Two major Canadian diamond miners, Stornoway and Mountain Province, have been put on notice and will be facing a delisting review from respectively the Toronto Stock Exchange and Nasdaq, as an extremely soft market has punished their recent results and their share prices have plummeted.
Watches of Switzerland went public on the London Stock Exchange last week, enjoying a better-than-expected debut. Shares are set to openly trade days after conditional trading started for the UK’s dominant luxury watch retailer. Watches of Switzerland (WoS) is owned by US private equity company Apollo Global Management and is the top UK seller of luxury timepiece brands like Rolex and Mayors. Under the leadership of chief executive officer (CEO), Brian Duffy, WoS’s sales have grown to make up 35% of luxury watch sales in the UK.
Tiffany & Co. (NYSE:TIF) yesterday reported its financial results for the three months (Q1) ended April 30, 2018, which saw worldwide net sales increase 15% to $1.0 billion, led by gains in North America and Asia. As a result of broad-based sales growth, comparable sales increased 10%. Profits soared 53 percent, to $142 million, as shares jumped as much as 17 percent to $119.60 in New York trading, an all-time intraday high and the biggest one-day leap in almost a decade.
Australia's Lucapa Diamond Company has been granted a trading halt by the ASX pending the finalisation of negotiations to acquire a diamond mining project. The company expects to return to the market before the open on Tuesday next week, “pending the finalisation of negotiations”. Lucapa is focused on the development of its Lulo diamond project in Angola, which has already yielded impressive results. The company has recovered gems of significant carat from Lulo but is focused on finding the primary source of the alluvial diamonds.
Update: The Indian Commodity Exchange (ICEX) has now received “in-principle” approval from India’s markets regulator Securities and Exchange Board of India (SEBI) for trading in diamond futures contracts, writes GJEPC.
Two investment bubbles, 340 years apart, provide living proof of Edmund Burke’s famous observation that those who do not know history are doomed to repeat it. Rough diamond broker and founder and president of N.Rothmann, Nurit Rothmann recounts the history of two remarkably similar speculative bubbles: the spectactular rise and sudden collapse of the tulip market in 1637 and the rough diamond market in the late 1970's and early '80s. Reprinted here by special arrangement.
On September 29, the Securities and Exchange Board of India (SEBI) expanded the list of 91 notified commodities that can be traded on Indian exchanges to include diamonds, among others. This means that India will become one of the few nations that are trying to trade diamonds. The Times of India writes, "Worldwide, diamond is a commodity that is least traded because of the difficulty in standardizing it and the perceived lack of transparency in its pricing.
Russia may have been too generous in setting the price of shares in diamond miner ALROSA in a sale earlier this year and "leaving 20 billion rubles ($313 million) on the table" after its biggest asset sale in three years, according to Bloomberg.
Stellar Diamonds suspended its share trading on London's AIM on Friday due to a possible reverse takeover transaction. The London-listed diamond developer said the deal would require the publication of an admission document and be subject to shareholder approval. It also stressed that there is no guarantee that the potential transaction will be completed. As a result, trading in the company’s shares on AIM were suspended until either an admission document is published or the company announces that the potential transaction will no longer be proceeding.
According to an article by mining.com, Anglo American's (AA) largest shareholder, South Africa's Public Investment Corporation (PIC), would prefer to downsize the company even further than was accomplished with AA's "radical portfolio restructuring" at the end of last year. The world's number five diversified mining company said it would cut around 85,000 employees and announced plans to reduce the number of mines it operates from 55 to as few as 16 to focus on diamonds, copper and platinum because of better long-term potential.
"With new fortunes being created around the world faster than at any time in history," write David Brough and Atul Prakash for Reuters, "more of this expanding elite of wealthy investors are looking at different ways of protecting cash that now earns close to zero percent interest in bank accounts, while asset market turbulence can wipe out millions in hours. Some are eyeing rare diamonds as a best friend, or long-term haven at least. And it's no longer just a top table of 'super rich' billionaires who are gravitating to this arcane world. A second division of wealthy is emerging.
Lucara Diamond's Board of Directors has approved the return of $132 million (C$172 million) to shareholders by way of a special dividend of $0.34 (C$0.45) per share to the holders of the Company's common shares. The special dividend will be paid in addition to the Company's existing progressive 2016 quarterly dividend of Canadian $0.01 (C$0.015) per share.
Commodity investors concerned that gold’s rally will sputter may want to consider another luxury item: diamonds. With odds of a U.S. rate hike creeping higher and long positions in bullion soaring, “it may make even more sense to look at a next-best commodity exposure such as diamonds, where there has been limited investor flow and presumably less downside in case the bear case unfolds,” Citigroup Inc. analysts including Barry Ehrlich said in a note. The bank recommends shares of Alrosa, the world’s largest rough-diamond producer.
As announced previously, the Russian government has sold a stake in Alrosa, the world’s largest diamond producer, generating $818 million to help close the country's growing budget deficits.
