|
|
Brexit Impact
Statement by Martin Rapaport
Jun 27, 2016 6:49 AM
By Martin Rapaport
|
|
|
RAPAPORT... PRESS RELEASE, June 27, 2016, New York … Brexit
will not have a sustainable negative impact on polished diamond demand. The EU
has not been a dominant diamond consumption center for many years. While a
negative wealth effect due to declining currencies and equity markets will
reduce EU and British commercial demand, global investment demand for higher quality diamonds as a
store of value will increase due to global economic and political uncertainty.
Chinese
and Indian diamond demand is not likely to decline due to Brexit and is
sustainable at current low levels.
The
important U.S. market will remain healthy and retain growth. We do not expect
any significant medium to long term negative impact on the U.S. diamond market.
While demand may benefit as a stronger dollar increases purchasing power, a
short term decline in equity prices and wealth may reduce demand during the
quiet summer months. Overall
we expect a positive U.S. Holiday season this December.
Brexit
will intensify the pressure banks are putting on the diamond trade. Liquidity
will continue to be reduced. While Brexit is not expected to significantly
reduce overall polished demand it will indirectly impact trade liquidity resulting
in price volatility. It is vital that rough diamond producers maintain price
levels that ensure profitability and liquidity in the manufacturing sector
during these uncertain times. Furthermore, producers must increase their
marketing spend to ensure generic diamond engagement ring demand from U.S.
millennial consumers.
|
|
|
|
|
|
|
|
|
|
Tags:
Brexit, Europe, European Union, Martin Rapaport, u.k., u.s.
|
|
|
|
|
|
|
|
|
|
|