De Beers gem sale big­gest in a year

The Star Early Edition - - COMPANIES - Thomas Biesheuvel

DE BEERS had its big­gest di­a­mond sale in at least a year as the gem in­dus­try re­stocked after the key hol­i­day pe­riod.

The com­pany, owned by An­glo Amer­i­can, sold $720 mil­lion (R9.74 bil­lion) of di­a­monds in its first sale of the year, com­pared with $545m at last year’s Jan­uary of­fer­ing, it said yes­ter­day.

The world’s big­gest di­a­mond pro­ducer said it saw “good de­mand” across most di­a­mond cat­e­gories, while there was a larg­erthan-usual gap be­tween this and its pre­vi­ous sale.

The large amount may help boost con­fi­dence that de­mand is con­tin­u­ing to re­bound after a slump in 2015.

It’s also a sign that trade buy­ers in In­dia, who han­dle as much as 90 per­cent of the world’s rough di­a­monds, are re­cov­er­ing from wide-rang­ing cur­rency re­forms in Novem­ber.

De Beers’s first sale of the year, which gives traders a chance to re­plen­ish stocks fol­low­ing the cru­cial hol­i­day pe­riod, fol­lowed its small­est of­fer­ing of 2016 in De­cem­ber. The firm’s big­gest sale last year was $666m in April.

The large amount may help boost con­fi­dence that de­mand is con­tin­u­ing to re­bound after a slump in 2015.

An­glo Amer­i­can shares climbed as much as 4.7 per­cent to near the high­est in more than two years and was up 4.3 per­cent by 8.42am in London.

Al­rosa PJSC, the sec­ond-big­gest pro­ducer, gained as much as 4.6 per­cent in Moscow.

De Beers of­fered con­ces­sions to buy­ers in re­cent sales to sup­port the mar­ket in the wake of In­dian Prime Min­is­ter Naren­dra Modi’s fight against so-called black money. The low­est end of the mar­ket has been hit hard­est as more cut­ters and pol­ish­ers of cheap stones use cash to fund their busi­nesses.

De Beers cau­tioned yes­ter­day that this part of the in­dus­try was still be­ing af­fected.

“While the re­open­ing of some di­a­mond pol­ish­ing op­er­a­tions in In­dia saw some­thing of an in­crease in de­mand for smaller, lower qual­ity rough di­a­monds, we main­tain a cau­tious out­look for these cat­e­gories as the In­dian in­dus­try con­tin­ues to ad­just to the post-de­mon­eti­sa­tion en­vi­ron­ment,” De Beers said.

The com­pany sells its di­a­monds at 10 sales a year, known as sights, in Botswana’s cap­i­tal Gaborone.

It in­vites about 80 cus­tomers, known as sighthold­ers, who buy the di­a­monds at prices set by De Beers.

The com­pany started pub­lish­ing its sales fig­ures in Jan­uary last year. – Bloomberg

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