to adopt the new electronic reporting format by April 1 for filing Suspicious Activity Reports (SARs), Currency Transaction Reports (CTRs), Registration of Money Services Business (RMSBs) and Designation of Exempt Person Reports (DOEPs) as required under the Bank Secrecy Act. Any paper filing will be out of compliance from March 31 forward and failure to meet these filing standards is subject to civil money penalties. Electronic reports are available through the BSA E-Filing System, where FinCEN's new SAR, CTR, RMSB and DOEP reports are available. The BSA E-Filing System will accept submissions of the legacy versions of the SAR, CTR, DOEP and RMSB only until March 31.
Gulaylar to Build Exchange at Gem Tower

The Gulaylar Group from Turkey purchased a three-level space, including more than 12,000 square feet that features approximately 80 linear feet of highly-visible retail frontage at the International Gem Tower in Manhattan. Building developer Extell stated the buyer plans to create a jewelry exchange in the new space.

Extell contended that property closings at the Gem Tower continue at a steady pace and tenants may begin moving in about mid-year.

Nielsen Shops Its Expo Unit

Nielsen Holdings is said to be shopping around its expo unit, which includes JA New York, Couture and many other non-jewelry industry trade shows. The division accounted for about 3% of Nielsen's total revenue, or $183 million, and hopes to draw the attention of private equity investors, according to insiders.

Crime Incidents Rise But Dollar Losses Drops

The Jewelers’ Security Alliance (JSA) concluded in its annual U.S. crime report for 2012 that the number of incidents increased from 1,478 in 2011 to 1,538, however, the total dollar losses decreased sharply from $85.1 million in 2011 to $60.2 million. Officials made 461 arrests during 2012, which was down from 657 arrests in 2011, according to JSA's data. The group recorded two homicides during the year, down from seven in 2011.

In the great majority of off-premises losses reported to the JSA, male and female Hispanic suspects were indicated. Based upon law enforcement reports, too, the majority of those arrested were found to be from Colombia and residing in the U.S. illegally. Local and federal law enforcement agencies have confirmed the existence of organized criminal groups identified as South American Theft/Robbery Gangs (SATG), which concentrate their criminal activities against the jewelry industry. The JSA has received reliable information indicting that some SATG are now operating in Canada or are now involved in criminal activities related to organized retail theft and other non-jewelry related crime. MINING



Gemfields Profit Falls

Gem Diamonds' revenue fell 34% year on year to $202.1 million in 2012 ‎despite achieving record production at its flagship Letšeng mine. The average price for rough ‎diamonds sold from Letšeng fell approximately 15%. The group posted a loss of $76.5 million for the year compared with a profit of $34.8 ‎million the previous year. In 2012, the company sold 107,617 carats of diamonds from Letšeng for an average ‎‎$1,932 per carat, down from $2,776 per carat the previous year. Production at the mine ‎rose 2% to 114,350 carats.

Diamcor Completes Krone-Endora Upgrade

Diamcor Mining Inc. completed upgrades for procurement, delivery, construction and installation of a vast majority of its equipment and infrastructure to expand the quarrying and infield screening operations at the Krone-Endora at Venetia project in South Africa. These preparations were made in anticipation of a planned move to operating 24-hours, seven-days a week and were financed through $4 million in funding from its strategic partner Tiffany & Co. Project enhancements included the development of the semi-mobile infield screening plant, which Diamcor said would significantly enhance processing capacities and operating efficiencies for the long term.

Zim Seeks Election Funding From Miners

Zimbabwe's finance minister Tendai Biti asked President Robert Mugabe to order diamond-mining companies to pay millions of dollars into the nation's treasury in order to fund the nation's constitutional referendum and upcoming elections in July. Biti said at least $217 million is required for the measures, and alleged the Treasury's share of diamond sales last year was $800 million, but miners had only paid $45 million.

Meanwhile, Zimbabwe's Mine’s Minister, Obert Mpofu, said a review of the country’s exports would likely result in higher levies for unprocessed, raw minerals, while lower levies would be placed on refined minerals and diamonds that are processed inside the country in an attempt to encourage value addition to the nation's resources.
De Beers Turns 125

De Beers and its subsidiaries, including Forevermark, celebrated the company's 125th anniversary this week. The occasion provided De Beers with a moment to reflect on all that has been built by those who came before the current leadership. Company CEO, Philippe Mellier, said while De Beers expanded beyond borders and into new markets, it has always kept the diamond dream at its core. The understanding that a diamond is precious and serves both as a symbol of love and a driver of economic development in the countries where the company operates, drives it forward, Mellier said.
ECONWATCH
Diamond Industry Stock Report

U.S. retail stocks were mixed with Birks (-8%), Movado (-1%), Tiffany (-3%) on the downside, and Signet (+4%) and Zale (+9%) upside. European stocks higher. Indian shares under pressure Classic Diamond (-8%) C. Mahendra (-7%) and Titan (-10%) all lower. View the extended stock report.
Mar. 14 Mar. 7 Chng.
$1 = Euro 0.769 0.765 0.004
$1 = Rupee 54.21 54.37 -0.2
$1 = Israel Shekel 3.69 3.71 -0.02
$1 = Rand 9.18 9.01 0.17
$1 = Canadian Dollar 1.02 1.03 -0.01

Precious Metals
Gold $1,577.90 $1,580.40 -$2.50
Platinum $1,590.00 $1,581.00 $9.00

Stock Indexes Chng.
BSE 19,570.44 18,861.54 708.90 3.8%
Dow Jones 14,531.08 14,054.49 476.59 3.4%
FTSE 6,529.41 6,360.81 168.60 2.7%
Hang Seng 22,619.18 23,020.27 -401.09 -1.7%
S&P 500 1,562.75 1,514.68 48.07 3.2%
Yahoo! Jewelry 1,155.22 1,170.29 -15.07 -1.3%
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Rapaport Weekly Market Comment March 22, 2013


U.S.-Israel trade week generates busy activity. Polished markets steady with strong demand for SI goods. China settling down following New Year seasonal increase in demand. De Beers announces five new sightholders including four Indian companies: H. Dipak, Asian Star, HVK Intl., and KP Sanghvi - and one Hong Kong company. Total sightholders now 82 as 2013-14 ITO supply forecast 20% lower than previous year. Kristall signs new two year rough supply deal with ALROSA. India’s Feb. polished exports +28% to $1.8B, rough imports -3% to $1.3B, net diamond account $224M vs. deficit of $333M a year earlier. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED NEXT WEEK DUE TO ‎PASSOVER HOLIDAY.


RapNet Data: Mar. 21

Diamonds 960,363
Value $6,245,822,138
Carats 1,052,982
Average Discount -27.35%

www.rapnet.com

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RAPAPORT ANNOUNCEMENTS
April
9-17
Tue-Wed


Rapaport Melee Auction
New York & Dubai

View details.
April
15-24
Mon-Wed


Rapaport Single Stone Auction
New York & Israel

View details.
QUOTE OF THE WEEK
The next logistical step in Dubai's growth as a diamond hub is to become a center for jewelry manufacturing. Local companies that have benefited from Dubai's position between producers and consumers are now gearing up to manufacture their own high-quality contemporary jewelry, pushing Dubai into a new phase of growth.

Rihen Mehta | Rosy Blue
Careers@Rapaport

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

INDUSTRY

De Beers Adds Five Sightholders

De Beers Group added five new sightholders to its list of participants for the remainder of the 2012 to 2015 supplier of choice (SOC) contract period. De Beers’ modified SOC re-planning process enables businesses that demonstrated sufficient demand through De Beers’ auction sales in 2012 to qualify for term contract supply and sightholder status.

Rapaport News confirmed that four Indian companies, including H. Dipak, Asian Star Company Limited, HVK International Pvt. Ltd., and KP Sanghvi, and one Hong Kong-based company that has not been confirmed, were among the new sightholders. De Beers stated it would update its sightholder directory when all 82 sightholders begin the 2013 to 2014 ITO period on March 31.

De Beers sold 98% by value of the goods offered during its first two online auction ‎sales in 2013, noting a substantial improvement in the rough market. The company ‎declined to disclose the percentage of lots that were sold, however.‎ Many product categories attracted buyer interest not seen in a year or ‎more, according to Neil Ventura, the senior vice president of De Beers auction sales. Improved demand was observed from all regions, ‎customer segment and product categories. He noted that demand from Indian-based ‎businesses rose sharply during the second series of auction sales that were recently ‎concluded, while demand from buyers in Asia Pacific, Belgium and Israel also increased. Participation from Israel-based buyers reached the highest seen in two years, he added. ‎
Israel's Dealers Comment on Diamond Week Trading

WATCH NOW: Israel's U.S. and International Diamond Week at the Israel Diamond Exchange (IDE) hosted more than 200 foreign buyers and dealers and buyers alike offered mixed feedback, noting that it was a valuable platform for strengthening inter-bourse business and relationships, whereas outside buyers were more reserved and unwilling to pay premium prices. Nonetheless, sales appeared to be healthy for fancy cuts and larger diamonds, sizes greater than 10 carats, and for pink and blue stones under 3 carats.

Mpofu Reiterates Call to Lift Sanctions

In a speech to the Dubai Diamond Conference this week, Zimbabwe’s Minister of Mines and Mining Development, Obert Mpofu, asserted that his country will strive for a Kimberley Process that gives equal access to global diamond markets to every participant, and he repeated calls for the removal of sanctions on Zimbabwe’s diamond industry. The sanctions, he added, were in direct violation of the World Trade Organization provisions to promote fair and unrestricted trade amongst nations.

Commending South Africa and the UAE for their support on that trading goal, Mpofu highlighted the country’s new Zimbabwe Diamond Policy, which he claimed would guarantee security and accountability in the nation’s diamond industry. Concluding his speech, he stressed the importance of Zimbabwe’s diamond industry in transforming the country’s economy and catapulting it out of a recession.

In an interview with The Herald, Kurt Looyens, the senior vice president and global head of business development at ABN Amro, said the diamond trade was a very sensitive business, adding that as long as the EU restrictions remained in force, ABN Amro would not consider venturing into Zimbabwe.


RETAIL & WHOLESALE



U.S. Jewelry CPI -3%

The U.S. consumer price index (CPI) for jewelry eased again in February, falling 2.8% year on year to 175.9 points in response to weaker prices for precious metals. The index was even a touch lower than January's reading of 176.7 points. Nonetheless, the CPI maintained a historically strong trend and February marked 26 consecutive months of a reading of more than 170 points. The CPI reached a record 183 points one year ago, but then prices for polished diamonds, gold and platinum remained under pressure throughout 2012. Diamond prices, in particular, have since stabilized, according to Rapaport Research.

Movado Group's 4Q Profit Falls

Movado Group reported that sales rose almost 1% year on year to $123.6 million for the fourth quarter that ended on January 31. The retailer's cost of sales jumped 7.4% to $60.9 million and gross profit was 50.7% of sales, compared with 53.7% one year ago. Net income attributed to the Movado Group plunged 26% to $7.9 million or 31 cents per share. The company's fiscal year revenue, however, increased 7.9% year on year to $505.5 million, while cost of sales rose 7.6% to $227.6 million. Gross profit for the year rose slightly to 55% of sales compared with 54.8% the previous year. Net income for the year surged 78% to $57.1 million or $2.22 per share. Movado anticipates that sales will increase approximately 12% year on year into a range of $570 million to $575 million this fiscal year, while gross margin will be approximately 54% and net income will increase to approximately $48 million or $1.80 per diluted share.

ICRA Upgrades Supergems

Ratings agency ICRA upgraded the short term outlook for working capital of Supergems Jewellery Manufacturing Pvt. Ltd. from [ICRA]A4 to [ICRA]A4+. The higher rating took into account significant revenue growth posted by Supergems along with improved margins, an increased volume of sales and an improvement in debt coverage indicators. ICRA noted Supergem's experienced management and strong operational and financial support, but the rating remains under pressure by the modest scale of operations in the intensely competitive and fragmented jewelry industry.
Kristall Secures Supply From ALROSA

Kristall Production Corporation and ALROSA signed a two-year agreement for rough diamond supplies on March 18 in Moscow that maintained the existing volume of monthly purchases. ALROSA agreed to provide a rough diamond assortment that corresponded to Kristall's market niche and is most efficient for manufacturing, according to Maxim Shkadov, the general director of Kristall. Kristall has been cooperating with ALROSA on its rough supplies since 1992.

