Art, Diamonds, Watches, Collectibles etc.

[millionairemind]

November 18, 2008

Diamonds no longer an investor’s best friend as recession removes sparkle
Catherine Boyle

Diamonds may be for ever, but their high price is not, as recession starts to hit even the richest. Gem Diamonds, the London-listed miner, said yesterday that it may make a loss this year because of a sharp fall in diamond prices over the past two months.

Shares in Gem plunged by 38 per cent to 213½p after the company said that it has had to stop some exploration activities in the Democratic Republic of Congo and that it may suspend output at an Indonesian mine. The average price per carat for a rough diamond from its mine has fallen this year from about $2,500 (£1,670) to about $1,400.

Meanwhile, leading players in the diamond industry, such as De Beers, which mines almost half the world’s diamonds, and Alrosa, the Russian mining group, gathered in Antwerp, the world’s diamond capital, to try to tackle falling prices.

Prices of polished diamonds have fallen by 10.8 per cent since August, according to the PolishedPrices.com diamond prices index. At the rough diamond end of the market, in which miners sell to diamondaires, industry-watchers are talking about even greater falls as people pay less for jewellery and diamondaires find it harder to borrow cash to buy gems.

With ABN Amro Diamond Bank, the diamond industry’s biggest creditor, in the hands of the Belgian Government after Fortis, its parent company, had to be bailed out, credit has dried up. If the $3 billion that ABN used to lend to the industry is no longer available, many of the smaller companies may suffer.

Des Kilalea, an RBC Capital Markets analyst, said that prices for the sort of stones that ordinary consumers might buy could fall by 30 to 40 per cent, with top-end jewels falling even more or being withheld from the market. “These stones are the equivalent of a Picasso or a Renoir – and if you own a Picasso you are not going to sell it at the moment,” Mr Kilalea said.

As the United States, which buys about 45 per cent of the world’s diamonds, teeters into recession, the industry is waiting to see how Christmas trading, which accounts for 40 per cent of its diamond sales, is affected.

The big players can try to control prices by reducing the amount of diamonds that they mine, but Mr Kilalea said that this would be more difficult to do than during the last long diamond price slump, in the 1980s, because competition regulations now were tougher.

Freddy Hannard, head of the Antwerp World Diamond Centre, said: “The market situation is unprecedented. We are in the midst of a global economic crisis. All of us have felt the pressure . . . no market, no liquidity, no demand and, worst of all, no confidence.”

Laurence Graff, chairman and founder of Graff Diamonds, which bought a 4.5 per cent stake in Gem this month, was more confident about the future of the market. The billionaire, who has a necklace called the Lesotho Promise on sale for $75 million, said: “Top-quality gems are rare, hard to find and polish. There will always be a demand for these high and top-quality diamonds, both to be worn and in which to invest. In the short term, their prices may fluctuate, but in the long term they retain their quality, unlike other commodities.”

Glen Turner, commercial director of Gem, was optimistic that in the medium to long term demand would become much greater than supply.

The sale of one huge diamond, such as the 478-carat giant that Gem Diamonds found in its Letseng mine this year, can greatly affect a company’s results for the quarter.

Sergei Vybornov, the president of Alrosa, said that the company may have to reduce production by up to 40 per cent to ease the glut of rough diamonds on the market.

David Abery, finance director of Petra Diamonds, said: “We are watching this thing develop and it’s changing on a daily basis.”

Charles Wyndham, of Polished-Prices.com, said: “The diamond industry is a passenger in the train smash that has occurred throughout the world’s financial markets and not some lucky ‘decoupled’ bystander. Everyone is going to be suffering to a greater or lesser extent. We are not at the worst part of the crash yet, which looks likely to come in the first quarter of 2009.”

