RAPAPORT... Consumer Sentiment Reaches New Low
A Reuters/University of Michigan monthly survey of consumer confidence in the U.S. economy posted its lowest level in 28 years, declining to 59.5 for the month of May from 62.6 in April. Short-term inflation expectations rivaled those of the early 1980s at 5.2 percent, down from 4.8 percent inApril. Five-year inflation expectations were at their highest since August 1996, rising to 6.5 percent compared with 3.2 percent in April, while one-year inflation expectations jumped to 5.2 percent due to consumers’ concerns about the rising costs of food and fuel. On a more positive note, applications for new building permits rose 4.9 percent, the first increase in five months and the largest since a 6.7 percent spike in December 2006. Single-family home building, however, decreased from a rate of 704,000 units to 692,000, the lowest rate since January 1991.
Most Tax Rebates to Pay Down DebtThe federal tax rebate check, which ranges anywhere from $300 to $1,200, depending on household income and number of children, will mostly go towards paying down debt, according to the International Council of Shopping Centers (ICSC). A recent survey shows 51 percent of consumers receiving a rebate intend to use it to pay off debt. The figure increased from 46 percent in February. Moreover, 61.5 percent of households with income of $50,000 or less earmarked their rebates for debt reduction. Consumers who say they will spend the check now total 21.9 percent, a 4 percent drop from surveys in February.
India’s Gem and Jewelry Exports GrowIndia experienced a 22 percent increase in total gem and jewelry exports to $21 billion for fiscal 2007-2008, which runs from April through March, according to the Gem & Jewellery Export Promotion Council (GJEPC). The gem and jewelry sector accounted for 13 percent of the country’s total merchandise exports, with polished exports rising 30 percent to $14.2 billion. Hong Kong was the largest importer, receiving 35 percent of India’s exports, followed by the U.S. at 24 percent. Gold jewelry exports rose 8 percent to $5.6 billion.
In April, India’s polished diamond exports rose to $1.2 billion, up 62 percent from the same period a year earlier. The country imported $993.5 million worth of rough, up 23 percent from April 2007.
Israel’s Polished Exports FallIsrael’s polished exports decreased 17 percent to $376.3 million in April, the Ministry of Industry, Trade and Labor reported. In volume, polished exports shrank 11 percent to 249,823.27 carats. Shmuel Mordechai, the nation’s diamond controller, attributed the decline to BaselWorld 2008 falling a week earlier than the prior year, resulting in one less week of exports for the show. Polished imports rose 28 percent to $48.6 million, while March and April figures combined show that polished exports remained flat at around $972 million between the two years. The country’s rough imports in April grew 17 percent to $360.5 million, and rough exports increased 19 percent to $269.5 million.
For the year to date, Israel’s polished exports grew 8 percent to $2.5 billion, while polished imports rose 15 percent to $1.5 billion. Rough imports increased 14 percent to $1.7 billion, and rough exports jumped by 27 percent to $1.4 billion during the first four months of the year. So far this year, Israel’s exports to the U.S., its biggest market for polished diamonds, have dropped 17 percent to $1 billion.
Dubai Diamond Trade Thrives
The Dubai Diamond Exchange (DDE) reported that Dubai’s rough diamond trade increased 32 percent to $1.5 billion in the first quarter of 2008, boosted by a rise in both exports and imports. Rough exports from Dubai grew 39 percent to $915 million during the three months, with sales to China showing the largest increase of 671 percent to $87.3 million. Rough exports to Europe surged 50 percent to $458.2 million, while exports to India grew 19 percent to $226.8 million. Dubai’s rough exports to South Africa rose by 75 percent and by 32 percent to the U.S. Rough imports to Dubai from January through March increased 23 percent to $611.5 million.
The DDE relaunched its rough diamond tenders in May, and reported that it sold 96 percent of its goods, with companies from Dubai, Antwerp, New York, Mumbai and Israel participating. A total of 28,000 carats were sold for an undisclosed amount. The next tender is scheduled to take place from June 8 to 10, 2008.
Japan’s U.S. Imports DownJapan’s polished diamond imports from the U.S. dropped 85 percent in March to 838,000, compared to the same period last year, according to figures compiled by the J Club from the Ministry of Finance. Overall polished imports fell 13 percent to $75.3 million. Japan imported a total of 173,718 carats of polished during the month, representing a decrease of 10 percent from March 2007. Imports from India fell 21 percent to $26.5 million and Israel shrank 22 percent to nearly $10 million. Japan’s polished imports from Belgium grew 30 percent to $19 million in March, while buying from China, Thailand and Netherlands also increased significantly. For the year to date, polished imports fell 10 percent to $215 million, with imports from the U.S. decreasing 53 percent and imports from Belgium increasing 25 percent.
Belarus’ Rough Imports SoarBelarus’ rough diamond imports rose 120 percent to $7.7 million in the first quarter of 2008, compared with the first three months of 2007, Interfax reported. An unnamed Finance Ministry official stated that the country brought in 24,422.52 carats of rough in the three months, representing a 46 percent increase from the 2007 period. Rough exports grew 130 percent in the quarter to 1,210.9 carats worth approximately $19,000. Belarus’s main diamond trading partners were Belgium, Israel and the U.S.
Collectors Universe Jewelry Revenue UpCollectors Universe Inc., the parent company of Gem Certification and Assurance Lab (GCAL) and American Gemological Laboratories (AGL), reported that its third-quarter revenues fell 2 percent to $10.9 million. However, jewelry revenues grew 30 percent, driven by colored gemstone grading and reduced investment in marketing programs. The company reported a net loss of $966,000 for the three months ended March 31, 2008, compared with a net profit of $31,000 one year ago. The company’s early stage diamond and colored gemstone grading businesses incurred higher direct costs as the company built grading capacity in support of anticipated revenue increases. Year-to-date revenues rose 6 percent to $31.7 million. Collectors Universe reported a net loss of $2.5 million for the first three quarters of the year, compared with profits of $325,000 for the for the same period in 2007.
Suashish Profits JumpSuashish Diamonds’ profits rose 35 percent to $1.2 million (INR 50.3 million) for its final fiscal quarter of 2007, ended March 31, 2008. Total income increased 8 percent to $59.7 million (INR 2.5 billion). For the fifteen months ended March 31, 2008, Suashish posted a net profit of $19.7 million (INR 820.5 million), while revenues were $293.6 million (INR 12.2 billion). The firm’s total expenditures were $277.2 million (INR 11.5 billion). Diluted earnings per share stood at $9.71 (INR 39.53) for the fifteen-month period, compared with $5.12 (INR 20.86) for the twelve months ended December 31, 2006.
Article from the Rapaport Magazine - June 2008. To subscribe click here.