UBM Plans 'I Love Jewellery' Show

UBM India's jewelry portfolio of shows added a business-to-consumer (B2C) event ''I Love Jewellery'' to be scheduled in October, a week before Diwali, and cater to jewelers of Chennai and surrounding cities. With the timing before the festive season, the B2C event will focus on high-end jewelry, watches and other products. UBM anticipates the show will attract more than 200 exhibitors and between 20,000 and 30,000 visitors.

Helzberg App Wins Appy

Helzberg Diamonds took home two awards for its new smartphone application at the 2013 Appy Awards, an official event during the South by Southwest Conference (SXSW) in Austin, Texas. Helzberg's Proposal Pro™: A Complete Guide to Popping the Question, won two nods for best app in both the lifestyle and utilities categories of the Appys and was also a finalist in the marketing/branding/advertising category. Helzberg Diamonds released the app in December.

Tiffany's Setting is Trademarked

Attorneys for Tiffany & Co. charged Costco Wholesale Corporation with citing unreliable sources to defend the sale of rings with a ''Tiffany setting'' in its club stores, when the “Tiffany&reg; Setting” is a federally registered, incontestable trademark that has been continuously used for over 175 years and enjoys worldwide fame and recognition.

Tiffany & Co.'s attorneys told the court, in response to Costco's claim that the Tiffany Setting is generic, that the setting has been continuously manufactured by Tiffany & Co., in accordance with strict proprietary standards and specifications, for well over one century and those proprietary specifications set standards for the quality and visual appearance of the ring itself, including the shank, head and prongs, the quality of the diamond, and the manner in which the diamond must be set.

Tiffany seeks damages of $2 million per violation along with other fees and fines for counterfeiting from Costco and demanded a trial by jury.

GENERAL



Nirav Shah Passes Away

Rapaport Belgium and the entire Antwerp diamond community are saddened by the untimely passing of Nirav Shah. Shah was an invaluable member of Kediam bvba, a manufacturing and trading company of rough and polished diamonds. Shah was 32 years old upon his death and is survived by his wife, Shweta Shah and a young daughter.

Bernard Ward Passes Away

The Birmingham Assay Office is mourning the loss of its former Assay Master, Bernard Ward, who passed away at the age of 78 on March 15 after a long illness. Ward is survived by his wife, Margaret, and his children, Val and Michael. During his 15 years at the helm of the Birmingham Assay Office, Ward reinvigorated the business and strove for exemplary customer service and boosted Birmingham as the largest assay office in the U.K. in just three years’ time. Ward received the Order of the British Empire in 1999.


DICAN Continues as Royalty Valuator

Ontario's Ministry of Northern Development and Mines (MNDM) in Canada renewed a contract with Diamonds International Canada (DICAN) Limited to continue as the diamond royalty valuator for the next three years. The new contract is similar to one signed in 2008, and was awarded to DICAN following an international bidding process. DICAN is responsible for ascertaining the gross value of diamonds produced by the De Beers Victor mine near Attawapiskat on James Bay and it also conducts a range of other diamond-auditing and consulting services on behalf of MNDM for royalty assessment purposes.

CIBJO Accredits Fiera di Vicenza

Fiera di Vicenza was accredited through CIBJO, the World Jewellery Confederation, to plan and implement a United Nations (UN) endorsed corporate social responsibility program for the jewelry industry. The program aligns with the UN's mission of realizing its Millennium Development Goals, which is also a key element in CIBJO's formal relationship with the UN Economic and Social Council (ECOSOC). CIBJO became the first and only industry organization to receive official consultative status with ECOSOC in 2006

MINING

Harry Winston Updates Resource, Sale to Swatch

Harry Winston Diamond Corporation stated that significant new data from the processing of samples from its 2011 deep drilling program at the Diavik diamond mine's A-154 north and A-418 kimberlite pipes was incorporated into the latest reserve and resource models for calendar 2012. Proven reserves for Diavik's A-154 south, A-154 north, A-418 and stockpile amounted to 33.8 million carats, while ''probable reserves'' totaled another 19.6 million carats.

The updated A-154 north model added an additional new reserve of about 500,000 tonnes of ore, while 1.3 million tonnes of probable reserve was promoted to proven status and 400,000 tonnes of new resources was defined at depth. The updated A-418 model has promoted 5 million tonnes from probable to proven reserve status. The A-154 south and A-21 kimberlite pipes were not part of the 2011 drill program and consequently there were no significant changes to their reserve and resource models, while the A-21 pipe remains just a resource for now.

The company received its required regulatory approvals to sell its luxury brand diamond jewelry and timepiece division, Harry Winston Inc., to the Swatch Group for $1 billion. The transaction is expected to close on or about March 26 at which time the mining company will change its name to Dominion Diamond Corporation.

In other news, the U.S. Patent & Trademark Office (USPTO) granted Harry Winston Inc. its request for the trademark ''Harry Winston Hope Collection'' on March 12 with the registration number of 4302682. The trademark was originally filed on March 7, 2012 and it applies to jewelry and watches.

Trans Hex Tenders Net $69M

Trans Hex achieved rough sales of $69 million (ZAR 635.9 million) for 56,587 carats for the period of October through January. The company closes its fiscal year on March 31 and will report more detailed results in June. The Somiluana diamond mine in Angola, in which Trans Hex holds a 33 percent stake, contributed $2.64 million to the total from the sale of 6,872 carats. Somiluana's production so far this fiscal year has reached 38,869 carats, while South African production amounted to 61,204 carats and Trans Hex expects to hold rough tenders for those goods in March.

Stellar Diamonds Narrows Loss to $2M

Stellar Diamonds reported a loss of $1.55 million for the six months that ended on December 31, just slightly less than the loss of $1.95 million one year earlier. The junior explorer reported no revenue for the period. The company confirmed a JORC compliant resource of 1 million carats at its Tongo project and 3 million carats at its Droujba project during the first half. Stellar Diamonds expects to begin its conceptual economic scoping studies for Tongo and Droujba this quarter and the company continues to work towards reinstatement of its Kono licenses in Sierra Leone.


Lucara Recovers 239-Ct. Diamond

Lucara Diamond recovered a 239.2-carat diamond from its Karowe mine in ‎Botswana along with two more exceptional stones, including a 124 carat and a 71.1 carat diamond. The diamonds were recovered from the central kimberlite domain, ‎which only recently became ore feed to the plant. The diamonds will be sent to Antwerp ‎to be studied prior to being sold later this year.‎

Rockwell Acquires Jasper

Rockwell Diamonds Inc. acquired the Jasper mine by settling the purchase consideration through an issuance of shares. The agreement to acquire Jasper, which is contiguous to Rockwell's Saxendrift mine, also formed part of the transaction to unwind its black economic empowerment partnership with Africa Vanguard Resources. Rockwell paid approximately $221,000 to Jasper shareholders in a total of 533,332 shares at 41 cents each, which represented the five day volume weighted moving average price at the time of the agreement one year ago this month. Jasper's shareholders have agreed not to trade these shares for a period of one year. Rockwell stated it was negotiating a partnership with a new black economic empowerment partner.

Afri-Can Acquires Stake in Marine Concession

Afri-Can Marine Minerals Corporation acquired 20% of the common shares of Thyme Investments Ltd., the sole owner of the exclusive prospecting license 3403, a marine diamond concession in Namibia, in exchange for common shares. Afri-Can Marine issued 2,437,500 shares to International Mining and Dredging Holding (IMDH) Ltd. and 812,500 shares to BV Investments Four Hundred and Nine (BVI) Ltd., the owners of Thyme Investment. IMDH and BVI will retain an 80% stake in Thyme until Afri-Can exercises its option to acquire the remaining shares, which it intends to do after concluding a diamond extraction sample program.

Additionally, Diamond Fields International signed a joint venture option agreement with Afri-Can to further develop its own marine diamond leases in Namibia. Under the agreement, Afri-Can and its local partner have the option to acquire a 90% interest in Diamond Fields' offshore diamond mining leases numbered 111, 138, 139 and 32 in exchange for spending $3.3 million within two years on a program designed to place the properties back into commercial production.

STATS

India

Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,841 28% $3,530 8%
Polished imports $475 -11% $1,072 -29%
Net exports $1,366 50% $2,457 40%

Rough imports $1,313 -3% $2,300 -6%
Rough exports $171 59% $344 32%
Net imports $1,143 -8% $1,956 -11%

Net diamond account $224 $502 ECONWATCH



Diamond Industry Stock Report

Industry stocks experienced a down trend this week with Movado (-11%) showing the biggest drop in U.S. stocks, Richemont (-9%) and Theo Fennell (-9%) led losses in Europe and Goenka (-9%) led Indian shares lower. Mining shares were mixed with Lucara (+13%) and Namakwa (+20%) pulling ahead, while Stellar (-11%) led declines. View the extended stock report
Mar. 21 Mar. 14 Chng.
$1 = Euro 0.775 0.769 0.006
$1 = Rupee 54.29 54.35 -0.1
$1 = Israel Shekel 3.67 3.69 -0.02
$1 = Rand 9.31 9.17 0.14
$1 = Canadian Dollar 1.02 1.02 0.00

Precious Metals
Gold $1,615.00 $1,590.20 $24.80
Platinum $1,578.00 $1,576.00 $2.00

Stock Indexes Chng.
BSE 18,792.87 19,570.44 -777.57 -4.0%
Dow Jones 14,421.49 14,539.14 -117.65 -0.8%
FTSE 6,388.55 6,529.41 -140.86 -2.2%
Hang Seng 22,225.88 22,619.18 -393.30 -1.7%
S&P 500 1,545.80 1,563.23 -17.43 -1.1%
Yahoo! Jewelry 1,148.71 1,155.21 -6.50 -0.6%
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Lucara Recovers 239-Ct. Diamond

Lucara Diamond recovered a 239.2-carat diamond from its Karowe mine in ‎Botswana along with two more exceptional stones, including a 124 carat and a 71.1 carat diamond. The diamonds were recovered from the central kimberlite domain, ‎which only recently became ore feed to the plant. The diamonds will be sent to Antwerp ‎to be studied prior to being sold later this year.‎

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Rapaport Weekly Market Comment March 29, 2013
Markets quiet due to holidays. Harry Winston completes $1B retail division sale to Swatch, changes name to Dominion Diamond Corp. ALROSA 2012 production flat at 34M cts., increases reserves by 36M cts. to approx. 683M cts. Signet 4Q sales +12% to $1.5B, same-store +4%, profit +10% to $172M. Tiffany 4Q sales +4% to $1.2B, same-store flat, profit +1% to $180M. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED MAR. 29 DUE TO ‎PASSOVER HOLIDAY.


RapNet Data: Mar. 28

Diamonds 945,181
Value $6,160,297,989
Carats 1,038,994
Average Discount -27.32%

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QUOTE OF THE WEEK
While we believe rough diamond prices are likely to see a steady upward trend from this year onwards, and the signs in first quarter have been very encouraging, diamond prices remain volatile and can be rapidly influenced by any negative shift in perceptions as to the economic outlook; particularly in the U.S., which makes up more than 40% of the market. Rough prices are also heavily exposed to any tightening of credit, which impacts the ability of cutters and polishers to fund inventory.

