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Blue Nile: Mark Vadon Exits
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Charles & Colvard: Signs
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Tara Jewellers: Opens First
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Polished
IIJS: Gold Jewelry a Hit,
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Rio Tinto Diamonds: Jean-
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GIA: Launches Search For New
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Mining
De Beers: H1 Production
Increases 1 Million Carats
Petra: Production Up Record
21% In Fiscal 2013
Gem Diamonds: Leteng
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Sep 13
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I DEX MAGAZI NE No. 281
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21
contents: focus
88 the changing face of the
DiamonD Bourse
Like many things from our past, the diamond bourse as the
only place to trade diamonds and as a place solely to trade
diamonds is long gone. This month, we look at the changing
face of the diamond bourse and take a look at one of the
iconic if not the most iconic symbols of the trade.
90 traDing Places: the role
of the traDing halls in
Doing Business
It could be one of the effects of globalization or, as competition
becomes ever fercer and proft margins increasingly slimmer, it
might be the perceived need among diamantaires for increased
confdentiality, but have trading halls become irrelevant to the
modern diamond business? Albert Robinson investigates.
96 its a small WorlD after all
IDEX Magazine editor-in-chief Danielle Max spoke to WFDB
president Ernest Blom about some of the changes taking
place in the WFDB and to Rami Baron, a member of the of the
executive council of the WFDB about one of the organizations
initiatives the World Diamond Mark.
104 traDe shoW on the
traDing floor
Imitation, it would appear, is the sincerest form of fattery
in the diamond business, as it is in any other. When a good
idea catches on, it spreads quickly. And the trend of using
a diamond exchange as a trade show venue is one of those
ideas. Albert Robinson looks at this growing phenomenon.
110 oh (a Bourse in) canaDa!
While countries such as Israel, Belgium and the US have
long had central diamond bourses, other countries are
just beginning to get in on the trading act. Among them is
Canada, which offcially launched trading in January of 2010.
Since then, its trading power has grown and grown. Danielle
Max put some questions to Diamond Bourse of Canada (DBC)
president David Gavin.
90
TRADInG PLACES
96
ITS A SMALL WoRLD AFTER ALL
104
TRADE ShoW on ThE TRADInG FLooR
Cover Image: Jonathan Torgovnik for IDI
22
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I DEX MAGAZI NE No. 281
contents
58
39
74
86 126
26 letter from the eDitor
by Danielle Max
28 market snaPshot
A quick glance at the events of the past month
33 memo
retail et cetera
39 retail renDezvous: Pure Beauty
48 the Porte Point of vieW:
innovative JeWelry sale
creates instant cash floW
by James Porte
50 retail Bytes
58 facets
PolisheD
63 PolisheD neWs
70 PolisheD DiamonD Prices
74 hoW to avoiD Damage to
gemstones: Part iv
by Claudio Russo
86 ruBy Prices: is the Party over?
by Menahem Sevdermish, FGA D.Litt. and Guy Borenstein, FGA
80 iDeX online rough rePort
the iDeX DiamonD rePort
mining
119 mining neWs
126 Profile
Arun Shah, Chairman, Ankit Gems Pvt Ltd
128 aDvertisers list
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Office No: DE5080A, Tower D,
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Email : kanhaiya@saraffgroup.com
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October 25 27, 2013 P
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w w w. i d e x o n l i n e . c o m
