Rapaport TradeWire 7/4/2008
Rapaport TradeWire - Friday, July 4, 2008
-----------------------------------------
News: Trading markets slow as summer vacation season begins. U.S.
retail sales weak. Associated Press poll finds 90% of U.S. consumers
vow to cut personal expenses due to record oil prices ($143/barrel).
Russia’s ALROSA holds ‘closed door’ strategic summit to develop global
diamond marketing initiative. Dubai 1Q polished imports +61% to $1.5
bil. and polished exports +78% to $1.2 bil. India’s Gitanjali 4Q sales
+23% to $191 mil., profits +252% to $11 mil. China’s LJ Int'l 2007
sales +23% to $152 mil., profits -72% to $1.5 mil. Signet secures $520
mil. credit facility. Leviev opens Moscow store. Columbian gangs steal
$5 mil. from U.S. diamond dealers. Sylvain Ringer long-time NY DDC
leader passes away.
=============
ANNOUNCEMENTS:
-------------
=========================
RAPAPORT TENDERS IN INDIA
=========================
Polished Diamond Tender – By Appointment Only
July 13–17, 2008
Over 3200 carats, Rounds and Fancies, 0.01 up to 2.00 carats
D-M, VS-I3, Large selection of promotional qualities, Over 150 Lots
For Contact Manisha@diamonds.net or 91-22-6637-6633
===========================================
Rapaport will be exhibiting at the following shows:
JA New York July 27-30;
India Int’l Jewellery Show Aug. 7-11;
Singapore, Aug. 21-24; London, Aug. 31 to Sept.3
To view all events and details
http://www.diamonds.net/Events/default.aspx
==========================================
Rapaport International Diamond Conference
Sept. 8, 2008, New York, Waldorf Astoria Hotel
“2010, The Next Decade - Preparing For The Future”
Register via email: conference@Diamonds.Net
==========================================
============
RETAIL QUOTE:
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"We have seen a drop in sales for less expensive jewelry [under
$36,000] in the United States but our long-standing well-heeled
customers do not seem to be affected by the (recession.) Jewelry above
$140,000 is flying off the shelves. The crisis has been going on for
more than eight months but we are only now starting to feel the
difference and mainly in the United States."
---Maria Cristina Buccellati at Buccellati of Milan
==========
WORLD NEWS:
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---DTC to Raise Prices at July Sight
Diamond Trading Company (DTC) will raise prices on certain goods at
its next sight, which is scheduled to take place beginning July 7,
2008. The company did not say how much it planned to raise prices or
which goods would be affected.
---Damas Raises $270M in IPO
Jewelry retailer Damas fetched $270.6 million during its IPO on
Wednesday. The Damas group operates in 18 countries, with 438 stores
around the world, and has an extensive retail network with stores
primarily located in the Middle East, South Asia, Europe and North
Africa.
---India: Workers Protest After Some Manufacturers Fail to Honor Wage
Agreement
Hundreds of cutters and polishers in Surat took to streets and threw
stones at diamond factories after they did not receive promised wage
increases. The Diamond Association of Surat and workers mutually
decided upon a 20 percent increase in salaries, but some diamond
factories in the city refused to implement the decision.
---Izhakoff: Industry Must Not Lose Sight of Efforts
Eli Izhakoff, chairman of the World Diamond Council (WDC) called upon
the industry to continue fighting the trade in conflict diamonds.
Izhakoff said that although the trade in conflict diamonds has ceased
almost entirely, the industry cannot afford to reduce its ongoing
effort and must commit to improve the livelihoods of the people
residing in all areas in which the industry is active.
---Jovella Reflects Positive Mood in Israeli Jewelry Sector
The 2008 Jovella International Jewelry Exhibition showcased Israel’s
jewelry industry which has recently seen a steady rise in exports. The
country’s jewelry exports rose 5 percent to $410 million in 2007, and
organizers said interest in Jovella had increased as a result. Itzhak
Bendor, managing director of the Israel Jewelry Manufacturers
Association, a main sponsor of the event, said that while previous
shows had focused upon increasing international buyers, exhibitors
were turning to the local markets to hedge unstable foreign markets
this year.