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INDUSTRY

Harry Winston Completes Sale to Swatch

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, completed the sale of its luxury division, Harry Winston Inc., to the Swatch Group. As part of the $1 billion agreement, the mining company changed its name to Dominion Diamond. In connection with the name change, the company's stock symbol will change from HW to DDC on the Toronto Stock Exchange and from HWD to DDC on the New York Stock Exchange. Dominion Diamond remains focused on mining and marketing rough diamonds with a 40% stake of the Diavik diamond mine in Canada's Northwest Territories and rough diamond sorting and sales operations in Canada, Belgium and India. Dominion Diamond is awaiting regulatory clearance on the purchase of an 80% stake in the Ekati diamond mine, located in the Northwest Territories, as well as a controlling interest in surrounding areas containing significant prospective resources from BHP Billiton.
ALROSA Increases Reserves, Production Flat

ALROSA’s production was basically flat at 34.2 million carats in 2012, however, its reserves grew approximately 35.8 million carats due to the exploration of Ebelyakh and Gusiny placers, according to the mining giant's executive committee. Prior to the increase in reserves, ALROSA's first mineral audit up to January 1, 2012, which covered about 70% of its Russian resource base, excluding the Catoca venture in Angola, revealed indicated reserves of 646.5 million carats and another 311.6 million carats inferred, based upon JORC standards.

The group's executive committee is also considering reforming ALROSA’s cutting and polishing operations, including its production facilities in Moscow, Brillianty ALROSA, and those in Barnaul and Oryol. Polishing facilities for small and medium-size rough diamonds would move from Moscow to Oryol and Barnaul. In addition, the company would enhance its technology and training at Oryol and the Barnaul Kristall Factory. The Brillianty ALROSA Branch would concentrate on manufacturing high-quality and fancy colored polished diamonds, the board noted.
RETAIL & WHOLESALE

Signet's 4Q Profit +10%

Signet Group's fourth-quarter sales rose 12% year on year to $1.5 billion for the 14 weeks that ended on February 2, 2013 compared with a 13-week period that ended on January 28, 2012. Same-store sales grew only 4%, while Internet sales rose 45% to $64 million. The jewelry retail chain reported a 10% increase in its cost of sales to $876.2 million, while gross margin improved 50 basis points to 42.1%. Profit rose nearly 10% to $171.8 million.

Signet’s sales rose 6.2% year on year for the fiscal period that represented 53 weeks, ending on February 2, to $3.98 billion, while same-store sales rose 3.3%. U.S. division sales jumped 7.9% to $3.27 billion, comparable-store sales rose 4% and branded differentiated and exclusive products increased its participation by 110 basis points to 27.4% of merchandise sales. Sales in other categories were primarily driven by colored diamonds and strong growth in watches, excluding the impact of the discontinuation of Rolex.

Tiffany's 4Q Profit +1%

Tiffany & Co. reported that sales increased 4% year on year to $1.24 billion for the fourth quarter that ended on January 31 and same-store sales were flat. Internet and catalog sales rose 6%. Cost of sales rose more than 7% to $505 million, pressuring gross margin to 59.1% from 60.4% one year earlier. Earnings improved just slightly, by 0.7% year on year, to $179.6 million or $1.40 per diluted share. Regional sales were strongest in the Asia-Pacific and weakest in the Americas.

Fiscal year sales also rose 4% year on year to $3.79 billion, while cost of sales jumped better than 9% and earnings fell 5% to $416.2 million or $3.25 per diluted share. The weakest region was the Americas where same-store sales fell 2%, but comparable-store sales powered ahead 8% in the Asia-Pacific region. Gross margin fell to 57% from 59% and largely reflected pressure from higher precious metals and diamond costs. The company's debt was $959 million compared with $712 million one year earlier and inventory levels rose 8% to $2.2 billion.
Historic Ring Sells for $1M

The Osenat auction house in Fontainebleau, France sold the engagement ring Napoleon Bonaparte gave Josephine de Beauharnais for approximately $1.2 million, including buyer's premium, against a presale estimate of $13,000 to $20,000. The gold ring garnered fierce and active bidding during the sale and features a pear-shaped sapphire and a diamond, set in the form of a toi et moi, which reportedly weigh just under a carat each. The auction house defined the ring as part of a collection from the Emperor Napoleon III and Empress Eugenie. Bonaparte gave the ring to de Beauharnais on February 24, 1796 from the collection of gems of the Imperial House. The couple married March 9, shortly before Bonaparte departed to carry out plans to invade Italy. Osenat held the sale on March 24 to mark de Beauharnais' 250 birthday.
LJ to Go Private for $2 Per Share

LJ International Inc. entered into an agreement to merge with Flora Bloom Holdings and Flora Fragrance Holdings Limited for $2 per ordinary share. LJ International stated that the transaction price represents a 24.2% premium based upon its closing share price of August 10, 2012, the last trading day prior to receiving a "going private" proposal. Immediately following the transaction, Flora will be owned by a consortium of investors led by LJ's top principals, Urban Prosperity Holding Limited, an entity owned by FountainVest China Growth Capital Fund.
Sotheby's to Sell 75-Ct. Pear-Shape Diamond

Sotheby’s New York annual spring auction of Magnificent Jewels on April 17 will offer 400 lots and a combined presale estimate in excess of $35 million. The centerpiece of this sale is an exceptional 74.79-carat, D, VVS1, potentially flawless, type IIa, pear-shaped diamond with a presale estimate of $9 million to $12 million. Lisa Hubbard, the chairman of North & South America at Sotheby’s International jewelry division, said the diamond was a truly exceptional stone that was acquired by the present owner in 2001 for $4.3 million. Additionally, jewels from the estates of Lynn Wolfson and the Gould family will highlight the auction.
JCP Resumes Promotional Pricing

Reversing its decision to offer everyday ''low prices'' in 2012, J.C. Penney resumed raising product prices at its stores with the intention of offering more typical discounts and or sales promotions in an effort to win back consumers. JCPenney lost market share and about one quarter of its revenue since changing its pricing strategy more than one year ago. The retailer stated that it now understands shoppers are motivated by promotions and prefer to receive discounts. The company's CEO, Ron Johnson, has acknowledged that it was a mistake to change a pricing policy overnight.

Integrate for Mobile or be Forgotten

Surviving the luxury marketplace requires a robust, engaging, sticky and fully integrated website and active social media presence on a mobile platform, according to the latest research from Unity Marketing. High-end consumers, or those with an income average of about $250,000, are increasingly using mobile devices as a means to engage retailers online with 98% of those surveyed shopping the Internet this way in the past three months. Those who made a purchase spent $3,702 on average and five hours per week conducting shopping-related activities.

Unity Marketing found that the number of shoppers who made purchases using a mobile device doubled to 40% overall from the previous year. A majority of young affluents report having used a mobile device more often to purchase products than mature affluents, or those 45 to 70 years of age, the group found. Affluent shoppers are not about to back step in their habits, Unity concluded, and jewelry industry marketers must be on the same page or be forgotten all together by the most important U.S. consumer group.
GENERAL

De Beers Jewellers Appoints Wang

De Beers Diamond Jewellers hired Jeanne Wang as its managing director for China. Wang spent the past 16 years with Chanel and most recently served as general manager of the Chanel fashion division in China. Wang was instrumental in building Chanel in China, including the fashion, watch and fine jewelry businesses. Prior to joining Chanel, she acquired retail operation experience as the brand manager for Max Mara.
HRD Appoints Couvreur

HRD Antwerp appointed Serge Couvreur as its general manager to succeed Georges Brys. Couvreur will focus on communicating HRD's unique competencies. Couvreur studied at Haute Etudes Commerciales and holds a degree in Commercial Management & Marketing. During his six years in office, Brys developed HRD Antwerp as a leader in technology and reinforced its international presence by opening a diamond-grading laboratory in Mumbai, a jewelry laboratory in Turkey and several drop-off services worldwide. He successfully launched programs with Chinese partners and reached key agreements in the field of research, diamond technology, training and equipment.

GJEPC, IDI Project to Boost Productivity

The Gems & Jewellery Export Promotion Council (GJEPC) and the Indian Diamond Institute (IDI) began a detailed project report to establish 13 fully-equipped diamond cutting and polishing centers in Gujarat, as part of the 12th Five Year Plan, in an effort to better serve small diamond manufacturers that have limited resources to invest in state-of-the-art equipment. The common facilities are expected to replace outdated technology and increase productivity of smaller firms.
Mouawad Necklace Achieves World Record

Mouawad is showcasing its L'Incomparable Diamond necklace until April 6 at its boutique in the Dubai Mall. The Guinness World Records in London told Rapaport News that this piece was recorded as the ''Most Valuable Necklace'' in the world on January 9 and priced at $55 million or GBP 36,361,323. The necklace features a total carat weight of 637, and includes a 407.48-carat modified, shield step-cut, IF natural fancy deep yellow diamond, 35 round diamonds, 27 pear-shaped diamonds, nine heart-shaped diamonds, five emerald-cut diamonds, five cushion-shaped diamonds, four oval diamonds, three Asscher-cut diamonds and two radiant diamonds. The necklace made its debut at the Doha Jewellery & Watch Exhibition in February.
Aire Wins Trademark Validation

The U.S. Ninth Circuit Court reversed a lower court’s dismissal of a trademark lawsuit where Breitling USA Inc. was accused of infringing on Chris Aire's Red Gold&reg; trademark. The case, filed by Solid 21 Inc. on behalf of Chris Aire Fine Jewelry and Timepieces, is one of 15 suits Aire filed in January 2011 to protect the company's Red Gold trademark. In the lawsuits, Aire accused Breitling, Swatch, Bulgari, LVMH Moet Hennessy Louis Vuitton and several other watch brands of using the Red Gold mark despite the fact that his company has held a trademark registration certificate for Red Gold since 2003.

The U.S. Patent & Trademark Office (USPTO) also deemed the trademark incontestable as far back as 2007, according to Aire's legal team. Since obtaining his trademark, Aire stated he has spent millions of dollars to brand the trademark and create demand for the line in the marketplace via tastemakers and other celebrities.

EU Further Relaxes Sanctions on Zimbabwe

Following what it called a successful constitutional referendum in Zimbabwe, the European Union (EU) further relaxed sanctions on the African nation. The EU began honoring a commitment to ease restrictions on people and entities in Zimbabwe in February following each new democratic reform measure. In a declaration posted by the High Representative, Catherine Ashton, on behalf of the EU, restrictions were suspended against 81 individuals and eight entities. However, 10 people, including President Robert Mugabe, and two companies, including the Zimbabwe Mining Development Corporation (ZMDC), remained under EU sanctions, pending a free and fair presidential election, which is tentatively scheduled for July.
MINING

Lucara Narrows Loss as Sales Begin

Lucara Diamond reported revenue of $29.1 million for the fourth quarter that ended on December 31, and sales of $41.8 million for the fiscal year. The junior mining company reported no revenue in the previous year. Lucara narrowed its loss for the year to $7.5 million compared with a loss of $18.7 million in 2011. During the year, the company's Karowe diamond mine in Botswana treated 1.4 million tonnes of ore, or 9% above the forecast, and produced 303,000 carats, which was 12% above guidance. At the Mothae project in Lesotho, a trial mining program was completed in September with final processing of hard, unweathered kimberlite from the central resource domain of the south lobe of the Mothae kimberlite.

Lucara held five sales in 2012 that included 215,762 carats of rough diamonds. Proceeds totaled $54.6 million at an average price of $253 per carat. Included in these results is the sale of a 9.46 carat blue diamond for $4.5 million or $477,272 per carat. But the company excluded from its total revenue Karowe's June, July and a portion of the September sales totaling 63,038 carats for proceeds of $12.8 million and related operating expenses and royalty expenses.
Botswana Diamonds' Loss Grows

Botswana Diamonds reported a loss of about $430,000 for the six months that ended on December 31, up 23% year-on-year, and no revenue for the period. However, the junior explorer nearly doubled the amount of cash and cash equivalents to $490,000 and total assets rose 9% year on year to $10 million. The company has exploration programs underway in Botswana, Cameroon and Mozambique. Botswana Diamonds is operating a joint venture to identify new diamondiferous kimberlites in Botswana in the Orapa region and it holds an option on 13 blocks in the Gope region.
True North to Raise $16M

True North Gems Inc. will conduct a brokered private placement of up to 175 million Class A common shares priced at 9 cents each, resulting in aggregate proceeds of up to $15,750,000. The subscriber under this private placement will be Lenomi Holdings Limited, a private investment company controlled by Joseph Gutnick. The transaction will occur in three phases (tranches) between early April and July, with the final phase requiring shareholder approval. True North intends to use the proceeds to advance its Aappaluttoq Ruby Project in Greenland.

