Diamond Investment Exploding in Asia

Chinese Government Loans Zimbabwe a Secret 98 Million USD in Exchange for Diamonds

Forever Flawless Diamond Co. NEWS LETTER –Using a metaphor for global politics, it can be said that the Chinese are winning at the game of Monopoly, as they continue to invest in the world's richest supplies of natural resources including diamonds.
What does this mean for Rare Investment investors?

"On Tuesday, [Zimbabwe] Parliament approved a deal that would see China loan US$98 million to Zimbabwe for the construction of a state of the [sic] military college for top military officers in exchange for diamonds. The deal, signed by finance minister Tendai Biti on 21 March this year, will run for the next 20 years," says Chengetai Zvauya, journalist from Nehanda Radio, Zimbabwe News and Internet Radio Station.

Economist with the Zimbabwe Coalition on Debt and Development (ZIMCODD) says, "The Chinese know that they have a lot to gain from the agreement." Showers Mawowa adds, "The loan ties the diamond resource [to China] and it creates generational debt to the future of this country."
"Analysts estimate that China, India, Hong Kong, Taiwan and Japan currently account for 19% of the $65-$70 billion global diamond jewellery sales," said diamond analyst from mineweb.com. Shivom Seth illustrates, "Analysts forecast that demand from Asian nations is set to rise to 31% [by] 2015.

"Asian buyers have been a big force behind the gains in prices for investment-grade diamonds," says Forbes journalist, Russell Flannery. In an interview with Brian Menell, chairman of Special Situation Diamonds of London, Menell shows that supply and demand conditions argue for the continued potential of great investment returns.

“Diamonds are a tangible product, a luxury item that express emotions, which is why they have greater value than other luxury goods. The value of diamonds is expected to rise because, when looking at demand compared with supply, there is a very wide gap looking ahead three to four years.” - Varda Shine, Managing Director of DeBeers

According to Diamond.net by Rapaport, "De Beers has indicated Chinese consumer demand for diamonds grew an estimated 25 percent in 2010 with bridal solitaires accounting for about 50 percent to 60 percent of total sales during the year. Debeers expects demand in China and India to spur growth for the diamond industry in the near term."

"Harry Winston Inc. the luxury jeweler is looking to more than double it's store count to tap into China, Russia and Dubai's market," said Harry Winston's Chief Executive. "All luxury brands see China as a massive market...nothing is too big, nothing is too beautiful, nothing is too expensive. They are on a quest for true luxury," explains Frederic de Narp (Reuters).

According to Rapaport, as of May 31, 2011, Christie's Hong Kong auction house sold a total of $89,403,200 (HKD 695,744,750) worth of magnificent jewels. Vickie Sek, director of jewelry and jadeite department at Christies Asia said, "With $110 million changing hands in two days, we have concluded our best season for jewelry and watches in Asia." Sek notes, "the Asian market continues to grow and position itself as a major center in the international world of auction."

As the Chinese market demand for luxury goods widens and more and more auction houses are created, returns on Natural Fancy Colored Diamonds and rare gems are estimated to be substantial.


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