rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Falling rupee fails to take the shine off diamonds

Falling rupee fails to take the shine off diamonds

July 08, 2013 07:55 IST

Falling rupee fails to take the shine off diamonds

     Next

Next
Karen Rebelo


The relentless fall of the Indian rupee has not dampened demand for rough diamonds in India, by far the world's largest processor of the stones, the chief executive of miner Petra Diamonds Ltd said in an interview.

The rupee fell to a record low of 60.76 to the dollar recently and is down about 11 per cent since the start of May.

Click NEXT to read more...


Image: An employee of Sotheby's auctioneers displays the Beau Sancy diamond in Zurich, Switzerland. The historic 34.98 carat modified pear double rose cut diamond, which has an estimate of $2-4million, goes on auction in Geneva.
Photographs: Arnd Wiegmann/Reuters

     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

"We haven't seen any effect ...," said Petra Chief Executive Johan Dippenaar. "Indian companies are still strong buyers, but I don't want to for one moment say 'no' it will certainly have no effect."

Petra Diamonds has been holding an auction in Johannesburg this week, its last of the financial year. "We have not noticed an impact (from the weak rupee) on the number of Indian clients attending," company spokeswoman Cathy Malins said in an email.

Click NEXT to read more...


Image: 'Summer Storm', a white gold necklace with four pear-shaped and six round diamonds valued at $750,000, in Antwerp, Belgium.
Photographs: Francois Lenoir/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

Petra Diamonds, whose customers are primarily in India, the United States and China, gets most of its production from five mines that it bought from Anglo American's De Beers unit, the world's biggest diamond producer by value.

India imported 31 million carats of rough diamonds in April-May, up about 26 per cent from the same period in 2012, according to data from the Gems and Jewellery Export Promotion Council, an Indian trade body.

Click NEXT to read more...


Image: An emerald and diamond pendant and necklace by Bvlgari priced between $2.5 million to $3.5 million, which was a gift from Richard Burton to Elizabeth Taylor, on display in New York City.
Photographs: Mike Segar/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

India processes more than 90 per cent of the world's diamonds, most of which are exported. Petra Diamonds, which has seven producing mines in South Africa and one in Tanzania, is also sensitive to the movement of the South African rand, which hit a four-year low against the dollar in June.

Click NEXT to read more...


Image: 'The Mike Tood', an antique diamond tiara which belonged to the late actress Elizabeth Taylor, in Hong Kong.
Photographs: Tyrone Siu/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

Like the rupee, the rand is getting hit by both local economic factors and demand for dollars as the US economy recovers, arousing talk that the US Federal Reserve will soon start to wind down its stimulus programme.

Dippenaar said the weaker rand was good for earnings but would add to costs in the longer run.

Click NEXT to read more...


Image: A Bonhams employee poses with the Bvlgari crossover ring set with 3.72 carat fancy vivid blue diamond and 3.93 carat diamond at Bonhams auction house in London.
Photographs: Luke MacGregor/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

"Materials that we use are based on an international price, like explosives and diesel; that's all linked to oil price. (The weak rand) obviously drives up those costs so it's a bit of a double-edged sword," he said.

However, Dippenaar said he was more concerned about markets over-reacting to last week's comments by the Fed, which hinted that it would begin slowing the pace of its bond-buying stimulus later this year.

Click NEXT to read more...


Image: A shop assistant shows a bracelet from Brazilian designer Mauricio Monteiro, containing a selection of large pink sapphires, pearls and diamonds, at the Iguatemi mall in Sao Paulo, Brazil.
Photographs: Nacho Doce/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

"When you see the type of reaction that we've seen in the market it obviously creates concern that people's confidence and mood will be somewhat subdued," he said.

"But we haven't made any sale since those announcements so we will monitor what happens in the market."

Click NEXT to read more...


Image: Cases containing uncut diamonds at De Beers headquarters in London.
Photographs: Stefan Wermuth/Reuters
Tags:

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

Diamond prices have languished over the past few years, mainly due to sluggish demand in developed markets. Producers are hoping for sales to pick up as disposable incomes rise in populous nations like China and India.

"We remain confident that in the medium term, and especially in the medium to longer term, our market should remain robust because of the supply to market," Dippenaar said.

Click NEXT to read more...


Image: Diamond jewellery in Milan, Italy.
Photographs: Paolo Bona/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

"Effectively no new ore bodies have been found, so it all points to one thing: tight supply to the market." The supply of diamonds in the world remains constrained as no major deposits have been discovered in 20 years despite billions of dollars spent on exploration.

Click NEXT to read more...


Image: A diamond Cartier bracelet from 1935 formerly belonging to the Duchess of Windsor is displayed at Sotheby's in London.
Photographs: Suzanne Plunkett/Reuters
Tags:

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     Next
Prev

Next

Petra Diamonds, which produced 2.2 million carats in fiscal 2012 ended June 30, plans to more than double production to five million carats by fiscal 2019. De Beers produced 27.9 million carats in 2012 and has said it expects about the same this year.

Dippenaar said the company's cash flow would grow significantly by fiscal 2016 as its mines go deeper, giving it access to higher grades.

Click NEXT to read more...


Image: A vivid green diamond ring together with a fancy pink diamond ring and a fancy intense blue brilliant-cut diamond ring are displayed at Sotheby's auction house in London.
Photographs: Kieran Doherty/Reuters

Prev     Next

Falling rupee fails to take the shine off diamonds

Prev     More
Prev

More

Petra Diamonds' shares were down 0.53 per cent at 113 pence on the London Stock Exchange on Friday afternoon. The stock has traded between 96 pence and 133.9 pence over the past year.


Image: A 40-carat diamond bangle from the 1860s is displayed at Bentley and Skinner jewellers in London.
Photographs: Suzanne Plunkett/Reuters

Prev     More
Source:
© Copyright 2014 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.