Facet values

— About 20 per cent of mined diamonds are suitable for use in jewellery and are cut, polished, set and sold as jewellery

— Drilling diamonds are embedded in large steel drill bits that drill into rock for wells to find water, oil, and natural gas

— Gemstones are cut and polished using a mixture of oil and diamond powder

— Circular diamond-tipped saws are used in industry and construction

[winston]

Rolex appeal fades as recession blues hit Singapore

(Repeats to additional subscribers) By Melanie Lee SINGAPORE, Dec 16 (Reuters Life!) - Suffering from recession blues and looking to offload that new Rolex watch? Don't turn to us, say second-hand luxury stores in Singapore, who are being swamped with requests from people desperate to sell their luxury goods.

Traditionally resilient during times of economic downturn, more than 70 second hand shops in the city-state are feeling the chill of recession, as the appetite for expensive goods has fallen sharply despite big discounts.

"Rolex prices have been like a reliable currency in the past, but there are signs that even Rolex is hit by this recession wave," said Ngo Han, an avid watch collector.

"New Rolexes are selling at much lower prices than before and that has trickled down to the second-hand market," Ngo said.

Home to the highest density of millionaires in the world, Singapore is a wealth management centre and a shopping destination for the region's wealthy.

UNAFFORDABLE LUXURIES Second-hand stores that stock luxury goods, such as brand name bags and flatscreen televisions, experienced a boom in the past few years, as rising incomes and the need to upgrade to keep up with fast-changing fashions created a fertile secondary market for designer wares.

But with the city-state becoming the first Asian country to slip into recession this year, customers are changing their habits.

Where once they would have bought Rolexes or Patek Philippes that can cost over S$10,000, (about $6,775), they now opt for models that cost under S$5,000, (about $3,390), shop owners said.

"Business has gone down about 20 to 30 percent. The interest to buy watches is still there, but whether people can afford to buy is another thing," said Alvin Lye of Monster-Time.

His online store, http://www.monster-time.com, carries second hand watches from Breitling, Audemars Piguet, Cartier and Longines.

During lunch hour in Singapore's financial district, people fill up May Fong's second-hand luxury bag store, but few are buying, even with many of the bags going at a 50 percent discount.

"There is definitely a drop in business. People are more conscious (of their) spending, even if it's a bargain," Fong said.

TEMPORARY SETBACKS? Shops that rent, rather than sell, designer goods, are however reporting a spike in rentals despite the recession, suggesting some locals are still keen to get glamorous goods, albeit temporarily.

"New bags are leased out within seconds (of being) posted on the website," ex-policeman Tan Ho Ching, who rents out designer bags for about S$125 a week via his online store ttp://www.thatbagiwant.com, told local press on Sunday.

The recession's impact on workers whose salaries are commission-based, such as property agents, could be a likely explanation for the drop-off in sales.

"These people tend to earn much more during the boom times, and they are also likely to make up a significant portion of the consumers for these luxury goods," said Alvin Liew, an economist with Standard Chartered in Singapore.

However, some watch enthusiasts said they were holding onto their horological investments, keen to turn a profit once the recession lifts.

A recent Reuters poll said Singapore would be the worst performing emerging Asian economy next year, but would see a recovery together with the rest of the region in 2010 [ID:nHKG10473].

"Watches are better to keep and are better than cash in a recession. They won't drop in value, and after a recession, the value is still there or more," said collector Yeo on online watch forum http://www.swx.com.sg.

[millionairemind]

june 30, 2009
Downturn hits diamonds

ANTWERP (Belgium) - DIAMONDS may be forever but traders in Antwerp are hoping Europe's recession won't be as it is turning their businesses pear-shaped.

Dany Meylemans, boss of one of the diamond polishing companies in the Belgian city known as the diamond capital of the world has seen demand weaken since this time last year.

But the fall in demand worsened in the first four months of this year when imports of uncut diamonds to Antwerp, north of Brussels, plunged by 45 per cent and exports by 30 per cent.