---$1M in Diamonds Stolen from Traveling Dealers in Three Days
Two diamond dealers working on calls in Arkansas and Tennessee lost $1
million in goods to thieves during hold-ups one week ago. One dealer
from Los Angeles was hit in a shopping center parking lot at a Pine
Bluff, Arkansas, mall and a dealer from New York was hit in a hotel
parking lot in Nashville.
The Federal Bureau of Investigations has determined that South
American gangs from Colombia, Ecuador, and Peru are known to stake-out
traveling dealers as they make tempting targets. Efforts are underway
to see if these robberies are gang-related. Similar robberies since
April in Miami and Houston have totaled more than $4 million in dealer
losses.
---Rapaport News Broadcast
Extensive coverage of Israel's Jovella 2008 from Tel Aviv as we catch
up with Itzhak Bendor, managing director of the Israel Jewelry
Manufacturers Assoc; Asher Yasdi, CEO of Diamonds Forever LTD; and
Moshe Sinai, vice president of Illimitee by Ovadia Diamonds. Gold
posted a strong gain this week, but will second half bring "election
luck" to the U.S. economy and push the metal off recent highs?
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=22173
=============
DIAMOND STATS:
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---Israel June Imports/Exports (YTD= year to date)
Jun.08 %Chng YTD 08 %Chng
($Mil) ‘07 ($Mil) ‘07
Polished Exports $235 -29.6% $3,796 5.9%
Polished Imports $471 34.2% $2,345 19.4%
Net Polished $(236) N/A $1,451 -10.6%
Rough Imports $585 19.9% $2,775 15.1%
Rough Exports $442 29.8% $2,190 25.8%
Net Rough $142 -2.9% $585 -12.5%
Diamond Account $(378) N/A $866 -9.2%
---Japan’s Polished Diamond Imports -3% to $67M in May
Japan’s polished diamond imports fell 3.3 percent to $67 million in
May 2008. For the year to date, Japan’s polished imports fell 10
percent to $347.95 million.
---Dubai's Polished Diamond Trade +68% in 1Q08
Dubai’s polished diamond trade grew 68 percent to $2.7 billion in the
first quarter of 2008 boosted by a significant rise in its dealings
with India. Dubai’s polished diamond imports rose 61 percent to $1.48
billion in the three months ending March 31, 2008. Polished exports
rose 73 percent to $1.22 billion.
=======================
RETAIL & WHOLESALE NEWS:
-----------------------
---Gitanjali Gems 4Q Profits +252%, Sales +23%
Gitanjali Gems profits more than tripled in its fourth fiscal quarter
boosted primarily by stronger sales during the period. Net profits
grew 252 percent to INR 483.17 million ($11.14 million) during the
three months ending March 31, 2008. Net sales rose 23 percent to INR
8.27 billion ($190.57 million,) and expenses increased 20 percent to
INR 7.77 billion ($179.23 million.) For the full fiscal year 2007-08,
Gitanjali net profits rose 69 percent to INR 1.38 billion ($31.84
million.) Net sales increased 20 percent to INR 26.54 billion ($611.74
million.) The company spent 18 percent more on expenses at INR 24.85
billion ($573.1 million) during the year ending March 31, 2008, and
operating profits rose 41 percent to INR 1.38 billion ($31.84
million.)
---Man Sang FY08 Sales +59%, Profits +43%
Man Sang Holdings Inc. net sales for fiscal year 2008 rose 59 percent
to HKD633.7 million ($81.2 million,) which included HKD405.4 million
from pearl operations and HKD228.3 million in real estate sales.
Profits rose 43 percent to HKD39.9 million ($5.1 million) for the
fiscal year ending March 31, 2008.
---LJ Int'l FY Profits -72% as Retail Expansion Adds Costs
Hong Kong-based LJ International profits fell 72 percent to $1.5
million in 2007 as the company focused on positioning itself in the
Chinese retail marketplace. The stronger retail presence helped
increase total revenues by 23 percent to $152 million in 2007. Retail
sales grew 127 percent to $34.3 million for the year, while its
wholesale unit saw an 8 percent rise in sales to $117.7 million.
LJI reported that sales in China rose 83 percent, while in North
America grew 5 percent, and in Europe and other countries by 33
percent. Sales in Japan fell 10 percent.
