Diamond Investment and Consumerism on the Rise in Asian Market
12/14/2011 6:41:57 AM Shira
Diamond investment and consumerism is on the rise in the Asian Market, with China’s emerging market as one of the largest sectors in diamond transactions
Wealthy Asian consumers, primarily in China, are the new target market for the Diamond Industry, in both the Consumer and Investment sectors.
Wealthy Chinese investors are buying gemstones in higher number. According to industry analysis, wealthy Asians, particularly from China, are especially interested in rare, pink diamonds. Their investments are driving up the prices of the Australian pink diamonds, the rarest of pink diamonds. According to Gemdax consultants, pink diamond prices increased by more than 50% between 2000-2010.
Diamonds are gaining headway as an alternative investment category (to gold). Many sectors of the diamond industry are suffering rough diamond shortages, and rough diamond prices have continued to rise in value.
Brides to be in China and India are receiving diamond rings in record number. According to De Beers estimates, about 40% of Chinese brides, in the country’s largest cities, receive a diamond engagement ring. According to DeBeers, demand for diamonds in China increased 25% in 2010, and 31% in India. According to a report by the magazine What's On Xiamen, buyers from China and Hong Kong spent $737 million on gems from Antwerp during the first quarter of 2010.
The Antwerp World Diamond Center (AWDC) and the Industrial Commercial Bank of China (ICBC) recently made a deal. According to the deal, the bank will provide financial services to the Belgian diamond industry, mainly for diamond trading and products. This is expected to fuel its growth of the Belgian diamond industry, to give Belgian diamond professionals access to the burgeoning Chinese market, and help the Industrial Commercial Bank of China enter the diamond financing business.
The diamond market is very strong and overall demand by jewelry retailers was up by about 15% for the first quarter of 2011, according to Stephen Lussier, chief executive of the diamond brand Forevermark.
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“Over the past decade cross-asset correlations have nearly doubled (but) diamonds have exhibited very low correlations to other assets making them an attractive source of diversification They have almost no correlation to anything else – commodities gold equity markets” said David Riedel President of equity research firm Riedel Research Group
Experts claim that both loose diamonds and diamond rings work as investments
China and India are currently the top consumers of gold in the world The rising middle class in these countries and a growing population of young people is expected to considerably drive up the global demand for diamonds Sotheby's recent “Magnificent Jewels” sale in Hong Kong illustrated booming interest in diamonds in Asia The auction highlight was the sale of a 801-carat blue diamond ring for $127 million
“We expect cultural trends throughout emerging markets to drive demand for diamonds further A major trend increasing demand among the Chinese is a desire to display wealth” said Riedel
Some critics claim however that diamond investment is more suited toward industry professionals or those with expert diamond knowledge Investment in large high-grade diamonds are primarily the realm of wealthy international investors seeking alternative investments that are not correlated to the securities markets and not for individuals without prior diamond knowledge cite critics
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Diamond Investment and Consumerism on the Rise in Asian Market Wednesday, Dec 14 2011 6:41AM Diamond news agency,
Shira
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Diamond Investment and Consumerism on the Rise in Asian Market Diamond investment and consumerism is on the rise in the Asian Market with China’s emerging market as one of the largest sectors in diamond transactions
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