- POSTED: 21 Jan 2014 00:37
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Singapore Diamond Investment Exchange (SDiX) aims to achieve S$30 million in transactions this year and expand its client base to include more Asians.
SINGAPORE: Singapore Diamond Investment Exchange (SDiX) aims to achieve S$30 million in transactions this year and expand its client base to include more Asians.
SDiX reported S$22 million in sales in 2013 via private transactions in its first full year of operations.
In 2012, it recorded sales of S$1.2 million.
Located in the Singapore Freeport is a highly secured storage facility with its own duty-free zone next to Changi Airport.
It is where SDiX stores their diamonds on behalf of its customers.
Ninety per cent of its clients are Europeans based mostly in Central Europe and Russia.
These high net worth individuals typically invest two to three per cent of their total wealth in diamonds and hold them for an average of three years.
The company said transacted diamond so far range from two to 15 carats and are worth some US$80,000 to US$3 million.
Alain Vandenborre, executive chairman & founder of the Singapore Diamond Investment Exchange, said the demand for diamond consumption has been increasingly steadily and is now shifting mostly to India and China.
The firm wants to grow its Asian clientele from 10 per cent in 2013 to 30 per cent this year, focusing on customers from Hong Kong, China, Indonesia, Malaysia, the Philippines and Thailand.
It is working with institutional partners to market diamonds as an alternative investment asset class.
Research firm Wealth-X foresees diamond investment in Asia to rise up to seven per cent this year.
Mykolas Rambus, CEO of Wealth-X, said: "(As 2014 progresses), investment banks pick up their activities and probably into the fourth quarter, we will start to see the new cash coming into the market. Those individuals will put it into the real estate, in other assets and they will also put it in diamonds."
According to the IDEX Online Polished Diamond Index, the prices of polished diamonds fell about 1.6 per cent on-year in 2013.
However, Indian diamond group Rosy Blue -- with an annual turnover of over US$1.5 billion -- expects prices of rough and polished diamonds to rise four per cent this year.
Dilip Mehta, CEO of Rosy Blue, said: "Supply constraints continue to happen in the industry and the issues are going to be how do you compete in that very, very competitive environment? We will be trading about eight to 10 per cent more than last year and therefore will look at opportunity to buy more than what we did in 2013."
Meanwhile, SDiX said there is no risk of its trades being used to fund illicit activities such as money laundering and terrorism.
This was in response to concerns raised by the Singapore government in its recent National Risk Assessment report which identified the Singapore Freeport, along with other sectors such as virtual currencies and precious stones, for further study on whether it could be used to channel illicit funds.
"We have established guidelines on how we would operate with the supervision of IE Singapore. We only deal with accredited investors, so the entry point level is US$1 million," Mr Vandenborre clarified.
He added: "We follow the same procedures and guidelines that the private bank would have to for MAS (Monetary Authority of Singapore), so we have extensive due diligence and know-your-client forms for our clients."
After a slew of high-profiled auctions of colour stones last year, the firm said it will increase its portfolio of colour diamonds from about four per cent to 10 per cent this year due to rising demand.
The company plans to set up an electronic diamond exchange one with diamond spot prices for financial investors in the next five years.