---Seiko Files $500K Complaint Against Whitehall
Seiko Watch Corporation seeks the immediate payment of $500,000 for
watches sent to Whitehall Jewelers in June. In a 17-page suit filed
with U.S. Bankruptcy court against Whitehall, Seiko took great
exception with the jeweler for having withheld its financial condition
from the watchmaker before merchandise was ordered and sent.
---Leviev Diamonds Denies Firing Two Striking Workers
Lev Leviev Diamonds (LLD) polishing factory in Windhoek dismissed
allegations by the Mineworkers Union of Namibia (MUN) that it fired
two workers, and that the current strike against the company has legal
merit. LLD managing director Kombadayedu Kapwanga said no workers were
dismissed. LLD contends that strike is beyond the scope provided by
the Labor Act. LLD claims the union representative washed his hands of
meeting with management.
Some 251 workers, out of 401 employees at LLD Diamonds, are reportedly
being protected by employer due to threats against crossing picket
lines. LLD set-up camp for those workers to stay on the premises.
---K&G Creations Sues Charles & Colvard for $50M
Jewelry manufacturer K&G Creations counter sued moissanite creator and
supplier Charles & Colvard for $50 million in a list of accusations
including fraud, breach of contract, and unfair competition. K&G
claims that Charles & Colvard ruined K&G's reputation and forced the
company out of the moissanite business. Charles & Colvard had sued K&G
for $2.8 million earlier for debts owed.
===========
WHO’S NEWS:
-----------
---Banda: Sylvain Ringer was an Inspirational Leader for All of Us
New York Diamond Dealers Club president Jacob Banda announced with
great sadness the passing of the Club’s beloved secretary Sylvain
Ringer. Ringer was a leader of the New York Diamond Dealers Club for
more than 20 years, and was very involved in key positions in the
diamond community in Belgium. Ringer was hailed as an outstanding
diamantaire. His activities extended to numerous programs on behalf of
members ranging from his leadership in planning and implementing
programs for the development of business, playing vital roles in such
celebrations as the Dealers Club's 75th Anniversary event and the
World Diamond Congress held in New York in 2004.
---Jeweler, Customer Shot Dead
Grand Haven Jewelry owner Robert Karell and a 77-year-old store
customer, Louis Paparella, were shot dead in the Michigan-resort town
store Wednesday.
Grand Haven police said the double slaying has not resulted in
arrests, and they were not sure what merchandise was stolen.
===================
DIAMOND MINING NEWS:
-------------------
---Gem Diamonds Yields $11M at Letseng Rough Tender
Gem Diamonds sold 10 diamonds from its Letseng mine in Lesotho for a
total $10.97 million at its most recent tender in Antwerp. The
diamonds, recovered from Letseng in early June, weighed a total 261.4
carats and sold for an average $42,000 per carat and ranged in size
from 11.8 to 70.7 carats, and in color from D through F.
---DiamondCorp Nets $1M at Lace tailings Tenders in 1H08
DiamondCorp sold 19,214 carats of diamonds for $1.16 million, or $61
per carat, on tender from its Lace tailings re-treatment plant in
South Africa during the first six months of 2008.
---Vaaldiam Acquisition Doubles Production from Duas Barras Mine
Vaaldiam Resources Ltd. entered into an agreement to acquire RST
Recursos Minerais Ltda. --owner of the producing Peçanha diamond
mine-- and provides a second diamond recovery plant and new mining
fleet. The acquisition will double Duas Barras area production for
Vaalidam. Under the terms of the acquisition, Vaaldiam will acquire
RST for a cash payment of $9 million and the issuance of common shares
of Vaaldiam in the amount of $1.5 million.
---BHP Gains Partial U.S. Antitrust Approval for Rio Tinto Merger
Attempt
BHP Billiton received partial approval for its takeover bid of mining
rival Rio Tinto from United States antitrust authorities. The U.S.
Department of Justice and the Federal Trade Commission have granted
early termination of the Hart-Scott-Rodino waiting period for the
proposed acquisition and the Antitrust Division of the DoJ has
concluded its review without further action. BHP is offering 3.4 of
its shares for each share in Rio Tinto in a deal valued at
approximately $170 billion. Rio Tinto’s board has consistently
rejected the offer as being undervalued.
---De Beers South Africa Unit Eyes Firm on Profitability
The De Beers Group has positioned itself away from controlling diamond
supply towards focusing on profitability, a move which is expected to
be reflected for the first time towards the end of 2008 through 2009.