Firestone Narrows Loss to $8M

Firestone Diamonds' revenue rose to $7.8 million for the six months that ended on December 31, compared with $3 million one year earlier. The junior miner's cost of sales fell 17% to $7 million and this enabled it to narrow its loss 43% to $7.5 million. During the first half of the fiscal year at the Liqhobong diamond mine in Lesotho, the number of carats sold jumped 85% to 79,071 and prices achieved $102 per carat, up from $59 per carat in the previous year. Firestone produced 72,833 carats during the period, compared with 69,319 carats one year earlier. The BK11 diamond mine in Botswana remained on care and maintenance during the period.
ECONWATCH
Diamond Industry Stock Report

U.S. stocks were mixed, Signet jumped 8%, both Birks and Zale fell 8%; in Hong Kong, Chow Sang Sang surged 7%, while in India, C.Mahendra leaped 10% and Su-Raj fell 9%. Mining shares were lower except Lucara (+8%) and True North (+33%). View the extended stock report

Mar. 28 Mar. 21 Chng.
$1 = Euro 0.780 0.775 0.005
$1 = Rupee 54.29 54.29 0.0
$1 = Israel Shekel 3.64 3.67 -0.03
$1 = Rand 9.20 9.31 -0.11
$1 = Canadian Dollar 1.02 1.02 0.00

Precious Metals
Gold $1,596.30 $1,615.00 -$18.70
Platinum $1,571.00 $1,578.00 -$7.00

Stock Indexes Chng.
BSE 18,835.77 18,792.87 42.90 0.2%
Dow Jones 14,574.85 14,421.49 153.36 1.1%
FTSE 6,411.74 6,388.55 23.19 0.4%
Hang Seng 22,299.63 22,225.88 73.75 0.3%
S&P 500 1,568.94 1,545.80 23.14 1.5%
Yahoo! Jewelry 1,189.95 1,148.71 41.24 3.6%
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Rapaport Weekly Market Comment April 5, 2013

De Beers raises prices 3% to 8% with April sight estimated at $650M. Secondary market speculation continues with boxes trading at premiums. CAUTION: "Rough prices are not sustainable at current level of polished prices. Rough dealers and banks are supporting risky speculative rough buying." Diamond trading quiet after Passover and Easter holidays but polished prices firm. RapNet Diamond Index (RAPI) for 1ct. stable in March, +0.4% in 1Q. Dominion Diamond Corp. 4Q sales +8% to $110M, net profit -10% to $15M, closes Ekati purchase. Chow Sang Sang 2012 revenue +6% to $2.4B, net profit -10% to $127M. Israel’s 1Q polished exports -8% to $1.6B, rough imports -10% to $891M.


RapNet Data: Apr. 4

Diamonds 936,756
Value $6,135,871,459
Carats 1,039,690
Average Discount -27.54%

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RAPAPORT ANNOUNCEMENTS
April
9-17
Tue-Wed
Rapaport Melee Auction
New York & Dubai

View details.
April
16-24
Tue-Wed

Rapaport Single Stone Auction
New York & Israel

View details.
QUOTE OF THE WEEK
Rough prices are not sustainable at the current level of polished demand. Responsible diamond manufacturers, rough dealers and their banks should refrain from supporting risky speculative rough buying.

Martin Rapaport | Rapaport Group

Careers@Rapaport

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

INDUSTRY
Polished Prices Steady in March

Certified polished diamond prices held steady in March with 0.30 carat stones continuing to outpace other sizes. Market sentiment improved in the first quarter, driven by seasonal Far East demand during the Chinese New Year period and steady U.S. bridal demand. The RapNet Diamond Index (RAPI™) for 1ct. certified polished diamonds increased by 0.1% in March, RAPI for 0.3ct. diamonds rose 1.9%, while ‎‎0.5ct. stones declined 0.1% and 3ct. diamonds increased 0.2%. During the first quarter, RAPI for 1ct. diamonds rose 0.4% but it remains 11.1% below levels reached one year ago.

Speculative rough demand influenced an estimated 4% increase in rough prices in the secondary market in March, with premiums reaching around 5%. Diamond manufacturers are encouraged by the recent stability in the polished market and have enjoyed slightly better profit margins so far this year, however, they remain cautious as rough prices are persistently one step ahead of the polished, narrowing their margins and further tightening cutting-center liquidity.

Purchase the Rapaport Monthly Report, “Cutting Margins” for all the details.

RETAIL & WHOLESALE

Chow Sang Sang's Profit -10%

Chow Sang Sang Holdings International reported that its revenue from the jewelry division surged 18% year on year to $1.9 billion in 2012. Revenue from the group's other businesses, which included wholesaling of precious metals, fell 25% to $438 million but combined company turnover rose 6% to $2.4 billion. Same-store growth was 9%.

Profit attributed to equity holders fell 10% to $127 million. By geographic region, the company's sales were basically flat in Hong Kong an in Macau at $1.6 billion but revenue rose 24% from Mainland China to $720 million. Chow Sang Sang reported no growth in the sale of higher-priced items and in an effort to lure customers into shop, department stores and the competition resorted to discounting, adding further downward pressure to the company's own gross margin.

Kingold's Profit Soars

Kingold Jewelry reported fourth quarter sales rose 20% year on year to $201.4 million for the period that ended on December 31. Cost of sales increased 17% to $189.7 million. Profit surged 133% to $7.4 million or 14 cents per share. Fiscal year sales improved 16% to $915.7 million and profit rose 25% to $32.7 million or 60 cents per diluted share. The gold jewelry manufacturing firm processed 37.8 metric tons of 24-karat gold products during the year, representing an increase of 26% from 2011, and expanded its business reach into new geographic regions across China. Additionally, by the end of 2012, Kingold had signed agreements with four major Chinese banks and widen the geographic reach of its investment gold business to make products available at 366 retail bank branches across eight provinces in China.

Sterling, Zale to Select Mediators

The U.S. District Court for the Northern District of Ohio referred Sterling Jewelers Inc. and Zale Corporation into mediation, or alternative dispute resolution (ADR), in a diamond advertising lawsuit. Sterling sued Zale in November alleging that Zale's advertisements for the Celebration Fire diamond as "the most brilliant diamond in the world" were false and misleading. In accordance with Judge John Adams' referral notice, both parties have until April 10 to review, confer and appoint three court approved mediators.

JCPenney Adds 'Bijoux Bar' Jewelry Concept

WATCH NOW: While trading slowed in the U.S. and Israel during the Passover holiday, demand in India remained selective with the best activity in the 0.30ct. to 0.69ct. range. Kristall held its fourth polished tender, which achieved $2 million from 51 lots sold. J.C. Penney is adding lower price point designer jewelry to its offerings, all pieces under $400, with a new ''Bijoux Bar'' display counter that features 16 designers. Bijoux Bar previews online April 18 and then appears in 650 JCPenney store locations on April 28.

Birks Markets Conflict-Free Fancy Yellow Diamond

Birks in Canada is premiering a 16.01 carat, VVS1, fancy intense yellow diamond at its Edmonton location beginning this week. The diamond is set in a platinum ring and adorned with diamond pavé. The diamond will head to Birks in Calgary after its Edmonton showing. This yellow diamond's color is of natural origin and its large size and high-clarity makes it exceptional, according to Birks. The stone was recently discovered and the retailer is marketing it as ''guaranteed conflict-free'' since it was sourced ethically through ''a responsible chain of custody.''

Lollobrigida's Jewels Highlight Sale

Sotheby's will offer 23 jewels from the collection of actress, photojournalist and sculptor, Gina Lollobrigida, at its upcoming Magnificent Jewels and Noble Jewels Sale in Geneva on May 14. The collection will feature important Bulgari jewels from the 1950's and 1960's worn by Lollobrigida at landmark moments in her career. The jewels were also highlights of the international touring exhibition, Bulgari – 125 Years of Italian Magnificence in 2009 to 2012. Lots include a pair of natural pearl and diamond pendant earrings, a 1954 diamond necklace-bracelet combination and a pair of detachable pear-shaped emerald and diamond earclips

IDD Partners With Aghjayan

IDD of New York partnered with bridal designer Harout Aghjayan to create the “HAROUTR” Bridal Collection for independent retailers. Harout’s designs are often associated with innovative artistry, fine workmanship and attention to detail. Harout developed this line to utilize an interchangeable head concept, allowing for designer styling with the flexibility of customization.

GENERAL
De Beers, Rio Tinto Update Client Lists

De Beers and Rio Tinto updated their client lists for the current year with De Beers adding five sightholders (82 in total) for the ‎contract year that began on April 1 and Rio Tinto increasing the number of select diamantaires to 17 from 13. ‎

De Beers Sightholder List 2012-2015

1. A. Dalumi Diamonds (Israel)
2. Almod Diamonds (USA)
3. AMC NV (Belgium)
4. Ankit Gems (India)
5. Arjav Diamonds (Belgium)
6. Asian Star (India)
7. Bhavani Gems (India)
8. Blue Star Diamonds (India)
9. Chow Sang Sang (Hong Kong)
10. Chow Tai Fook (Hong Kong)
11. Crossworks Manufacturing (Canada)
12. Dali Diamond (Belgium)
13. DDM Arabov Group (Israel)
14. De Toledo Diamonds (Israel)
15. Dharmanandan Diamonds (India)
16. Diacor International (Switzerland)
17. Diamanthandel A Spira (Belgium)
18. Dianco (Belgium)
19. Diarough (Belgium)
20. Digico Holdings (Hong Kong)
21. Dilipkumar V. Lakhi (India)
22. Dimexon International(India)
23. E.F.D. (Israel)
24. Eloquence Corporation (USA)
25. Eurostar Diamonds (Belgium)
26. Exelco (Belgium)
27. EZ Diamonds (Israel)
28. Fruchter Gad Diamonds (Israel)
29. Gitanjali Gems (India)
30. Gold Star Diamond (India)
31. Hard Stone Processing (Namibia)
32. Hari Krishna Exports (India)
33. Hasenfeld-Stein (New York)
34. H Dipak (India)
35. Henri Polak (USA)
36. Hvk International (India)
37. IGC Group (Belgium)
38. Jasani (India)
39. Jewelex India (India)
40. Julius Klein Diamonds (USA)
41. K Girdharlal International (India)
42. KARP Impex (India)
43. KGK Diamonds (India)
44. Kiran Gems (India)
45. KP Sanghvi & Sons (India)
46. Kristall (Russian Federation)
47. L. M. Van Moppes & Sons (United Kingdom)
48. Laurelton Diamonds (Belgium)
49. Laxmi Diamond (India)
50. Lazare Kaplan International (USA)
51. Leo Schachter International (Israel)
52. Lieber & Solow (USA)
53. M Suresh Company (India)
54. Mahendra Brothers Exports (India)
55. Mohit Diamonds (India)
56. MOTIGANZ Diamond Group (Israel)
57. Niru Diamonds Israel (1987) (Israel)
58. Pluczenik Diamond Company (Belgium)
59. Premier Gem (Group) (USA)
60. Richold (Switzerland)
61. Rosy Blue (India) (Belgium)
62. Rosy Blue Business Alliance (Belgium)
63. S. Vinodkumar Diamonds (India)
64. Safdico (Mauritius)
65. Sahar Atid Diamonds (Israel)
66. Schachter and Namdar (South Africa)
67. Shairu Gems (India)
68. Sheetal Manufacturing Company (India)
69. Shree Ramkrishna Export (India)
70. Shrenuj & Company (India)
71. Star Diamond Group (Belgium)
72. Stuller (USA)
73. Suashish Diamonds (India)
74. Tache Company (Belgium)
75. Tasaki & Co. (Japan)
76. Trau Bros (Belgium)
77. Venus Jewel (India)
78. Vijay Diamond (UAE)
79. Wing Hang Company (Hong Kong)
80. Yerushalmi Bros. Diamonds (Israel)
81. Yoshfe Diamonds International (Israel)
82. Yosi Glick Diamonds (2003) (Israel)

Rio Tinto Select Diamantaires of 2013

1. Crossworks Manufacturing (Vancouver)
2. CTF Diamond Trading Company (Hong Kong)
3. Diambel (Antwerp)
4. Dianco (Antwerp)
5. Diarough (Antwerp)
6. Dimexon Diamonds (Mumbai)
7. E. Schreiber (New York)
8. Gemmata (Antwerp)
9. Hari Krishna Exports (Mumbai)
10. IDH Diamonds (Antwerp)
11. Interjewel (Mumbai)
12. KP Sanghvi & Sons (Mumbai)
13. L&N Diamonds (Ramat Gan)
14. Laurelton Diamonds (Antwerp)
15. Sheetal Group Mumbai (Antwerp)
16. Signet Direct Diamond Sourcing (U.S.)
17. Venus Jewel (Mumbai)

Istanbul Show Attendance +30%

UBM Rotaforte, through the sponsorship of Turk Ekonomi Bankasi (Turkish Economy Bank), concluded its 36th Istanbul Jewelry Show in March, attaining record attendance at nearly 27,000, up 30% from one year ago. UBM determined that eight in 10 show attendees were domestic, while 19% arrived from overseas, representing 110 countries. UBM also hosts an Istanbul jewelry fair in September or October.

