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Sparkling sentiment

SENTIMENT in the world diamond market is high and augurs well for WA producers.

A constrained market at the end of last year and exceptionally strong Christmas retail sales resulted in the year starting on a high note, according to Diamond Industry Review issued by South African diamond analyst Hilton Ashton for stockbroker BOE Securities (Pty) Limited.

He said that US retailers reported growth of 13 per cent to 15 per cent in diamond retail sales.

“Luxury goods supplier Richemont recently reported that third quarter sales, which included the Christmas season, were up by 28 per cent,” he said.

Diamond sales rose 44 per cent in the Far East, 33 per cent in the Americas and 16 per cent in Europe.

“The year started on an exceptionally high note with the first sight estimated at US$580 million,” Mr Ashton said.

“This comprises the third highest sight ever, after one in 1994 and another sight in 1997.

“There is a shortage of cheaper goods and middle range stocks are low. Industry players describe a prevailing euphoric mood.

“Premiums on boxes were good. This always leaves both manufacturers and dealers happy.”

De Beers managing director Gary Ralfe said sales at 1999 sights nine and ten were constrained to ensure pent up demand as 2000 ensued.

“Certainly, that objective was achieved,” he added.

Another measure of market strength can be gleaned from net polished exports from Israel. These rose 50 per cent in the three month period to December 1999 on a year-on-year basis.

Exports by region show that, in terms of volume, the US was by far the leading consumer of Israeli gross polished exports, absorbing 66 per cent.

However, there was a significant recovery in sales to Hong Kong where exports from Israel rose 16 per cent. Hong Kong acts as a conduit for sales to other East Asian countries.

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