translating astro's post on google:
Even more than the gold sector, which is strongly correlated, the diamond depends to 95% of the luxury industry industrial applications using the majority of diamond synthesis.
Diamonds are forever ...
You may be wondering why focus on a sector synonymous with opulence at a time of global slowdown announced. There are several arguments for this.
First, demand from emerging markets. The three-year bull rally that we have experienced have generated a wealth and an abundance of liquidity unprecedented.
The Forbes ranking of billionaires shows again this year, they are still more numerous. The demand for this product luxury is not about to disappear: they are the middle classes who face its economic downturn, not the nouveaux riches whose fortune is already made.
A global market growth of 5% per annum
To draw the stakes, know that according to 2005 figures, the diamond market for sale (jewelry) was estimated at 64 billion dollars annually.
China was the 4th World buyer, with 1.25 billion dollars a year. But his demand will triple by 2010! Without you talk about India ... nor Russia, nor the Middle East.
Traditionally, the U.S. alone accounted for half the global demand for jewellery. The sector has been impacted by the difficulties of subprime but today the situation has changed. According to the CEO of De Beers, the No. 1 World Diamond Council, demand from emerging markets is already able to compensate, the excess, the decline in U.S. demand.
The global market for diamond jewellery should grow at least 5% each year!
The diamond, the neo-billionaires love ...
It is a rare jewel, marking a sign of wealth, a safe investment (more than gold), a refuge against inflation ... and a "safe" little cumbersome.
The financial world looks to turn on the "magic stone". A sign that does not deceive: Several projects are under way to build a derivatives market on the diamond.
En route to the diamond peak?
It must be said that, along with a constant increase in demand, supply is under pressure. We find this fundamental mechanisms of a market for raw materials. The world reserves of natural pure carbon are limited; resources dwindle.
According to analysts, major diamond mines could find their peak over the next twenty years. This is the case in South Africa, the 5th largest producer by volume, and 2nd in value, which compresses its mining production.
Of course, the alternative offered by the synthetic diamond removes almost any utility natural diamond ... but its exchange value is unbeatable and attracts investors.
Four countries are 80% of production
The diamond has always clear charrié echoes opaque: power, corruption, trafficking ... and cartels. Today, four countries share nearly 80% of world production in Russia, Botswana, Australia and China. In value terms, is Botswana, Russia, Canada, Angola and South Africa who are in the lead.
Three groups alone account for three quarters of this production: the South African giant De Beers (half of world production in value terms), the Russian Alrosa (state company, of course) and Anglo - Australian Rio Tinto. To say that these three major players have some control on prices would be an understatement.
Between the extraction and casket, the price is multiplied by five!
At the output of mines, the market weighs in the 13 billion dollar annual ... For 64 billion in jewelry sales. Between the extraction and casket, the price will be nearly five times the tumbled! Note however that the price of rough diamonds is increasing much faster than that of diamond carved ...
But time is of major cartels moving
Smaller competitors settled. And producing countries, anxious to renationalise their resources, impose constraints always the strongest operators.
It's time to take advantage
The diamond market is therefore being driven to operate its greater transparency, competitiveness ... and volatility. This fragmentation also means more risk ...
In short, things are moving in the hushed world of white stone: and it's time probably to take advantage. Rather than you look at Anglo-American, the No. 1 worldwide who owns the company De Beers, I recommend you turn to one of these new entrants, a pure player in the sector ...
Sib Almaz is a joint venture between Alrosa and Krystall (valued at $ 50M).
Alrosa provides raw diamonds, Krystall deals with polishing and Sib Almaz diffuse the finished product in the USA.
For the moment the action Sib Almaz is not available on the market, it has yet purchased Global Diamond Exchange (Company unknown, but with a valuable export license from Russia to the USA).
The takeover was delayed (until January 2008) because of an internal investigation by the SEC for some ex-employees and shareholders of Global Diamond Exchange.
Alrosa also asked to Krystall to wait a few months to refine its strategy of disseminating the USA.
Why not sell under the label or Krystall Alrosa?
The two companies have preferred to organize this joint venture to expand the brand to a little more "scramble cards" to face his ex-partner De Beers.
The inauguration of the first store is planned for early September in the heart of NY.
So if you have the appetite for risk, shares GBDX.PK are available for $ 0,001!!
A meditate .....