GJEPC Hosts Banking Conference

The Gem & Jewellery Export Promotion Council (GJEPC) hosted a banking conference aimed at strengthening the diamond industry’s relationship with lending institutions. ‎Indian bank credit to the diamond industry is estimated to be about $6 billion with an average ‎utilization rate of around $5.3 billion.‎ With Basel 3 regulations being implemented this year, the global banking sector is exercising ‎greater scrutiny in lending.

MINING
Dominion's Profit -10%

Dominion Diamond Corporation, formerly known as Harry Winston Diamond Corporation, reported that sales from its mining operations rose 8% year on year to ‎‎$110.1 million in the fourth quarter that ended on January 31. Profit dropped 10% to $14.8 million, or 18 cents per share, as operating profit from the mining division fell 5% to $12 million and retail profit declined 28% to $2.8 million.‎ Rough diamond ‎sales improved due to an 11% increase in prices and an ‎improved sales mix, even though this was partially offset by a 3% decrease in the volume of goods sold from the Diavik mine. ‎

The company reported that it held 500,000 carats of rough diamonds in inventory, ‎estimated at $65 million as of January 31, of which approximately $25 million worth of goods were available for ‎sale and the remaining $40 million are currently being sorted.‎ For the full fiscal year, sales from continuing mining operations rose 19% to $345.4 ‎million and retail sales rose 6% to $435.8 million. The increase resulted from a 49% rise in the volume of carats sold during ‎the year, offset by a 20% decrease in achieved rough diamond prices.‎ Profit ‎rose 38% to $35.2 million as the mining division contributed $22.8 million, up 32% year on year, and retail contributed $12.4 ‎million, up 58 percent.

Dominion expects to close its acquisition of the Ekati mine in the coming ‎week after receiving regulatory approval from the government of Canada and authorities in the ‎Northwest Territories.‎ The company agreed in November 2012 to buy ‎the mine from BHP Billiton for $500 million. The deal includes Ekati’s associated diamond-sorting and sales facilities in Yellowknife and Antwerp.

Kennady Intersects Kimberlite

Kennady Diamonds Inc. intercepted kimberlite at its first two drill holes on the Kennady North diamond property. Drill hole KDI-13-001 was drilled approximately 100 meters to the northwest of the main Kelvin kimberlite and intersected kimberlite over approximately 33 meters from a down-hole depth of approximately 62 meters in addition to intermittent intersections from approximately 207 meters to 215 meters. A second hole, KDI-13-002, was drilled from the same platform, but at a shallower inclination. This hole intercepted kimberlite at a down-hole depth of approximately 60 meters. Drilling of this hole continues.

Goodrich's Tender Nets $13M

Goodrich Resources Ltd. held its first rough diamond sale following the acquisition of the Kimberley Diamond Company in January. Goodrich reported selling 13,234.88 carats for $12.7 million during a March tender. The company also reported on its recovery grade, which was 4.42 carats per hundred tonnes (CPHT) of ore, representing an 18 percent improvement against the 2012 average of 3.74 carats CPHT. Goodrich expects to release its financial results at the end of April.

ALROSA, ENDIAMA Target New Projects

ALROSA and Angola’s ENDIAMA are discussing prospects for exploration using geological material already produced by ALROSA’s specialists in ‎Angola that indicate a high probability of discovering a new large primary diamond deposit. In other news, ALROSA sold its controlling stake in the iron ore project OJSC Timir to EVRAZ for $160 million, providing EVRAZ with a 51% stake to ALROSA's 49% share and Vnesheconombank holds one share.
Shore Gold Narrows Loss

Shore Gold Inc. recorded a loss of $9.3 million or 4 cents per share for the fiscal year that ended on December 31, compared with a loss of $219.9 million or 98 cents per share in 2011. The diamond explorer is proceeding with the completion of its environmental permitting process for the Star-Orion South diamond project in Canada and continues to seek capital through a third party or a syndicate of investors. Shore Gold reported working capital of $8.6 million as of December 31.
ECONWATCH
Diamond Industry Stock Report

U.S. stocks mostly higher except for Blue Nile (-3%), Movado (-6%) and Signet (-2%). Mining shares were lower led by Stellar (-14%), Gemfields (-13%), True North (-13%), Lucara (-9%) and Rocwell (-4%). View the extended stock report
Apr. 4 Mar. 28 Chng.
$1 = Euro 0.770 0.780 -0.010
$1 = Rupee 54.89 54.29 0.6
$1 = Israel Shekel 3.62 3.64 -0.02
$1 = Rand 9.15 9.20 -0.05
$1 = Canadian Dollar 1.01 1.02 -0.01

Precious Metals
Gold $1,553.70 $1,596.30 -$42.60
Platinum $1,523.00 $1,571.00 -$48.00

Stock Indexes Chng.
BSE 18,509.70 18,835.77 -326.07 -1.7%
Dow Jones 14,606.30 14,574.85 31.45 0.2%
FTSE 6,344.12 6,411.74 -67.62 -1.1%
Hang Seng 22,337.49 22,299.63 37.86 0.2%
S&P 500 1,559.89 1,568.94 -9.05 -0.6%
Yahoo! Jewelry 1,174.70 1,189.95 -15.25 -1.3%
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Rapaport Weekly Market Comment April 12, 2013

Polished diamond markets quiet with steady U.S. and Chinese demand. Rough selling at average 5% premium on secondary market, while increased supply calms price speculation. Cutters remain cautious and polished supply tight. Rapaport Melee Index +7% in 1Q 2013. Sotheby’s HK sells $61.4M (78.6% by lot) with round, 28.86ct., D, IF, 3X diamond selling for $6.9M (world record $239,532/ct.). Michael Hill sales +9% to $636M, same-store sales +2% for 9 months. U.S. Feb. polished imports flat at $1.5B, exports -8% to $1.5B. Japan’s Feb. polished imports +24% to $54M. JCPenney reappoints Myron Ullman as CEO. India’s Maharashtra State raises VAT on diamonds, precious metals to 1.1%.

RapNet Data: Apr. 11

Diamonds 982,794
Value $6,476,404,895
Carats 1,090,536
Average Discount -27.26%

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RAPAPORT ANNOUNCEMENTS
April
9-17
Tue-Wed


Rapaport Melee Auction
New York & Dubai

View details

April
16-24
Tue-Wed

Rapaport Single Stone Auction
New York & Israel

View details.
QUOTE OF THE WEEK
Now JCPenney doesn’t look survivable. It’s in the process of disappearing but there may be a way to stabilize it -- slow the pace of [spending], raise cash, sell stores, sell real estate -- the place is in complete catastrophe. The company needs a plan and to improve relationships with the financial community, suppliers and vendors.

Howard Davidowitz | Davidowitz & Assoc.
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
RMI +7% in 1Q13

The Rapaport Melee Index (RMI) for small diamonds increased 7% to 135.00 in the first quarter of 2013. While there has been a noticeable recovery since the third and fourth quarters of 2012, prices remain below last year’s when the RMI was 141.00. In the first quarter of 2013, prices showed consistent improvement and followed market confidence; however, there is concern that polished prices are being fueled by rough speculation rather than actual demand.

Rapaport’s first quarter Diamond Auctions sold over 130,000 carats for $25.1 million. More diamonds are being traded through the Rapaport auction platform even though there is a significant decline in second-hand recycled diamonds, with a 35% decline in gold sales due to lower gold prices.

De Beers Sight Estimate $650M

The De Beers April sight ended this past week with an estimated value of $650 million after ‎the company raised prices by an average of 3%. Some boxes, including stones ‎above 5 carats and 1 carat to 2 carat goods, increased by high single-digit percentages. ‎De Beers boxes continue to sell at an average premium of about 5% on the ‎secondary market. ‎ Sightholders expected a larger increase from De Beers, so speculation in the rough market has calmed since the sight closed. Biggest concerns ‎remain low profit margins achieved in manufacturing. As a ‎result, manufacturers are not increasing their output since the next two months ‎are traditionally a quieter period in the polished market. Watch more on the year to date sight total.

RETAIL & WHOLESALE

Ullman Vows to Save JCPenney

Mike Ullman, JCPenney's rehired CEO, said his first priority would be to reconnect with the U.S. consumer in order to halt the retailer's financial blood bath. Ullman, who was tapped over the weekend to take the post he held from 2005 to 2011, vowed to relay JCPenney's strong product value message, which he said was lost during Ron Johnson's relatively short tenure. JCPenney will return to the high-low pricing model, stabilize gross margin and reintroduce couponing and discounting. Ullman expects to emphasize the value of merchandise with competitive offerings by the back-to-school season, which hits in August. He plans to allow the transformation of JCPenney's home goods department as planned by May, but then hold off on any further incorporation of ''stores within a store,'' which was one of Johnson's expensive initiatives.

March Retail Sales Growth Falls Short

U.S. chain-store sales posted a modest gain of 1.6% year on year for the fiscal month of March, according to the International Council of Shopping Centers (ICSC). The comparable-store sales performance during the month, which included the Easter weekend, was far below ICSC Research’s expectations. The group blamed cooler weather across much of the U.S. for weak consumer spending. ICSC research anticipates that same-store sales in April will rise between 2% and 3%

Sotheby's Jewels Sale Nets $61M

Sotheby’s Hong Kong sale of magnificent jewels and jadeite generated $61.4 million with high-end white diamonds dominating the top lots. ‎The auction sold 78.6% by lot with the top lot an un-mounted brilliant cut, 28.86-carat, D, flawless diamond that sold ‎for $6.9 million, or a record $239,351 per carat, to a private Asian buyer. ‎The second top lot was pendent earrings weighing 8 carats each, which sold for $2.8 ‎million, or $239,352 per carat, also to a private buyer from Asia. ‎

Michael Hill Sales +9%

Michael Hill International reported that sales for the first three quarters of the fiscal year, which included actual totals for the first eight months plus preliminary results for March, rose 8.8% year on year to $363 million. Same-store sales rose 2.2 percent. By region, stores sales rose 11.4% in Australia to $233 million, while same-store sales increased 4.2 percent; in New Zealand, revenue climbed 3.6% to $74 million and same-store sales were up 3.1% and in Canada, sales surged 20.6% to $33 million with comparable-store sales only 2.8% higher. In the U.S., revenue and same-store sales rose 7.7% to $7.7 million.

Kendra Scott Opens New Boutique

Kendra Scott plans to open at Fashion Island in Newport Beach, California on April 15. The boutique's façade will boast the signature Kendra Scott medallion, while the interior will feature a ''Danielle'' display table and space for in-store entertaining with a full kitchen. The boutique will include the signature Kendra Scott Color Bar, with a 55-inch touch-screen display monitor, iPads and a kaleidoscope of 26 gemstones and 23 jewelry silhouettes to provide an interactive experience to guests.

