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Rapaport TradeWire January 5, 2017
Jan 5, 2017 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
January 5, 2017
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U.S. holiday sales mixed with
traditional retailers losing out to online. Diamond trading quiet with many
centers on vacation and India still feeling effects of demonetization. Thirty
pointers improve but larger sizes decline in 2016, RAPI for 0.30ct. +0.5%,
0.50ct. -1.4%, 1ct. -5%, 3ct. -8.5%. Chinese outlook optimistic. Hong Kong uncertain
with Nov. jewelry, watch and luxury sales -14% to $732M. Titan Company reports
positive 3Q with Tanishq Diwali sales +40%. Israel 2016 polished exports -6% to
$4.7 billion, rough imports +17% to $3.2B.
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| Diamonds |
1,221,562 |
| Value |
$7,537,053,532 |
| Carats |
1,323,793 |
| Average Discount |
-29.99% |
www.rapnet.com
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| The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network. |
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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
The Millennials are very hard to deal with. They come in, and I give them a lesson on diamonds, and then they go online where they don’t have to pay sales tax.
Paul Geiss, owner of Paulo Geiss Jewelers in Charleston, South Carolina.
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MARKETS
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United
States: Holiday reports mixed with overall demand flat
to slightly down. Last-minute pickup in sales improved the verdict for season
as a whole…
Belgium: Diamond bourses closed for holidays, re-opening
Jan. 9. Traders report mixed holiday sales with U.S. and European demand okay
but Far East weak…
Israel:
Sentiment improved in December following
agreement with Tax Authority but trading quiet as companies focus on adapting
to new law…
India: Sentiment weak. Holiday sales to U.S. slower
than usual with estimates of small decline. Steady demand for 0.30-1.50 ct.,
VS1-SI2, RapSpec A3 diamonds but D-F, IF weaker…
Hong
Kong: Market slow with many traders still on vacation.
Retail sentiment weak as November jewelry sales fall following decline in
tourist arrivals…
Click here for deeper analysis |
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RAPAPORT STATEMENT
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Diamond Prices Decline Amid India Liquidity Crisis
Polished diamond prices softened in December as Indian
liquidity dried up due to the government’s demonetization policy eliminating
500 and 1,000 rupee notes. Trading slowed with dealers taking vacation during
the holiday period. The RapNet Diamond Index (RAPI™) for 1-carat, RapSpec
A3+ diamonds fell 1.3% in December. Sentiment improved despite the slowdown as
U.S. consumer confidence rose, but other markets remain cautious with Chinese
tourist spending restrained.
Purchase the full Rapaport Monthly Report – January 2017
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INDUSTRY
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India Focuses on Fighting Fraud
India has beefed up its diamond disciplinary capabilities
to put a stop to bankrupt traders setting up new companies to escape debts and
curb other fraudulent activities. The industry’s new Trade Disciplinary
Committee will have more power to target scams than India’s existing diamond
trade organizations, according to Sanjay Kothari, the convener of the new
panel. It will also have increased ability to ban members from Mumbai’s Bharat
Diamond Bourse (BDB). |
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India Close to Introducing Diamond Futures
The Indian Commodity Exchange (ICEX) is set to launch
trading of diamond futures, helping the industry hedge against wild
fluctuations in polished prices. Investors will be able to choose from three
different monthly contracts for diamonds weighing 0.30-0.49 carats, 0.50-0.69
carats and 1-1.09 carats. The move is expected to introduce a new pool of
buyers and help minimize diamond companies’ losses when prices fall, ICEX said.
Final approval from the Securities and Exchange Board of
India is expected in the coming weeks. |
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Diamond Shares Sparkle in Bullish 2016
Jewelry and diamond mining stocks gained in 2016, riding
the wave of strengthened financial markets as the Dow Jones Industrial Average
leapt 13% for the year. Diamond miners were lifted by stronger sales and new
mines coming onstream, while online retailer Blue Nile’s shares gained
following a surprise private-equity takeover in November. Hong Kong jewelers
such as Chow Tai Fook outperformed the Hang Seng Index, but Indian industry
stocks fell as the government’s demonetization policy damaged liquidity.
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Israel's Diamond Trade Slows in 2016
Israel’s polished diamond exports dropped 6.4% to $4.68
billion in 2016, the nation’s Ministry of Economy and Industry reported.
Polished imports fell 6% to $3.28 billion, leaving net polished exports 8%
lower at $1.39 billion. Trading activity slowed for most of 2016 but sentiment
improved toward the end of the year, said Shmuel Mordechai, Israel’s diamond
controller. Rough imports rose 17% to $3.25 billion, while rough exports jumped
23% to $2.7 billion.
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RETAIL & WHOLESALE
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Tourism Lull Hits Hong Kong Jewelry Sales
Hong Kong retail sales of jewelry, watches, clocks and
valuable gifts slid 14% to $731.6 million (HKD 5.67 billion) in November,
according to provisional data from the Census and Statistics Department. The
slump came alongside a decline in tourism, with the Hong Kong Tourism Board
reporting visitor numbers fell 2% the same month. Overall retail sales
slipped 5.5%, dragged down by lower tourist spending on select big-ticket
items, a government spokesperson explained.
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India’s Titan Weathers Demonetization Storm
Titan Company’s jewelry sales rose in the third fiscal
quarter even as India’s demonetization policy weakened consumer demand. The
Mumbai-based retailer’s revenue increased “reasonably” in the three months to
December, with its flagship Tanishq brand growing about 15%, Titan said. The
Diwali festive season was one of Titan’s best on record, with Tanishq sales
soaring 40% over the 30-day period, the company said.