S eptember 2013
VOL. 29 No. 281
EDITORIAL DEPARTMENT
EDITOR-IN-CHIEF Danielle Max
IDEX ONLINE EDITOR-IN-CHIEF Albert Robinson
IDEX ONLINE RESEARCH Ken Gassman
INTERNATIONAL CORRESPONDENTS Tamar Katzav, Edahn Golan
COPY EDITOR Robin Miller
ART DEPARTMENT
GRAPHIC DESIGN Alexandra Quinn
PRINTING Meiri
MARKETING DEPARTMENT
SALES ADVERTISING MANAGERS Yaron Barzilay, Osnat Davidov,
Anish Kuriakose, Avivit Morhaim,
PRODUCTION & CIRCULATION Helena Dorsht
ACCOUNT MANAGER Ronit Erlich
Founding Editor and Publisher of Mazal UBracha: Chaim Even-Zohar
IDEX USA
7 WEST 45TH ST. SUITE # 1602, NEW YORK, N.Y. 10036, U.S.A.
TEL: +1-212-382-3528, FAX: +1-212-382-2671
IDEX BELGIUM
74 LANGE HERENTALSESTRAAT, 2018, ANTWERP, BELGIUM
TEL: +32-3-234-1157, FAX: +32-3-234-2463
IDEX ISRAEL
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TEL: +972-3-575-7455, FAX: +972-3-751-1203
IDEX INDIA
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MAILING ADDRESS
IDEX MAGAZINE, P.O. BOX 3107, RAMAT GAN, 52130, ISRAEL
E-MAIL: MAGAZINE@IDEXONLINE.COM
IDEX Magazine is published in Israel by Idex Online S.A. and incorporates Mazal UBracha Diamonds
Magazine. Reprints of individual articles are obtainable on application to the editor. All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or
by any means without the prior written permission of the Copyright owner.
PUBLISHED BY IDEX ONLINE S.A.
ISSN 0334-6838
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magazine
I NCORP ORAT I NG MAZ AL U' BRACHA
26
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I DEX MAGAZI NE No. 281
Changing Times
And Not
Necessarily for
the Better
by Danielle Max
his months magazine takes a good look
at the changing face of the traditional
diamond bourse. From a place where
people would meet and talk and chat
and schmooze and do business, these
days, diamond traders are just as likely
to be holed up in their ofces conducting business
from behind the screen of a computer.
Like everything else in life, the only constant is
change, and the move away from the busy trading
foor to other means of business may be a problem for
those who look back to better and easier times with
nostalgia, but really, its nothing more than life doing
what it does. Changing.
Believe me, I am a supporter of change. But not when
it makes things more difcult. Modern life, with all its
labor-saving, time-saving, efort-saving devices and
means of communication, has somehow ended up
being just as labor, time and efort consuming as before.
To wit. For the last four days I have been locked in
a battle with a supplier of computer products that
are supposed to substantially improve the work
flow between IDEX Magazine HQ and our talented
graphic designer. I am sure that said product from
said company (I ll mention no names, but should
you ever download PDFs, you ll know who I am
talking about) would greatly improve my life, but
for some reason, the order is not going through, the
credit card is not being charged, and I am spending
hours waiting for customer service to respond to
my pleas, questions and queries.
Of course, because this is the Brave New World, there
is no actual phone number to contact, no human
being to sort out the issue in minutes. Instead,
there is a no doubt extremely hardworking back
ofce team that is trying to help via a chat system.
Unfortunately, we seem to be speaking (or should that
be writing) two diferent types of English, and so the
war of words wages endlessly on.
I have no doubt that the issue will eventually be
resolved, and my life will indeed be much easier, but
until that happens, I will continue to bemoan every
minute spent in front of the computer screen, and I
will look back with nostalgia to easier times
l
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I DEX MAGAZI NE No. 281
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31
LINGO
tiger kidnapping A tiger kidnapping, or tiger robbery, involves two separate crimes. The frst usually involves an
abduction of a person. Instead of demanding money, the captors demand that a second crime, such as theft, be
committed on their behalf. The person held hostage is kept by the captors until their demands are met.
This ruby and diamond bow pendant is part of an Elizabethan jewelry stockpile of 500 items found by pure chance in
a cellar in East London in 1912 that is to go on display at the Museum of London from October to April 2014.
It is thought that the jewelry was hidden by goldsmiths who were sent to fght in the English Civil War, which began
in 1642, and who hid the items expecting to return to collect them. However, experts believe the owners did not
survive the confict since the jewelry remained in its hiding place until it was discovered when workmen knocked
down some buildings in the Cheapside area of east London. The area was known for its jewelry shops in the 17th
century. Although the Great Fire of London destroyed the buildings, the cellars survived.
|
MARkEt sNAPshOt
|
PhOtO OF thE MONth
Image: Museum of London
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I DEX MAGAZI NE No. 281
|
33
1
Rough diamond prices have remained frm.
Miners, namely De Beers and Alrosa, which
supply nearly 50 percent of the global output by
volume and a similar amount by value, so far have
refused to lower their prices. Traditionally, when
a price correction is needed, instead of reducing
prices, assortments of rough diamond parcels are
improved. Tis creates a de-facto price reduction.
During the upcoming sales weeks (after this
magazine goes to print) by De Beers and Alrosa,
assortment improvement may very well take
place, but this is just papering over the cracks.