H.Stern Opens Stand-Alone Store

H.Stern opened its first stand-alone jewelry boutique in the U.K. on Sloane Street in London. H.Stern is also located at Harrods in the fine jewelry room. The new H.Stern boutique showcases the brand’s signature jewelry collections such as Stars (Stern means star in German and is H.Stern’s visual icon), Fluid Gold, Moonlight and Copernicus. The space covers 156 square meters and incorporates what the retailer considered to be elegant curves for its furniture and interior design, to reveal a feminine silhouette of the "S" in the H.Stern logo.

Maharashtra's VAT Rises to 1.1%

India’s Maharashtra State government raised the rate of value added tax (VAT) for ‎diamonds and precious metals sold in the state on April 1 from 1% to 1.1%. The directive continues through March 31, 2014. The same increase applies to precious metals, including gold, silver, platinum, ‎osmium, palladium, rhodium and ruthenium, as well as articles made from precious metals of fineness not less than 50%.

Zales Bumps Tiffany on Affluent Survey

Post-recession growth has not been uniform across income segments, according to Unity Marketing, which determined that it is the top 20% of earners, or 24.2 million households, who are driving the recovery. But even more interesting from the data is that ultra-affluents, or those earning $250,000 or more annually, are spending less on luxury goods, especially jewelry and watches.

Spending increases are coming from those making $100,000 to $249,999 per year, or a group Unity labels the HENRYs -- high earnings, not rich yet -- and they account for 21.8 million households. In Unity Marketing's latest analysis, Luxury Report 2013, ultra-affluents are behaving more like the HENRYs as they have reduced purchases on luxury items and even the high-income ultras are trading down to less premium brands. One such example the report noted was that affluent consumers chose Zales over Tiffany this year as ultra-affluents' jeweler of choice.

Furthermore, in 2012, Unity found that only 58.4% of affluents purchased jewelry this past year, down from 75.7% in 2011; and 70.6% purchased watches compared with 88.6% in 2011. Double-digit declines in spending were also observed for clothing, fashion accessories and premium beauty products, according to Unity Marketing. The group warned marketers to prepare for selective purchases by affluents as these consumers make tradeoffs to maximize the emotive and luxury return on that investment.

Sterling, Zale Pick Mediator

Plaintiff Sterling Jewelers and defendant Zale Corporation selected a mediator in the case challenging Zale's Celebration Diamond as the most brilliant in the world. The rival retailers picked Charles Lyon, of Calfee, Halter & Griswold of Cleveland, Ohio to head up the negotiations. An initial conference is planned for May 2.
OECD Heads Up Due Diligence Guidance

The Organization for Economic Cooperation and Development (OECD) is weighing projects intended to support due diligence guidance for the responsible supply chain of minerals, including diamonds, from conflict-affected and high-risk areas of the world. Various parties, including the Responsible Jewellery Council (RJC), will meet in Paris to examine case studies, discuss activities underway from stakeholders and other proposals to improve artisanal mining. RJC extended the invitation to industry members to learn more or become involved by contacting Fiona Solomon, the director of RJC's standards development.

RJC is a member of the OECD-hosted multi-stakeholder Interim Governance Group for due diligence guidance along with the London Bullion Market Association (LBMA), the World Gold Council (WGC), civil society and governments.

MINING

Dominion Closes Ekati Sale

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, completed its planned acquisition of the Ekati diamond mine, which included associated diamond sorting and sales facilities in Yellowknife, Canada and Antwerp. Ekati consists of a core zone, which includes the current operating mine and other permitted kimberlite pipes, as well as a buffer zone, an adjacent area hosting kimberlite pipes having both development and exploration potential. Dominion Diamond purchased the assets from BHP Billiton for $553 million and it officially marks the end of BHP's diamond investment.

Ekati held cash of approximately $65 million on the closing date and two sales cycles (10 weeks) of diamond inventory either in the process of being sorted and valued or available for sale. Dominion Diamond expects to release a detailed mine plan for Ekati on or before April 24.

ZMDC Blames Closed Mines on Funding

Zimbabwe’s Mines & Mining Development Deputy Minister, Gift Chimanikire, accused the Zimbabwe Mining Development Corporation (ZMDC) of "gross incompetence” over its failure to reopen closed mines. However, ZMDC’s managing director, Jerry Ndlovu, claimed it is inhibited from reopening mines due to limited lines of credit since Western sanctions restrict cash flow, and due to the exorbitant financing requirements of refurbishing mines.

In other news, the government denied it had issued diamond exploration licenses in the Bikita, Masvingo area, despite contrary reports. It also remained unaware of how Nan Jiang Africa Resources had set up to mine diamonds in the region without a license or approval.

Meanwhile, Ahmed bin Sulayem, the executive chairman of the Dubai Multi Commodities Centre (DMCC), chided Western countries for placing sanctions on Zimbabwe, saying sanctions were denying Zimbabwe its “lifeblood.” He was addressing a DMCC precious metals conference underway in Dubai.

CAR Diamonds Funded Rebels

Some diamond miners in Central African Republic (CAR) told Radio France Internationale that they funded the Seleka Coalition, which seized power and overthrew President Francois Bozize on March 24. Traders claimed that Bozize created enemies by seizing their diamonds and cash since 2008, none of which has been returned to the diamond miners. While Bozize fled to Cameroon this past week, no one has acknowledged where the seized goods reside. Some traders confessed that they were charged with going into Sudan to sell rough diamonds and their stockpiles in CAR were also confiscated.

UN Progresses on Security in Cote d'Ivoire

Security remains a priority in Côte d’Ivoire ahead of local elections on April 21 and following an outbreak of violence in March. The UN Operation in Côte d’Ivoire (UNOCI) will assist with security in the region, as well as address the sources of this new round of conflict. Blue helmets have deployed to Petit Guiglo and are supporting Ivorian forces and protecting civilians through ground and air patrols. UNOCI provides technical support to the polls through the independent electoral commission. It has also supported the reunification and stabilization of Cote d'Ivoire, which remains under a rough export ban by the Kimberley Process. Economic growth in Cote d’Ivoire is predicted to reach 9% this year.

Aikhal Reaches Design Capacity

ALROSA’s Aikhal underground mine has reached its design capacity of 500 thousand tonnes of ore per year. Aikhal is expected to produce 2.5 million carats of rough diamonds per year at full capacity. The Aikhal pipe is one of ALROSA's oldest deposits and contains more than 14 million carats of rough diamonds, with inferred and indicated resources of more than 54 million carats, according to a 2012 JORC-compliant audit.

Zambia Constrains Gemfields

Gemfields is seeking an exception to Zambia's rule of selling emeralds in local currency, and has engaged the Bank of Zambia to permit trading in U.S. dollars. Zambia prohibited quoting and pricing gems and other items in foreign currency almost one year ago. Gemfields, which operates the Kagem emerald mine in Zambia, would invoice outside buyers in dollars and Zambian buyers in local currency.

Meanwhile, Gemfields is also facing a possible ban of even selling its gemstones outside of Zambia. Forcing all buyers to come into Zambia for an emerald auction would be detrimental and prevent the firm from freely selling goods on the open market, according to a note the company sent to shareholders. Gemfields had already agreed to include Zambia as one of several auction destinations this year.

Renard 65 Valuation Returns $250 Per Ct.

Stornoway Diamond Corporation reported the Renard 65 bulk sample of rough diamonds, valued by WWW International Diamond Consultants, held an average price of $250 per carat. The diamond price model for Renard 65 is now $180 per carat, with a high sensitivity of $203 per carat and a minimum sensitivity of $169 carat. The bulk sample valuation included two higher-value stones, a 9.77-carat, G diamond of $8,500 per carat and a 6.40-carat, F diamond of $5,900 per carat.


Botswana Diamonds Adds License

Botswana Diamonds added another license to its option agreement with a Mozambican company, Morminas, a subsidiary of the EIP Group of Portugal. This brings the total to three license blocks that are being evaluated on the Save River in Mozambique, close to the Zimbabwean border. The Save River runs southeastwards and drains from the Marange diamond fields. The agreement stipulates a six-month exclusive period during which Botswana Diamonds will review the available data on the licenses and undertake preliminary exploration.

ECONWATCH

Diamond Industry Stock Report

pastingU.S. retailers were mostly higher, Movado and Signet (+5%), Sotheby's (+7%) and Zale (+9%) led the way. European and Indian shares were mixed and mostly unchanged. Mining shares were trading lower, Rockwell, Shore Gold and Gemfields all down by more than 10%. View the extended stock report.
$1 = Euro 0.760 0.770 -0.010
$1 = Rupee 54.27 54.89 -0.6
$1 = Israel Shekel 3.63 3.62 0.01
$1 = Rand 8.90 9.15 -0.25
$1 = Canadian Dollar 1.01 1.01 0.00

Precious Metals
Gold $1,561.00 $1,553.70 $7.30
Platinum $1,532.00 $1,523.00 $9.00

Stock Indexes Chng.
BSE 18,542.20 18,509.70 32.50 0.2%
Dow Jones 14,864.83 14,606.30 258.53 1.8%
FTSE 6,416.14 6,344.12 72.02 1.1%
Hang Seng 22,101.27 22,337.49 -236.22 -1.1%
S&P 500 1,593.35 1,559.89 33.46 2.1%
Yahoo! Jewelry 1,196.04 1,174.70 21.34 1.8%
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Rapaport Weekly Market Comment April 19, 2013

Plunging gold prices have not yet impacted diamond prices or demand. Strong demand and very high prices for exceptional diamonds and jewelry at Christie's and Sotheby's NY auctions. Sharply lower gold prices have created surging demand in China with shortages of jewelry before important May Day holiday. Basel show expectations mixed. Christie’s NY sells $81M (82% by lot) with cushion-cut, 34.65ct., fancy intense pink diamond sold for $39M ($1.14M/ct.). Sotheby’s NY sells $54M (82% by lot) with pear-shape, 74.79ct., D, VVS1 sold for $14M ($189,397/ct.). Rio Tinto’s 1Q diamond production -4% to 3.2M cts. Belgium’s March polished exports -12% to $1.2B, rough imports -13% to $1.2B.
RapNet Data: Apr. 18

Diamonds 968,713
Value $6,269,107,512
Carats 1,066,517
Average Discount -27.19%

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RAPAPORT ANNOUNCEMENTS

April
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Rapaport Single Stone Auction
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Apr-May
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June
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Sun

Rapaport Breakfast & Conference at JCK
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8 a.m. to 10 a.m. -- South Seas Ballroom, breakfast and Martin Rapaport's ''State of the Diamond Industry'' presentation.

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

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Register now, or email conference@diamonds.net or call 1.702.893.9400, these events are free but seating is limited.

QUOTE OF THE WEEK
The truly exceptional 74.79-carat stone was a thrill to auction at Sotheby's New York and exemplifies the strength of the market for white diamonds over the last decade. It was acquired by the present owner in 2001 for $4.3 million, and today sold for a record $14.2 million.

Lisa Hubbard | Sotheby's Intl. Jewelry Division

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INDUSTRY
Princie Diamond Sells for $39M

WATCH NOW: Christie’s spring auctions started off with a bang as its New York sale garnered $81,358,700, a total not generally seen in the City. The sale got a big boost from the top lot The Princie Diamond, a 34.65-carat cushion cut, fancy intense pink Golconda diamond which sold to a deep pocketed anonymous buyer for $39,323,750 or $1,135,000 per carat.

The round of bidding went quickly and was sold to a bidder on the phone manned by none other than Christie’s managing director and head of worldwide jewelry, Francois Curiel himself. There was steady bidding at the sale with most items staying within the estimate, in a room filled with buyers and dealers who had come to find out how the big diamonds and the Princie would fare.
Sotheby's Jewels Auction Tops $54M

WATCH NOW: Sotheby's New York sale of magnificent jewels garnered $53,490,938 and was 82.4% sold by lot. The top lot was a 74.79-carat, D, VVS1 potentially internally flawless, type IIa, pear-shaped diamond that sold for $14.165 million. The diamond was acquired in 2001 for $4.3 million. Other highlights included a 21.46-carat, D, internally flawless, type IIa emerald-cut diamond ring that sold for $3.189 million, while a 22.48-carat emerald and diamond brooch fetched $2.909 million.