For polished diamonds, those worked on by the Antwerp craftsmen, the figures are 32 per cent and 28 per cent down. Those kind of statistics reverberate throughout a city which handles 80 per cent of world trade in uncut diamonds.

The diamond traders, many instantly recognisable by the suitcases chained to their wrists, still ply their trade in a few streets in Antwerp's diamond quarter established in the 16th century.

There they operate cheek by jowl with the brokerages, banks and specialist bourses all under the unblinking gaze of security cameras.

At the Antwerp Diamond Bourse, which handles trade in polished diamonds, the tables are almost empty. In the big diamond certification laboratories many of the multi-faceted experts are also notable by their absence.

The sector has had to go cap in hand to the regional Flemish government seeking a 200-million-euro (S$405 million) guarantee.

However this figure is tiny compared to the annual trade of 42 billion dollars enjoyed by the diamond market, which 'is not in enormous danger", according to Freddy Hanard, president of the Antwerp World Diamond Centre (AWDC), the coordinating body for the town's diamond industry.

South African diamond mining giant De Beers cut production by 90 per cent in the first quarter of this year while the world's number two diamond producer, Russia's Alrosa, has sold nothing to Antwerp so far this year, a reflection of the slump in demand. -- AFP

[winston]

Am quite surprised with the above article. Wasn't there an article that says that China will also save the diamond industry ?

If you have been to Oriental Plaza ( Dong Fang Xin Tiandi ) in BJ, you would have noticed two huge stores there, that are selling diamonds. And it's always quite crowded with people too...

People now want a diamond ring when they get married in China, especially in the first tier cities ..

[winston]

China world’s fastest growing diamond market By Justine Lau in Hong Kong

The growing appeal of diamonds to Chinese customers is set to help the country overtake Japan as the world’s second largest market by sales this year amid falling demand in most developed economies, says Freddy Hanard, chief executive officer of the Antwerp World Diamond Centre.

He expects diamond sales in China, which reported double-digit growth in the first six months of this year, to continue to expand in the second half, and they could double next year.

http://www.ft.com/cms/s/0/9ba61da4-a6b6 ... ck_check=1

[winston]

Chinese Collectors Set to Boost $100 Million Hong Kong Auction

Oct. 2 (Bloomberg) -- Collectors may spend a combined HK$780 million ($100 million) at Hong Kong’s first major art sale since the one-year anniversary of the collapse of Lehman Brothers Holdings Inc., said Sotheby’s, as accelerating economic growth in China spurs demand.

http://www.bloomberg.com/apps/news?pid= ... roUqSEdok8

[winston]

Imperial Throne Fetches Record $11.1 Million at Hong Kong Sale By Le-Min Lim

Oct. 8 (Bloomberg) -- A Qing Dynasty imperial throne with carved dragons fetched a record HK$85.8 million ($11.1 million) at a Hong Kong auction, confirming a Chinese-led resurgence of Asia’s fine-art and antiques market.

At the standing-room-only sale attended by the biggest names in the multibillion-dollar Chinese antiques business, such as top collector Robert Chang and the Chak family of dealers, some 10 bidders offered more than $2 million each for the throne. One contender placed a HK$10 million bid and the jostling carried on at incremental rates of between HK$1 million and HK$5 million. The final bid, which was seen to be made by the posse of Chinese stock-investor Liu Yiqian, is a record for Chinese furniture.

Host Sotheby’s Asia Chief Executive Kevin Ching wouldn’t confirm Liu’s identity as buyer. Liu declined to comment.

“He got it at a bargain,” said Kevin Li, a Taiwanese antiques dealer, in an interview at the venue. “That item is so rare, it will easily resell for HK$200 million in a few years.”

Sotheby’s buyers’ commission is 25 percent of the hammer price for the first HK$400,000; 20 percent for an amount between HK$400,001 and HK$8 million; and 12 percent for any amount above that.

http://www.bloomberg.com/apps/news?pid= ... mEMn_QdvgU

[kennynah]

sorry hor...to me...the Qings are not Chinese

别认贼做父。。。

[winston]

Diamond demand takes off

China last year overtook Japan to become the world's second largest diamond market behind the United States, with trade on the Shanghai diamond exchange rising 16.4 percent to more than US$1.5 billion (HK$11.7 billion).

