S’pore ex­change of­fer­ing di­a­monds as in­vest­ment haven

New Straits Times - - Business -

SIN­GA­PORE: When it comes to havens, in­vestors usu­ally think of gold or Trea­suries. Now an ex­change in Sin­ga­pore is start­ing to trade a credit card-sized pack­age of di­a­monds for those seek­ing a shel­ter from global risks.

While bul­lion trades in stan­dard weights and pu­ri­ties, di­a­monds vary ac­cord­ing to cut, clar­ity, colour and carat, mak­ing them gen­er­ally harder to buy and sell as an in­vest­ment. To solve this, the Sin­ga­pore Di­a­mond In­vest­ment Ex­change is list­ing a prod­uct called Di­a­mond Bul­lion, or sets of in­vest­ment-grade pol­ished gems, in de­nom­i­na­tions of about US$100,000 and US$200,000 (RM421,950 and RM843,900) each.

“Un­til now, there was no way peo­ple could in­vest in di­a­monds in the form which is equiv­a­lent to in­vest­ing in gold,” said Alain Van­den­borre, ex­ec­u­tive chair­man and founder of the ex­change. “A di­a­mond has ab­so­lutely zero cor­re­la­tion with any other as­set class, whether it’s com­modi­ties, bonds, eq­ui­ties. It’s a store of wealth, it’s a hedge against volatil­ity and you need that in your port­fo­lio.”

The prod­ucts are is­sued by the Sin­ga­pore Di­a­mond Mint Co.

The gems were sourced from the whole­sale market through De Beers sighthold­ers and Al­rosa PJSC, and must be in the top five lev­els of colour and clar­ity, said Van­den­borre in an in­ter­view, here, re­cently.

The ex­change planned to list other de­nom­i­na­tions in fu­ture, and the in­ter­est they at­tract could boost trad­ing vol­umes and global prices, he said.

The prod­ucts were fun­gi­ble and trade­able, with real-time pric­ing avail­able from the ex­change web­site or the mint’s mo­bile app, said the bourse.

Still, di­a­monds are down more than 30 per cent from a 2011 high, data from Pol­ishedPrices.com show, as the Chi­nese market soft­ens and young con­sumers spend more on smart­phones and gad­gets. Gold has lost a sim­i­lar amount from its peak that year as stock mar­kets climbed and the global econ­omy re­cov­ered.

The bourse, which says it’s the world’s only elec­tronic ex­change for trad­ing in­vest­ment-grade di­a­monds, has dealt about US$165 mil­lion of the gem­stones since start­ing in May last year. Bloomberg

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.