Speculators Trigger Price Drop

The World Gold Council issued a statement saying the fall in gold prices was triggered by speculative traders operating in the futures markets with a short-term goal of generating a trading profit. The group added that a surge in gold purchases is spanning markets from India and China to the U.S., Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years. Since gold operates on the basic economic fundamentals of demand and supply, the group's view is that demand is strong, while supply remains constrained, and that this dynamic ultimately drives the long-term price of the metal.

RETAIL & WHOLESALE
Swiss Watch Exports -3%

Swiss watch exports fell 2.5% year on year to $1.73 billion in February ‎due mainly to softer demand from China and Hong Kong, according to the Federation of the Swiss ‎Watch Industry.‎ Exports of wristwatches declined by 2% to $1.62 billion, with the number of units down 15% to 1.027 million. The value of other products ‎dropped 10% to $103.7 million. Exports to ‎China fell 34%, while they were 24% lower in Hong Kong. During January and February, total Swiss watch exports increased 4% to $3.32 billion. ‎
Jewelry Store Sales +4%

U.S. jewelry store sales rose 3.8% year on year in February to $2.756 billion, which was a new high for the month. In addition, the consumer price inflation (CPI) for jewelry fell 3%. Additionally, January's sales figure was revised $20 million lower than earlier estimates to $1.934 billion, representing a year-on-year increase of 13.5%. For the first two months of 2013, U.S. jewelry store sales have risen a healthy 7.6% to $4.69 billion and the CPI has fallen by almost 4%.
Jewelry CPI -3%

The U.S. consumer price index (CPI) for jewelry eased again in March, falling 2.9% year on year to 176.1 points in response to weaker prices for precious metals. The index was a touch higher than February's reading of 175.9 points. Nonetheless, the CPI maintained a historically strong trend, with March representing the 27th consecutive month of a reading of more than 170 points. With the recent and dramatic drop in gold prices this month, that trend may break with April's report.
Lazare Kaplan Sales -31%; Sues ADB

Lazare Kaplan International Inc. notified the Securities and Exchange Commission (SEC) that it would again be filing a quarterly financial report late for the fiscal period that ended on February 28. Nonetheless, it estimated that revenue for the fiscal third quarter fell 31% year on year to $15.3 million, while sales for the first nine months of the fiscal year slipped 38% to and $50.2 million.

Lazare Kaplan has been unable to file its quarterly and fiscal-year financial statements since September 2009 due to unresolved material uncertainties concerning, among other things, ongoing litigation with Antwerp Diamond Bank (ADB) N.V. and KBC Bank N.V. Lazare Kaplan has appealed the dismissal of a $500 million Racketeer Influenced and Corrupt Organizations Act (RICO) complaint against the banks in the U.S., and on March 21 it filed criminal proceedings against Antwerp Diamond Bank in Antwerp, alleging fraud, embezzlement and money laundering. Proceedings are scheduled to commence on May 3.
Care Reafirms Rating on Rajesh Exports

Care Ratings reaffirmed its A3+ rating on Rajesh Exports Ltd. short-term fund and non-fund bank facilities of $118 million (Rs. 640 crore.) Care drew ratings strength from Rajesh Exports' rank as a top manufacturer and exporter of gold jewelry, a for its strong management and in-house design teams. The rating was constrained by low profit margins, geographical and client concentration risks and working capital intensive nature of the company's operations.

The Seamless Shopping Experience

Retailers that deliver on their customers’ expectations by providing a seamless shopping experience – including in store, online and through a mobile device – will win loyalty and gain a competitive advantage, according to the Accenture Seamless Retail Study.

The study also concluded that half of consumers believe the best thing retailers can do to improve the shopping experience is to better integrate channels, while 89% of consumers said it is important for retailers to let them shop for products in the way that is most convenient, no matter which sales channel they choose.

Furthermore, 82% of consumers stated they want retailers to provide information on current product availability; however, only 21% of retailers offered that service, according to Accenture.
GENERAL

Fairtrade, Fairmined Gold Label Splits

The Alliance for Responsible Mining (ARM) and Fairtrade International (FLO) will not renew their partnership contract with Fairmined and Fairtrade gold, so the original agreement will end on April 22 and the standards and label will split into two different systems. Only the Fairtrade Mark will be used for precious metals after that date, which all parties involved believe is more consumer friendly. FLO and ARM jointly launched Fairtrade and Fairmined gold in the U.K. in 2011. ARM, which will maintain the Fairmined scheme moving forward, believes that artisanal and small-scale mining is increasingly being recognized as a sector that presents real development opportunities for impoverished communities worldwide and is at the heart of global development.

Endiama Hosts June Conference

Endiama is organizing the Angolan Diamond Centenary Conference 2013 in Luanda on June 20 and 21. Participants so far include ALROSA, the World Diamond Council, the Dubai Multi Commodities Centre, the Gem & Jewellery Export Promotion Council, the Shanghai Diamond Exchange, the New York Diamond Dealers Club and representatives from the Kimberley Process. The conference aims to highlight the accomplishments of Angola in the diamond industry, emphasize its potential and announce new Mining Law incentives for investors.

MINING
Zimbabwe Earns $5M From Diamond Revenue

Zimbabwe's Finance Minister Tendai Biti said diamond miners should remit at least 50% of their revenue to the government to help boost economic activity. Biti said that diamonds produced no revenue in January or February, but in March, the government received $5 million against a target of $15 million. In 2012, Biti anticipated diamond revenue of $600 million, but only received $41.6 million. He added that diamond exports in March amounted to $114 million, with Mbada Diamonds contributing $44.7 million followed by Anjin Investments at $30 million and Diamond Mining Corporation at $18 million.
Petra Recovers High-Quality Blue Stone

Petra Diamonds recovered a high-quality, top-color 25.50-carat blue diamond from its Cullinan mine in South Africa. The company is currently implementing an expansion plan at Cullinan, which will take production from 870,000 carats per year in 2012 to a projected 5 million carats per year by the end of 2019.

Ekati Production -26%

BHP Billiton reported that production at the Ekati diamond mine in Canada fell 26% year on year ‎to 322,000 carats in the third fiscal quarter that ended on March 31. Ekati production is ‎down 32 percent to 930,000 carats during the first nine months of the fiscal year. ‎BHP Billiton completed the sale of its stake in Ekati to Dominion Diamond Corporation on April 10 for $553 ‎million, marking its exit from the diamond sector

Diavik Production +21%

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, reported that diamond production at the Diavik diamond mine in Canada rose 21% year on year to 1.9 million carats during the first quarter, which ended on March 31. The increase was primarily due to improved grades in each of the kimberlite pipes as the average measurement rose to 3.87 carats per tonne, compared with 3.03 carats per tonne of ore one year ago.

A new mine plan and budget for calendar 2013 has been approved by Dominion's partner, Rio Tinto, and they anticipate the Diavik diamond mine will produce approximately 6 million carats, up almost 40% from the previous year. Mining activities will be exclusively underground.

Rio Tinto Production -4%

Rio Tinto's diamond production fell 4% year on year to 3.24 million carats for the first quarter that ended on March 31. The company's Argyle diamond mine in Australia produced 1.99 million carats, representing a year-on-year decline of 15%. Rio's share of Diavik's production surged 21% to 1.167 million carats and the Murowa diamond mine in Zimbabwe improved production by 20% year on year to 79,000 carats.

Rockwell Restarts Niewejaarskraal

Rockwell Diamonds Inc. will invest capital from the sale of its Klipdam diamond mine into bringing the Niewejaarskraal diamond mine back to production and for growing the company's mining footprint in the Middle Orange River region of South Africa. Rockwell sold Klipdam and its associated properties for $5.2 million to a private alluvial diamond miner in three tranches, or payments. The first tranche was received upon signing the deal, and the remaining purchase price will be paid to Rockwell in eight monthly installments. Klipdam included the contiguous Holpan 161 and Klipdam 157 farms, covering an area of 3,836 hectares, as well as prospecting properties Erf 1 and Erf 2004, Windsorton.

The company's board approved a $2 million budget to take Niewejaarskraal out of care and maintenance operations. The project entails bringing the dense media-separation plant into operation and production will be supplemented through the addition of four rotary pans from the Tirisano mine in addition to using equipment from Klipdam that was not part of the sale. Trial mining operations are expected after a six-month implementation phase.
STATS
Belgium

Mar. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,214 -12% $3,349 -6%
Polished imports $1,268 -3% $3,216 -13%
Net exports ($54) $133

Rough imports $1,184 -13% $3,455 -1%
Rough exports $1,405 -4% $3,583 -1%
Net imports ($221) ($128)

Net diamond account $167 -3% $261
ECONWATCH

Diamond Industry Stock Report

Widspread declines were observed in industry stocks with Movado, Saks, Sotheby's, Zale, Classic Diamond and Chow Sang Sang hit the hardest on the retail side, while Dominion, Peregrine, Rockwell, True North, Firestone and Stellar all down by double-digits for mining investors. View the extended stock report.
Apr. 18 Apr. 11 Chng.
$1 = Euro 0.760 0.760 0.000
$1 = Rupee 54.02 54.27 -0.3
$1 = Israel Shekel 3.63 3.63 0.00
$1 = Rand 9.19 8.90 0.29
$1 = Canadian Dollar 1.03 1.01 0.02

Precious Metals
Gold $1,388.00 $1,561.00 -$173.00
Platinum $1,424.00 $1,532.00 -$108.00

Stock Indexes Chng.
BSE 19,016.46 18,542.20 474.26 2.6%
Dow Jones 14,539.29 14,864.83 -325.54 -2.2%
FTSE 6,243.67 6,416.14 -172.47 -2.7%
Hang Seng 21,512.52 22,101.27 -588.75 -2.7%
S&P 500 1,541.70 1,593.35 -51.65 -3.2%
Yahoo! Jewelry 1,161.24 1,196.04 -34.80 -2.9%
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Rapaport Weekly Market Comment April 26, 2013


Cutting centers very quiet with liquidity problems developing in India. Booming Chinese demand for gold jewelry follows sharp gold price plunge with retailers focusing on gold instead of diamonds for important May Day holiday. Large stone market doing well following successful auctions with positive expectations for Basel show. Rough trading stable with less speculation. De Beers 1Q production +3% to 6.2M cts.‎ ‎Gem Diamonds 1Q Letšeng rough sales -20% to $47M with average price -19% to $1,599/ct. Luk Fook’s 1Q China same-store sales +14%, Hong Kong, Macau +29%. Bonhams London sells rare, 5.3ct., fancy deep-blue diamond to Graff for $9.5M ($1.8M/ct.).
RapNet Data: Apr. 25

Diamonds 984,193
Value $6,356,711,252
Carats 1,083,416
Average Discount -27.27%

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RAPAPORT ANNOUNCEMENTS
Apr-May
30-8
Tue-Wed
Rapaport Melee Auction
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May
16-22
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Rapaport Single Stone Auction
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June
2
Sun
Rapaport Breakfast & Conference at JCK
Mandalay Bay Resort

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

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

2 p.m to 4:30 p.m. -- Banyan Ballroom, Rapaport Fair Trade Jewelry Conference.

Register now, or email conference@diamonds.net or call 1.702.893.9400, these events are free but seating is limited.

QUOTE OF THE WEEK
For small businesses, there is nothing fair about the Marketplace Fairness Act. The U.S. legislation stems from a fight between big bricks-and-mortar national retailers and big online retailers, all of whom seem unconcerned that small enterprises—and the jobs they create—are going to be collateral damage.

John Donahoe | eBay Inc.