By then, the company would have completed the hand over of its
“non-profitable assets.” Most of the assets sold off in the group’s
restructure, including the Cullinan, Koffiefontein and Kimberley
Underground operations, were from its South Africa portfolio, and
while the company says production will likely stay the same for now,
you can expect to see a more efficient operation with a long term game
plan.
---Rio Tinto Freezes Investment in Zimbabwe Diamond Mine
Rio Tinto will not invest further in its Murowa mine in Zimbabwe until
the country’s political climate improves. The company does not have
plans to divest from the country.
==========
ECON WATCH:
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For week ending July 3, 2008
Econ Watch:
Jul 3 Jun 26 Chng.
$1 = Euro 0.637 0.630 0.007
$1 = Rupee 43.3 42.5 0.8
$1 = Israel Shekel 3.27 3.36 -0.09
$1 = Rand 7.75 7.97 -0.22
$1 = Canadian Dollar 1.02 1.01 0.01
Jul 3 Jun 26 Chng.
Precious Metals
Gold $933.90 $916.60 $17.30
Platinum $2,016.00 $2,053.00 -$37.00
Jul 3 Jun 26 Chng. Chng.%
Stock Indexes
BSE 13,094.11 14,421.82 -1,327.71 -9.21%
Dow Jones Avg. 11,288.54 11,453.42 -164.88 -1.44%
FTSE 5,476.60 5,518.20 -41.60 -0.75%
Hang Seng 21,242.78 22,455.67 -1,212.89 -5.40%
S & P 500 1,262.90 1,283.15 -20.25 -1.58%
Yahoo! Jewelry Index 868.61 918.88 -50.27 -5.47%
Jul 3 Jun 26 Chng. Chng.%
USA
Abazias $0.52 $0.52 $0.00 0.00%
Birks & Mayors $3.00 $3.20 -$0.20 -6.25%
Blue Nile $40.42 $46.04 -$5.62 -12.21%
Charles & Colvard $0.95 $1.10 -$0.15 -13.64%
Collector's Univ. $7.74 $8.81 -$1.07 -12.20%
DGSE Companies, Inc. $2.71 $3.20 -$0.49 -15.31%
Finlay $0.41 $0.42 -$0.01 -2.38%
Fuqi International $8.54 $9.94 -$1.40 -14.08%
JCPenney $36.69 $35.98 $0.71 1.97%
Kohl's $42.52 $40.53 $1.99 4.91%
Lazare Kaplan $8.50 $9.00 -$0.50 -5.56%
LJ International $2.27 $3.26 -$0.99 -30.37%
Macy's $18.50 $19.48 -$0.98 -5.03%
Man Sang $5.96 $7.04 -$1.08 -15.34%
Movado Group $18.97 $20.03 -$1.06 -5.29%
Nordstrom $30.72 $31.64 -$0.92 -2.91%
Saks $9.77 $11.51 -$1.74 -15.12%
Signet $9.63 $10.00 -$0.37 -3.70%
Sotheby's $24.35 $27.51 -$3.16 -11.49%
Tiffany $40.32 $42.19 -$1.87 -4.43%
Wal-Mart $56.60 $56.84 -$0.24 -0.42%
Zale $18.05 $20.13 -$2.08 -10.33%
Jul 3 Jun 26 Chng. Chng.%
EUROPE
Bulgari €6.40 €6.62 -€0.22 -3.32%
Citizen Holdings €4.70 €4.79 -€0.09 -1.88%
Esa €12.81 €14.08 -€1.27 -9.02%
Golay-Buchel CHF 2,480.00 CHF 2,490.00 -CHF 10.00 -0.40%
LVMH €66.82 €66.13 €0.69 1.04%
Pinault P-R SA €66.54 €72.22 -€5.68 -7.86%
Richemont SA CHF 55.10 CHF 56.75 -CHF 1.65 -2.91%
Sakha Diamonds €0.61 €0.62 -€0.01 -2.26%
Swatch Group CHF 235.50 CHF 255.75 -CHF 20.25 -7.92%
Theo Fennell (pence) 31.00 43.00 -€12.00 -27.91%