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Google to Introduce New Smartwatches
Google will launch two new smartwatches in the first quarter
as part of a larger effort to market wearables to consumers, The Verge reported.
The flagship devices will use Google’s new Android Wear 2.0 operating system,
Jeff Chang, product manager of Android Wear at Google, was cited as saying. The
branding of the new timepieces will be linked to the manufacturer, rather than
Google, the report claimed, without identifying the watchmaker.
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Thieves Nab Jewelry in New Year’s Heist
Three men stole about $6 million of jewelry from a New
York wholesaler on New Year’s Eve while mass celebrations took place just a few
blocks away at Times Square. Surveillance footage showed the trio entering KGK
Holdings at 70 West 36th Street at 10 p.m. using a pry-bar and hammer,
according to a report to the New York City Police Department. They stole
jewelry from safes and left using a sixth-floor stairwell, with no injuries
reported.
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MINING
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Merlin Magics Up Australia’s Fifth-Largest Diamond
Merlin Diamonds recovered a 35.26-carat brown diamond at
its mine in Australia, the fifth-largest diamond in the country’s
history. The miner also extracted a 14.6-carat brown diamond and a number of
smaller white diamonds, it reported. The discoveries follow the company finding
the “first” blue diamond at the Merlin mine in December, although the stone only
weighed 0.124 carats. The mine is the source of Australia’s largest
diamond, a 104.73-carat white stone. |
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Israel Scoops 80ct. Diamond for Annual Fair
ALROSA will auction an 80.59-carat polished diamond in
Israel next month, with the stone headlining the company’s sale of special-size
rough and polished goods. The miner will offer the ‘Star of Viluysk’ diamond as
the centerpiece of its tender at the sixth International Diamond Week in Israel
from February 13 to 16. ALROSA will also auction 108 boxes of rough diamonds
ranging from 11 carats to 199 carats, as well as white and fancy-color polished
diamonds starting at 10 carats.
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GENERAL
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Signature IIJS to Run Alongside WFDB Meet
The Signature IIJS jewelry show will take place in Mumbai
from February 6 to 9, coinciding with the World Federation of Diamond Bourses
(WFDB) presidents’ meeting. The 10th edition of Signature IIJS will be held at
the Bombay Exhibition Centre in Goregaon, a suburb of Mumbai. More than 550
exhibitors and 13,000 visitors are expected to attend, India’s Gem &
Jewellery Export Promotion Council (GJEPC) said. |
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GIA Seeking Diamond Researchers
The Gemological Institute of America (GIA) is calling on
qualified researchers to apply for full-time academic research in mineralogy,
geology, physics, materials science and other fields related to
gemology. The Richard T. Liddicoat Postdoctoral Research Fellowships at
the GIA’s California and New York campuses are targeting early-career
scientists to conduct creative, independent, publishable research. |
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India’s IDCA Names 2017 Board
The Indian Diamond & Colorstone Association (IDCA)
re-elected Ashok Sancheti of Pioneer Gems as its president for 2017. Voters
also backed Rakesh Barmecha of Niru NY to continue as vice president. Prateek
Nigam of Oriental Gemco NY was chosen as the new secretary, while Rajeev Pandya
of Ashi LLC was elected treasurer and Neeraj Rawat of Rawat Gems was voted in
as joint secretary. The executives join a further eight directors on the IDCA’s
board for this year.
Images: thetaxhaven, Sam Valadi |
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ECONWATCH
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Diamond Industry Stock Report
Indian share prices gained as investors sought bargains following demonetization's downward effect on the market. Jewelry manufacturer Goldiam International (+26%) led industry stocks, while Titan Company (+11%) gained on positive sales figures. Miners and U.S. retailers were mixed, while Far East shares rose, headed by Luk Fook (+5.2%). European retail stocks dipped amid concerns about consumer spending levels.
View the detailed industry stock report
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Jan 5, 2017 (13:41 GMT) |
Dec 29, 2016 (12:24 GMT) |
Chng. |
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| $1 = Euro |
0.95 |
0.96 |
-0.01 |
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| $1 = Rupee |
67.89 |
68.02 |
-0.12 |
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| $1 = Israel Shekel |
3.85 |
3.84 |
0.01 |
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| $1 = Rand |
13.62 |
13.65 |
-0.03 |
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| $1 = Canadian Dollar |
1.33 |
1.35 |
-0.02 |
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| Precious Metals |
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Chng. |
| Gold |
$1,173.83 |
$1,145.90 |
$27.93 |
2.4% |
| Platinum |
$958.20 |
$899.10 |
$59.10 |
6.6% |
| Silver |
$16.57 |
$16.08 |
$0.49 |
3.0% |
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| Stock Indexes |
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Chng. |
| BSE |
26,878.24 |
26,366.15 |
512.09 |
1.9% |
| Dow Jones |
19,942.16 |
19,833.68 |
108.48 |
0.5% |
| FTSE |
7,200.59 |
7,101.91 |
98.68 |
1.4% |
| Hang Seng |
22,456.69 |
21,790.91 |
665.78 |
3.1% |
| S&P 500 |
2,270.75 |
2,249.92 |
20.83 |
0.9% |
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INDIA MARKET REPORT
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Polished Trading Activity
Sentiment weak. Holiday sales to U.S. slower
than usual with estimates of small decline. Steady demand for 0.30-1.50 ct.,
VS1-SI2, RapSpec A3 diamonds but D-F, IF weaker. Trade shifting focus to
exports as demonetization liquidity squeeze hurts domestic demand. Prospects
for Chinese New Year (Jan. 28) okay as traders make decent sales ahead of
festival. Dealers starting to look to Hong Kong show (Feb. 28-Mar. 6) with
fairlyhigh
expectations.
Read the Polished Diamond Trading Report |
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