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INDUSTRY
ALROSA's Board Approves Dividend

ALROSA's supervisory board approved holding the company's general meeting of shareholders on June 29, at which time parties will vote on approving the company's annual report and financial statements, including profit and distribution of dividends. Earlier in the week the executive committee proposed dividends of RUB 1.11 per share, which the supervisory board agreed to put to shareholder vote. Full year profit, without revaluation of financial investments, amounted to $810 million (RUB 25.2 billion) and the board recommended allocating $263 million (RUB 8.18 billion) for dividends. Russia requires companies whose shares are in federal ownership to allocate at least 25% of the profit to dividends.

The supervisory board also reduced ALROSA’s executive committee to 13 members, terminating Vassily Grabtsevich, Dmitry Voyan, Valery Kornilov, Mikhail Lopatinsky, Elena Timonina, Vladimir Tkachenko, Igor Uvarov and Rishat Yuzmukhametov. Alexander Matveev, the head of ALROSA’s legal department, was appointed to the committee.

eBay Proposes Exemption to Save Small Businesses

John Donahoe, the CEO of eBay, proposed an exemption for small business in the Internet sales tax bill, commonly known as the ''Marketplace Fairness Act,'' claiming in an op-ed piece for the Wall Street Journal that the weight of collecting sales taxes will overburden small firms that are trying to survive and expand online. He also said that well-heeled lobbyists who represent major retailers refuse to accept a compromise in support of small business. The National Retail Federation (NRF) and Jewelers of America (JA), to name two, both support the new sales tax bill.

The Internet tax scheme stems from a fight between big retailers and smaller brick-and-mortar stores who are eager to end tax-free shopping online in the U.S. Donahoe contends that the bill treats mom-and-pop businesses equal to corporate behemoths such as Macy's, Walmart and Amazon.com all of which have internal resources to collect taxes for 9,600 jurisdictions in the U.S.

He argued that, while its fair for a small business to collect local online sales taxes for their own jurisdiction, requiring them to collect taxes on behalf of all 50 states is not only difficult, if not impossible, but will force them to abandon the Internet sales channel. Auction site eBay is advocating that the bill include an exemption for businesses with fewer than 50 employees or with less than $10 million in annual out-of-state sales

RETAIL & WHOLESALE
Blue Diamond Sells for $10M

Bonhams London sold an extremely rare 5.30-carat, fancy deep-blue diamond for $9.5 million (GPB 6.2 million), or $1.8 million per carat, to Graff. The auction house stated that bidding on this gemstone came from around the world through 25 telephone lines as well as from those in the packed saleroom. The cushion-shape blue diamond is set horizontally with a mount pave-set with brilliant-cut diamonds and course of baguette-cut diamonds in a Trombino ring made by Bulgari, circa 1965. The ring had a high presale estimate of $2.3 million.

U.S. Chain-Store Sales +2%

U.S. chain-store sales rose 1.9% year on year for the week that ended on April 20, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. The week-to-week change in comparable-store sales reflected a slight increase of 0.8%. Sales were mixed with improved performance at grocery stores and discounters, but weaker business for electronics, office, apparel, department, drug and other specialty stores.

Tiffany Seeks Dismissal of Counterclaim

Attorneys for Tiffany & Co. filed a motion with the U.S. District Court to dismiss Costco Wholesale Corporation's counterclaim concluding that the ‘‘Tiffany setting'' is generic and unenforceable as a trademark. Costco isn't seeking to use a mark similar to ‘‘Tiffany,'' but it is asking the court to declare everyone is free to use the identical mark for certain jewelry products, according to the plaintiff's attorneys.

Tiffany & Co. argued that entertaining Costco's counterclaim sanctions counterfeiting of certain items even though the incontestable mark would remain for other products, even within the class subcategory of “jewelry.” Furthermore the court has no authority to invalidate an incontestable, fanciful trademark for use in just one product class.

While Tiffany has not specifically trademarked the term ''Tiffany setting,'' the trademarked word Tiffany identifies the company's product, which is an exclusive right, whether a noun or adjective. Tiffany & Co. sued Costco in February alleging the defendant knowingly and willfully violated its trademark by promoting and selling rings as ‘‘Tiffany,’’ when in fact the rings were not made by Tiffany & Co., according to both parties. Costco sought to have the case dismissed on the grounds that the ''Tiffany setting'' should be generic.

Ben Bridge Adds Collection to Ikuma Brand

Ben Bridge Jeweler unveiled a new bridal collection under its Ikuma brand, which was built upon the retailer's ethically sourced diamond marketing campaign. Ikuma diamonds originate from the Diavik diamond mine in Canada and where named after the Inuit word for fire. The American Gem Society (AGS) Laboratory certifies Ikuma diamonds for Ben Bridge. The retailer stated that Ikuma Canadian diamond engagement rings and wedding bands are designed to meet the needs of socially conscious brides and grooms.
The 'New Normal' Hits LVMH

Ultra-affluent consumers in the U.S., those in the top 2% of households, are trading down to less premium brands, according to research firm Unity Marketing. The trend took hold during the Great Recession and its remains firmly in place with affluent consumers to this day. Recent sales growth figures from LVMH, for example, further confirmed Unity's findings, and the consulting firm warned luxury goods makers not to be among those rudely awakened to the ''new normal'' as revenue growth slows.

The core customers of luxury goods brands are looking to maximize their investment buying branded goods and yet too many retailers, including LVMH, aren't measuring up for true, lasting value, according to Unity. Simply promoting a storied brand name no longer works in the new normal, according to Unity's president, Pam Danziger.

''Luxury brands have to deliver important values to their affluent customers, who have the means to purchase across a wide range of choices,'' she said. Luxury goods makers must realize that while affluent shoppers have plenty of cash to spend, they aren't about to pay high prices for goods that don't measure up to their exacting standards for quality, workmanship, materials and design. Brands such as Louis Vuitton, which has grown ubiquitous lately, have gone ''off point'' with ultra-affluent customers by becoming too popular with the masses, Unity found.

Unity's most recent spending report tracked that ultra-affluents, the most important customer segment for high-end products, severely reduced purchases in 2012 for watches and jewelry, as well as clothing, fashion accessories and beauty products. These consumers have found substitutes with less premium brands and they are shopping more strategically to find bargains, according to the firm's research.

Univ. Honors Alex & Ani Execs

The University of Rhode Island will recognize the jewelry store owners of Alex and Ani, Giovanni Feroce, a 1991 graduate and the CEO, and company founder and creative director, Carolyn Rafaelian, with honorary Doctorate of Business degrees during commencement ceremonies in May. Feroce (pictured) is expected to present a commencement address as well for the university's 127th graduation ceremony. Feroce and Rafaelian join three other business leaders chosen by the university to receive honorary degrees for business acumen and for making a significant impact on the state's economy.

Lazare Kaplan Wins Appeal

The United States Court of Appeals for the Federal Circuit reversed and earlier court ruling that invalidated a summary judgment against plaintiff Lazare Kaplan International by defendants Photoscribe Technologies Inc. and the Gemological Institute of America (GIA) in a patent infringement case. The court remanded the suit to the District Court with instructions to assess patent infringement by the defendants and, if necessary, determine damages.

U.S. Approves Forevermark Diamond Institute Trademark

The U.S. Patent & Trademark Office (USPTO) issued the trademark ''Forevermark Diamond Institute'' to De Beers Centenary of Switzerland on April 23, with the registration number of 4324606. De Beers filed for the trademark on June 16, 2011. The description of the trademark includes the words Forevermark Diamond Institute inside an outer circle with two black dots adjacent the word Forevermark.

There is an inner circle within the outer circle and that inner circle contains the view of a diamond from above. The goods and services provided under this trademark cover scientific and technological developments through research and design in the fields of minerals and gems; industrial analysis and research services in the fields of minerals and gems; design and development of computer hardware and software all relating to the grading, identification, observation, measuring, testing, checking, analysis, inspection, inscription for the purpose of certifying diamonds, jewelry, precious and semi-precious stones.

Most Affluents to Hold Firm on Jewelry Spending

The American Affluence Research Center released its annual spring affluent household market tracking study, which measured the mood, online tools and spending habits of the wealthiest 10% of U.S. households that in total account for almost half of all consumer spending. The survey measured past purchases and future intentions of affluent households for 17 products, including jewelry, travel, furnishings, appliances, apparel and services such as dining, recreation and charities.

Overall in 2012, 16% of affluents purchased jewelry and/or watches. Of that amount, 42% of respondents intend to spend less on jewelry or watches, while 55% expect to spend the same as they have and 4% will spend more in the coming months. For those products that often compete with the purse for jewelry, the survey suggested a double-digit surge in vacation spending by affluent households in the next 12 months, an 18% jump for home furnishings, a 17% increase on major home appliances and 16% of affluents will increase spending on home computers.

The study also confirmed that only 38% of affluents bought jewelry through a computer and 62% made their purchase inside a store. No respondent purchased jewelry using a mobile device. Only the ''major home appliance'' category came in a distant second to consumers making purchases in a store, or 51%, while 39% bought the appliance online and 1% on a mobile device.

MINING

Gem Diamonds' Rough Sales Decline

Gem Diamonds reported that rough diamond sales fell 20% year on year to $46.7 million for the period January 1 to April 23. Revenue was in line with reduced expectations for rough grade and quality, according to the company's interim statement. The quantity of rough diamonds sold from its Letseng diamond mine dropped 2% to 29,205 carats, while the average price per carat from three tenders the company held fell 19% to $1,599. Production fell 33% year on year to 18,775 carats. During the period, 249.90 carats, valued at a rough market value of $7.8 million, were extracted for manufacturing through the company's diamond analysis and operations in Antwerp or through strategic partnerships.‎

Gemfields' Emerald Auction Nets $15M

Gemfields sold predominantly lower-quality rough emerald and beryl at an auction in Lusaka, Zambia this past week which was 82% sold by lot for a total of $15.2 million. The company offered 17.34 million carats, with 6.3 million carats selling at an average price of $2.42. The government has proposed that local resources be sold in the country and in local currency, which Gemfields has warned could have a negative impact on its auctions and it is working with the government to resolve the issue.

Ekati's Reserves Support Production Into 2019

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, reported that current reserves at its Ekati diamond mine in Canada's Northwest Territories would sustain mining into the year 2019, at least, according to its first round of estimates. The Ekati mine, in which the company recently acquired from BHP Billiton, has indicated mineral resources, inclusive of mineral reserves, estimated at 127.5 million carats.

However, inferred mineral reserves contain 19.1 million carats and more immediately, economically-viable probable mineral reserves contain 19.6 million carats. Mineral resource estimates cover stockpiles and the Koala, Fox, Misery, Pigeon, Sable, Jay and Lynx kimberlite pipes, while mineral reserves (those resources known to be economically feasible) refer to the company's Core Zone joint venture with all kimberlites except Sable, Jay and Lynx. The company noted, however, that it could in fact be able to incorporate Jay, specifically, and Lynx deep mineral resources into the life-of-mine plan once sufficient and additional technical work has been undertaken on those pipes.

ECONWATCH

Diamond Industry Stock Report

U.S. and European shares were all higher with Zale (+16%) and Richemont (+12%) leading the way. Indian shares were mixed but Su-Raj (+8%) performed best. Diamond mining shares gained this week except for Firestone (-18%) and Stellar (-2%). View the extended stock report.
Apr. 25 Apr. 18 Chng.
$1 = Euro 0.768 0.760 0.008
$1 = Rupee 54.10 54.02 0.1
$1 = Israel Shekel 3.60 3.63 -0.03
$1 = Rand 9.09 9.19 -0.10
$1 = Canadian Dollar 1.02 1.03 -0.01

Precious Metals
Gold $1,465.00 $1,388.00 $77.00
Platinum $1,463.00 $1,424.00 $39.00

Stock Indexes Chng.
BSE 19,406.85 19,016.46 390.39 2.1%
Dow Jones 14,700.80 14,539.29 161.51 1.1%
FTSE 6,442.59 6,243.67 198.92 3.2%
Hang Seng 22,401.24 21,512.52 888.72 4.1%
S&P 500 1,585.17 1,541.70 43.47 2.8%
Yahoo! Jewelry 1,197.73 1,161.24 36.49 3.1%
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