RAPAPORT... Donald Trump’s policies as U.S. president are expected to boost
diamond sales as the trickle-down effect of lower taxes will support luxury
demand, according to De Beers chief executive officer Bruce Cleaver.
“It’s likely to be positive, certainly in the short-term –
lower taxes, more jobs, translates into more disposable income and translates
into more diamond purchases,” Bloomberg cited Cleaver as saying in an
interview.
Even without this potential boon, Cleaver said diamond
jewelry sales are likely to increase “a little bit” next year after being flat
or slightly lower in 2016, partly a consequence of the U.S. dollar’s strength,
Cleaver told Bloomberg.
In the longer term, the industry will be supported by the
prospect of growth in demand outperforming expansion in diamond supply by 2018
or 2019, as there is no sign of supply being anything other than flat, the
executive said.
But, even as deregulation supports U.S. business, the effect
of Trump’s policies may make commodities more expensive overseas as the dollar
strengthens. Consolidation is therefore likely in the polished
manufacturing and retail sectors of the diamond business, Cleaver added.
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