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Rapaport Weekly Market Comment

January 5, 2017

Jan 5, 2017 11:00 AM   By Rapaport News
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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.

Fancies: Fancy-shape demand improving with shortages of fine-quality, large Pears and Ovals. Cushions making strong comeback. Emeralds better than Princesses. Some demand for big diamonds, but buyers extremely picky. U.S. demand steady, Far East weak. Large price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.

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. Shortage in diamond supply expected as trade looks to restock. Market confidence remains high with strong stock market progress following Trump election.

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. European retail stocks slide in opening days of year as U.K. clothing retailer Next predicts spending squeeze and warns on profit.

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. 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 fairly high expectations.

Hong Kong: Market slow with many traders still on vacation. Retail sentiment weak as November jewelry sales fall following decline in tourist arrivals. Local currency pegged to strong U.S. dollar, making Hong Kong expensive for visitors. Signs of possible improvement in December and better expectations for Chinese New Year.
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