Jul 3 Jun 26 Chng. Chng.%
HONG KONG
Hang HKD 1.91 HKD 1.93 -HKD 0.02 -1.04%
King Fook HKD 0.72 HKD 0.74 -HKD 0.02 -2.70%
Noble Jewelry HKD 1.23 HKD 1.25 -HKD 0.02 -1.60%
Tse Sui Luen HKD 0.84 HKD 0.84 HKD 0.00 0.00%
Jul 3 Jun 26 Chng. Chng.%
INDIA (rupee)
Classic Diamond 41.30 51.45 -10.15 -19.73%
Gitanjali Gems 233.85 266.35 -32.50 -12.20%
Rajesh Exports 51.85 68.90 -17.05 -24.75%
Reliance 2,071.10 2,239.24 -168.14 -7.51%
Su-Raj Diamonds 59.95 67.05 -7.10 -10.59%
Titan 1,035.35 1,051.15 -15.80 -1.50%
Zodiac JRD 21.40 26.50 -5.10 -19.25%
Shantivijay Jewels 119.00 126.25 -7.25 -5.74%
Shukra Jewellery 3.70 4.09 -0.39 -9.54%
Suashish Diamonds 357.80 411.70 -53.90 -13.09%
Jul 3 Jun 26 Chng. Chng.%
NEW ZEALAND
Michael Hill NZD 0.75 NZD 0.81 -NZD 0.06 -7.41%
SINGAPORE
Gems TV Holdings SGD 0.120 SGD 0.140 -SGD 0.020 -14.29%
Sarin Technologies SGD 0.380 SGD 0.380 SGD 0.000 0.00%
TEL AVIV
Tobias Jewellery ILS 551.70 ILS 515.40 ILS 36.30 7.04%
MINING STOCKS
(pence unless noted)
Jul 3 Jun 26 Chng. Chng.%
USA
Anglo American $32.37 $32.85 -$0.48 -1.46%
CANADA
Archangel CAD 1.15 CAD 1.40 -CAD 0.25 -17.86%
Harry Winston CAD 27.89 CAD 29.00 -CAD 1.11 -3.83%
Mountain Province CAD 4.70 CAD 4.25 CAD 0.45 10.59%
Peregrine Diamonds CAD 0.22 CAD 0.22 CAD 0.00 0.00%
Rockwell Diamonds CAD 0.40 CAD 0.44 -CAD 0.04 -9.09%
Shore Gold CAD 2.46 CAD 2.70 -CAD 0.24 -8.89%
Stornoway Diamond CAD 0.29 CAD 0.32 -CAD 0.03 -9.38%
Tahera Diamond CAD 0.04 CAD 0.04 -CAD 0.01 -12.50%
True North Gems CAD 0.37 CAD 0.37 CAD 0.00 0.00%
UK (pence)
African Diamonds 76.0 78.4 -2.4 -3.06%
BHP Billiton 1,749.0 1,808.0 -59.0 -3.26%
Firestone Diamonds 120.0 157.0 -37.0 -23.57%
Gem Diamonds 959.0 1,055.0 -96.0 -9.10%
Mano River 10.3 11.0 -0.8 -6.82%
Mwana Africa 37.5 40.5 -3.0 -7.41%
Namakwa Diamonds 140.0 143.0 -3.0 -2.10%
Petra Diamonds 100.4 106.0 -5.6 -5.31%
Rio Tinto plc 5,460.00 5,701.00 -241.0 -4.23%
===================
INDIA MARKET REPORT:
-------------------
---Polished: Activity in the local polished market took a deeper dip
on account of financial worries out of the U.S.
-1 point: Very good demand: +$225 whites.
Good demand: $80-$160 whites.
Fair demand: $150-$250 TTLC.
-2 point: Good demand: +$300 whites.
Fair demand: $200-$250 whites;
$125-$150 TTLB & $125-$300 TTLC.
2-7 point: Good demand: +$250 whites.
Fair demand: $100-$150 TTLB & $125-$300 TTLC.
8-18 point: Good demand: +$500 whites.
Fair demand: $150-$200 TTLB & $200-$300 TTLC.
20 points: Good demand: +$650 whites.
Fair demand: $200-$400 whites.
25 points: Good demand: +$700 whites.
Fair demand: $200-$450 whites.
33 points: Good Demand: $1400-$1600 whites.
Fair Demand: $150-$500 whites.