Rough Prices and Choked
Jewelry Sales
by Edahn Golan
2
Polished diamond prices are sliding. Te price
of raw material may be steady, but the resultant
product is sold for less. Price declines are an
important signal to the market that consumers
are not willing to pay so much for diamonds. Tis
is mainly true for the bread and butter items
0.3-2 carats VS-SI rounds in a wide range of colors.
M
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34
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I DEX MAGAZI NE No. 281
|
memo
|
3
Te US economy, despite the gloomy talk, is
improving. Unemployment is slowly declining,
infation is at bay, the stock markets are rising,
housing starts are up year-over-year and jewelry
sales are rising month-to-month. Yet retailers are
reluctant to pay more for diamonds.
4
Retailers know their customers. If American
retailers are resisting further price increases, even
after gold prices have cooled, they are refecting
a sentiment that is coming from their clients. It
is difcult to claim that retailers misunderstand
their clients at a time when they are showing
signifcant improvements in sales, at least in
the high single digits every month on a year-
over-year basis. At the same time, expenditure
on diamond jewelry as a percentage of total real
income is declining.
If the economic situation is improving, and overall
jewelry sales are rising, but diamond jewelry sales
are stagnating, then maybe it is time to consider
the fundamentals. Are consumers actually
interested in diamonds? Are these gems slowly
losing their appeal and becoming less fashionable?
Or are pricing issues blocking marketing eforts?
5
Polished prices are above pre-crises levels. Te
IDEX Online Polished Diamond Index has been
hovering around 133-134 for about a year now.
In August 2008, at their peak before the 2008
economic collapse, rising prices pushed the
Index to an average of 128.9. Currently, prices are
on average 3.5 percent higher.
6
Todays higher polished prices are not generating
better margins. In fact, nobody is better of
with the higher prices. De Beers, despite a rise
in production, reported that sales in the frst
half of the year were unchanged year-over-year
at $3 billion. At higher rough diamond prices,
this means that De Beers actually sold fewer
diamonds by volume.
Polished diamond prices are artifcially high. Not
because De Beers is manipulating the market, or
for any other such sinister reason, but because
manufacturers have no choice the price of
rough is high.
If polished diamond prices continue to slide,
which would be bad news for the diamond
trade, they may reach a more palatable level for
consumers, resulting in improved sales. Instead
of scrambling to block sliding polished diamond
prices, rough diamond prices should pull back.
Tis should not be done hastily, but to allow prices
to slide to a reasonable level. Tis will invigorate
sales all along the pipeline and allow diamond
jewelry to recapture lost market share. IDEX
FOR LIVE UPDATES
WWW. I DEXONLI NE. COM
V
I
S
I
T
and
are trademarks used under license from the De Beers Group of Companies.
| www.ydILtd.cOM
88
| Back to the Floor: The Changing Face of the Diamond Bourse
B
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Israel Diamond Exchange Trading Floor
Image: Jonathan Torgovnik for IDI
Back t o t he Fl oor : The Changi ng Face of t he Di amond Bour se
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89
Like many things from our past, the tradition of
the diamond bourse as the only place to trade
diamonds and as a place solely to trade
diamonds is long gone. The period when
traders met everyone that they did business
with face to face, and when they negotiated
long and hard over every transaction until
uttering the word mazal and shaking on a
new deal is now nothing but a distant memory.
Today, many traders do not even venture down
to the trading foor of the major bourses of the
world. They conduct business from their offces,
letting people who want to trade come to them.
In a number of cases, the trading foor is now
just for those people who do not have an offce,
small time diamantaires who carry their offce
in their briefcase. Others do not even maintain
an offce, preferring instead to conduct all their
business through the virtual world of the online
diamond trading platform (such as IDEX Online).
But the bourse is no longer just a place to trade
diamonds in the old-fashioned way. These days,
bourses are looking for all sorts of creative
ways to increase business in their centers and
to make the trading foor the place to be for
doing deals.
This month, we look at the changing face of the
diamond bourse and take a look at the past,
present and even the future of one of the iconic
if not the most iconic symbols of the trade.