Xinhua News Agency said yesterday the year-on-year rise, when much of the rest of the world was mired in deep recession, was due to China's boisterous economic growth in 2009, which reached 8.7 percent.

"As the economy continued to develop in a stable manner, consumer demand for jewelry continued to grow, especially for diamonds for the wedding market," Xinhua said on its website.

Demand for diamonds only really started to develop in the 1990s when De Beers brought its global advertising campaign to China, tapping into the desire for conspicuous consumption and pursuit of Western lifestyle trends.


Source: REUTERS

[winston]

How to Save Thousands in the Art Market by Alexander Green

As a young man, I spent the summer of 1985 working at The Old Course Golf & Country Club in St. Andrews, Scotland.

Situated right next to the 17th hole - the notorious "road hole" where so many British Open championships have been won or lost - the club has a beautiful view of the Old Course, the storied Royal & Ancient clubhouse behind the first tee, and the North Sea beyond.

I still look back on that time with a sort of dreaminess. Living overseas was a great experience. I learned so much and made so many new friends. I still consider that one of the great times of my life.

So imagine my surprise in New York a few weeks ago when I discovered a beautiful, hand-signed LeRoy Neiman, limited-edition serigraph of the Clubhouse at Old St. Andrews.

His subject was my exact view from the club each day. And Neiman's trademark vibrant colors capture the spirit exactly. When I gaze at that print, I feel like I'm being transported back in time.

I was tempted to buy the serigraph right then, on impulse, as so many art buyers do. But I didn't. I've learned how to save thousands of dollars on almost any artwork. You can too - and now is a great time to do so. Here's why...

A few weeks ago, The Wall Street Journal ran an article on the art market's current "blue period." For decades, high quality, limited-edition artwork has been one of the highest returning investments.

Yet like so many assets, prices have dropped sharply in recent years. As the WSJ reported, "The recession battered the art market for much of 2009, as prices for some of the world's top artists fell by a third and auction houses struggled to win over wary collectors."

If you have any contrarian instincts, you already know that buying an asset while it's out of favor often rewards the patient investor. And while I wasn't considering the Neiman strictly as an investment - I wanted that piece on my wall - I'm never opposed to saving a few thousand dollars. Here's how I did...

Want Fine Artwork? Here's How to Buy It...

I called Mike Kuschmann at Fine Arts Limited. The company doesn't have a gallery of artwork to sell. In fact, it doesn't have a gallery at all.

Mike is strictly a "buyer's broker." That means he works for you, not the seller. When you find a piece you like, Mike contacts the seller on your behalf and negotiates a dealer's price. Depending on the piece, you can save hundreds or thousands of dollars.

I've known Mike for decades and used his services many times, as has my Investment U colleague, Mark Skousen. Mike has an excellent reputation for quality and reliability.

You don't need to spend a small fortune to own beautiful artworks. When you visit a gallery, art festival or retail store and see a print, painting, sculpture or other piece you'd like to own, don't pay retail.

Instead, call Mike at Fine Arts Limited... and save thousands. For example, the Neiman serigraph I wanted retails for $9,000. But using Fine Arts Limited, I paid roughly half that. The piece is at the framers now.

I know of no one else in the country who offers this kind of service. For a complimentary brochure pack detailing his services, you can call Mike at: 800-229-4322, or 407-702-6638.

No investment provides more pleasure - or says more about you as an individual - than the art you display.

So take a look at the walls in your home or office. If they're dotted with framed posters from the furniture store, or that print of dogs playing poker that you bought on your first trip to Las Vegas, consider giving Mike a call.

What other investment pays this kind of dividends every day?

Source: Investment U