50 points: Good demand: +$2000 & $1000-$1,500 whites
Fair demand: $700-$800 & $300-$500 whites.
75 points: Very good demand: +$3,000 whites.
Good demand: $700-$900 whites.
1 carat+: Very good demand: +$5,000 whites.
Good demand: $1,500-$4,500 whites.
Fair demand: $500-$1000 whites.
Princess: -3 point: Fair demand: $200-$250 & $325-&375 whites.
+3 point: Fair demand: $$250-$300 & $350-$400 whites.
+9-18 point: Good demand: +14 pts $600-$650 whites
Fair demand: $225-$275 & $300-$400 whites.
20 point: Fair demand: $350-$400 whites & $750-$800 whites.
25 point: Fair demand: $350-$400 whites.
50 point: Fair demand: $600-$1,000 whites.
75 point: Fair demand: $1,200-$1,400 whites.
1 carat+: Good demand: +$1,500 whites.
Marquise: -6 point: Very good demand: $400-$550 whites.
Good demand: $250-$350 whites.
+7-18 point: Very good demand: $500-$650 & +14-point $850-
$900 whites.
Good demand: $225-$300 & +14-point $300-$350
whites.
20 point: Good demand: $675-$725 & $950-$1000 whites.
Fair demand: $325-$375 whites.
25 point: Good demand: $1,000-$1,100 whites.
Fair demand: $400-$450 whites.
33 point: Good demand: $1,200-$1,400 whites.
50 point: Good demand: $1,600-$1,800 whites.
75 point: Good demand: $1,100-$1,400 & $2,600-$3,000 whites.
1 carat+: Very Good demand: +$1,200 whites.
Tapers & Baguettes:
Good demand: $550-$800 +5mm whites. $225-$300
2mm-2.5mm whites; $300-$350, 2.5mm-3mm whites;
$350-$450 3mm-4mm, $500-$600 4mm –
5mm & $175-$250 +2mm-3mm whites.
--- ROUGH: Activity remains very slow due to very high rough asking
price. Liquidity crunch in the local market and financial failures
in the U.S. adds to the situation.
1-5 point: Very good movement: $75-$140 makeables; $85-$180 crystals.
Good movement: $25-$65 makeables.
Good movement: $50-$90 OW TTLB & TTLC;
Fair movement: $5-$20 OW TTLB & TTLC.
6-20 point: Good demand: $130-210 crystals; $120-$160 makeables.
Fair demand: $40-$140 makeables; $60-$80 clivage;
$50-$100 makeables; Very good movement $80-$180;
Fair demand $60-$120 fancy shapes;
$60-$110 OW TTLC & TTLB rounds.
21-50 point: Good demand: $235-280 makeables; $160-$340 crystals.
Fair demand: $110-$220 rounds; $100-$150 crystals; $70-
$130 clivage; Very good movement $140-$220 and
Fair demand $75-$100 fancy shapes; Good demand $70-$150
Fair demand $20-$50 OW TTLC & TTLB.
0.51-1.00 carat: Good demand: $80-$125 & $130-$325 makeables;
$125-$250 & $300-$450 crystals.
Fair demand: $70-$100 clivage; Very good demand $225-
$325 and Fair demand $70-$125 fancy shapes;
Good demand $140-$180 & Fair demand $90-$125 OW TTLC
& TTLB.
1.01-2.00 carat: Fair demand: $225-$600 rounds; $225-$800 crystals;
$125-$170 clivage; $200-$400 all fancy shapes.
Good demand $170-$225 OW TTLC & TTLB.
2.01-3.00 carat: Good demand: $225-$1,500 makeables; $500-$1,000 OW
TTLC & TTLB & $350-$1,700 crystals.
Fair demand: $300-$400 clivage; $125-$400 flats &
$500-$1,000 fancy shapes.
5.00 carat+: Very good demand: $1,200+ makeables, crystals & all fancy
shapes till L color.
Mixed Lot: Good demand: $2-$50.
=======
CREDITS:
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Happy Fourth of July U.S.A.
This week’s TradeWire® has been brought
to you by Jeff Miller and Zach Helke of
the Rapaport News Team.
E-mail: news@diamonds.net
For up to the minute 24/7 news coverage visit www.Diamonds.net
And view our broadcasts at http://www.diamonds.net/news/
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