T
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P
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e
s
:
The Role
of the
Trading
Halls
in Doing
Business
By Albert Robinson
Image: Jonathan Torgovnik for IDI
90
| Back to the Floor: The Changing Face of the Diamond Bourse
T
r
a
d
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g
P
l
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e
s
:
The Role
of the
Trading
Halls
in Doing
Business
By Albert Robinson
Image: Jonathan Torgovnik for IDI
Back t o t he Fl oor : The Changi ng Face of t he Di amond Bour se
|
91
92
| Back to the Floor: The Changing Face of the Diamond Bourse
92
| Back to the Floor: The Changing Face of the Diamond Bourse
The attempt to revive the bourses
trading foors in non-traditional
ways can be traced back almost four
years to the beginning of the Antwerp
Diamond Trade Fair. That event has
been joined by a similar type of trade
fair, the Israel Diamond Week, on the
foor of the Diamond Dealers Club of
New York (DDC) in December, and the
holding in March and late August of a
US & International Diamond Week at
the Israel Diamond Exchange.
The question arises as to what this all
means for the 28 World Federation of
Diamond Bourses (WFDB) affliated
exchanges situated around the globe
in 22 countries. For some years,
trading activity on the foors of the
worlds diamond exchanges has
declined, including those exchanges
formerly known for their hectic levels
of activity, such as those in the United
States, Belgium and Israel.
Clearly, many diamantaires prefer
to carry out business in the relative
calm and privacy of their offces.
That trend has been strengthened
by new technology, the Internet and
instant communications, which all
come together in the form of the
many instant trading platforms that
have been created in the past decade
or less. Hardnosed competition has
led a transformation in the way that
diamantaires do business.
Where trading was once almost
exclusively seen in the halls of the
diamond bourse and on the trading
foor, diamond companies are now
happy to have traders bring goods
from other companies even in the
same bourse to their offces. Its a
little sad to say, but we prefer to stay
in our offces and have goods brought
to us for inspection, said Diamond
Dealers Club of New York president
Reuven Kaufman.
There often isnt the time anymore
to have an unhurried walk around
the bourse, chatting here and there
with friends and acquaintances. Dont
get me wrong, that still happens, but
just not a lot now. The atmosphere
is more tense than in past times.
People feel the pressure more. Its all
about results. We want an effcient
way of operating that creates as little
lost time as possible, and by having
people bring goods to the offces, this
happens, he added.
It could be the effects of globalization or, as competition
becomes ever fercer and proft margins increasingly
slimmer, it might be the perceived need among diamantaires
for increased confdentiality, but have trading halls become
irrelevant to the modern diamond business? A recent trend
of creating tradeshows, as well as other events, on the trading
foor of bourses has put the spotlight on diamond exchanges
and their changing roles.
Back t o t he Fl oor : The Changi ng Face of t he Di amond Bour se
|
93 Back t o t he Fl oor : The Changi ng Face of t he Di amond Bour se
|
93
The infuence of the younger
generation of diamantaires, who
have entered the business in the past
decade or so, has also added to the
changing trend of working practices.
Using modern business techniques has
brought about mid-scale change in the
diamond sector, in spite of its highly
conservative and traditional nature.
Although personal meetings remain an
important way of doing business, new
methods of conducting transactions
are nevertheless transforming the
diamond sector.
We did not believe in the past that it
would be possible for a diamond to be
sold without the potential buyer seeing
it with their own eyes and feeling and
inspecting it with their own hands,
said former Israel Diamond Exchange
president Avi Paz. But we have
learned in the past decade, with the
introduction of modern technology
and payment methods that provide
guarantees of being able to return the
gem, that this is indeed possible.
Todays diamond business is so
fast-moving that whoever insists on
what are now seen as old-fashioned
working methods fnds himself left
behind. There really is no choice
but to move with the times. The
older members of the exchanges are
not comfortable with this, but they
have to accept it just as the young
generation do, Paz added.
Indeed, some younger members of the
trade seriously ask whether it is still
necessary to go to a diamond bourse
to look for diamonds to buy when a
few computer clicks on an online
trading platform often produce the
exact gem required. I dont always go
to the diamond exchange, said one
Israeli dealer.
If I am stuck for time and need to move
quickly, then I stay at home and work
from the computer and mobile, he
said. I can often track down a stone in
30 minutes or less, while saving myself
travel time and being at home with the
children. This is a huge advantage.
I am not saying that this is what I
would be prepared to do every day,
because you must retain relationships.
You must see people face-to-face,
there is no replacement for that. But