The Russian government has priced the share placement of state-controlled diamond miner diamond producer Alrosa at 65 roubles ($1.02) per share; its sale of a 10.9% stake raised almost $820 million, a source close to the placement told Reuters. The pricing represents a discount of 3.8 percent to the closing price on Friday. The Russian Direct Investment Fund (RDIF) and its co-investors, including sovereign funds in the Middle East and Asia, have bought about half of the shares in Alrosa, a source familiar with the process said.
Russia on Wednesday launched the sale of a stake in diamond producer Alrosa as part of a privatisation programme to help to bolster government finances which have been hit by weak oil prices, writes Reuters. Russia, trying to keep its budget deficit within 3 percent of gross domestic product, is also planning to sell stakes in other companies, including Rosneft and Bashneft and VTB Bank. Alrosa said the process to sell 10.9 percent of its ordinary shares owned by the government had been launched.
The Telegraph writes, "Uncertainty caused by Brexit has not put off Lucapa Diamonds from sounding out investors about a listing on Aim in London.
Kay Jewelers, a unit of Signet Jewelers, is increasing its discounts to revive its sparkle with consumers after its shares lost around 20% of their value in the past month due to allegations that some of its stores were swapping diamonds with fakes and that the company's debt-collection techniques could be problematic for regulatory bodies, CBS News in the United States reported. Signet CEO Mark Light said the company is adding "incremental promotions" to attract customers.
Signet Jewelers Ltd. has responded to recent allegations regarding its gem quality by affirming its "rigorous product quality practices." Its stock price dropped by 6.6% on Thursday after reports that an investment newsletter raised questions about Signet's credit portfolio and gem quality. "In addition, we strongly object to recent allegations on social media, republished and grossly amplified, that our team members systematically mishandle customers' jewelry repairs or engage in 'diamond swapping,'" the company said in a statement.
The diamond mining giant is arranging investor meetings in the United States and the United Kingdom next month in preparation for the government's sale of a 10.9% stake in the firm, a Sberbank executive said on Friday. The Russian government aims to bank more than $900 million from the sale on the Moscow Stock Exchange later this year, Reuters reported.
Russia forecasts receipts of around $900 million (RUB 60 billion) from the sale of 10.9% of its shares in the giant diamond miner ALROSA, the country’s news agency TASS cited a minister as saying. “Today on the market it [the value of the 10.9% holding] is a little more than RUB 60 billion,” TASS cited Economic Development Minister Alexey Ulyukayev as saying in an interview with the Rossiya 24 television channel, Rapaport reported. “I do not rule out that by the time the transaction is closed the market conditions will improve further,” Ulyukayev added.
Russian President Vladimir Putin signed a decree on making changes in the list of strategic enterprises and joint-stock companies, according to which the share of the state in Alrosa could amount to 33.001%, reports Russina news agency TASS. The Russian Federation currently owns 44% in Alrosa, the Republic of Sakha (Yakutia) - 25%, Yakutian districts - 8%. Around 23% of the company’s shares are in the free float. This means the Kremlin could offload up to 11% of the company, which is in line with previous plans.
According to Rough & Polished, Yury Trutnev, Deputy Prime Minister of the Russian Federation said privatizing Alrosa is not a priority, responding to earlier messages that Russia is considering the sale of a stake of between 11 and 18 percent in state diamond monopoly Alrosa. “I do not think that the stake in ALROSA will be a priority on the sales list.
After a week of speculation and a temporary suspension of trading in the company's securities, Lucapa Diamond Company announced the discovery of the biggest recorded diamond in Angola, confirmed as a Type IIa D-color gem-quality stone. The 404-carat diamond from the Perth-based company’s Lulo project is also the 27th biggest recorded diamond in the world and the biggest diamond ever discovered by an Australian company. Lucapa has not yet valued the diamond, but recent sales of large special diamonds suggest it could be worth more than $20 million.
The Board of Directors of Fiera di Vicenza, which organizes the VicenzaOro tradeshows, told the firm's Shareholders’ Meeting on February 3 of plans to list the company on the Milan Stock Exchange. Such a move is supported by the company's strategic and economic objectives, the directors explained. "As soon as possible, another Shareholders’ Meeting will be convened to discuss the methods and strategies for the listing process," Fiera di Vicenza said in a statement.
The gold price hit an eight-month high overnight (Feb. 8-9), very close to $1,200 an ounce and establishing a new battleground that will determine whether the current rally turns into a prolonged upward trend, writes The Week. After three consecutive annual falls during a bull market for equities and, latterly, the apparent return to an increasing interest rates, some analysts have ditched earlier predictions for gold prices to drop further.
The Australian reports that a rather unusual move has speculators wondering whether Lucapa Diamond Company (Australia) may have recovered its largest diamond yet, as the miner entered a trading halt on Friday pending a “diamond update” from the project. Lucapa has developed a reputation for unearthing large, high-quality diamonds from its Lulo project in Angola.
Tiffany & Co.'s board of directors has approved a $500 million stock repurchase program which is effective immediately allowing the repurchase of the company’s common stock based on market conditions and the firm's liquidity needs through open market transactions. The announcement follows a 20% drop in the jeweler's stock since the start of 2016 and a 30% fall over the past year.
In his latest opinion piece, award winning JCK News Director Rob Bates expresses his concern over the latest example of so-called "activist investors" nudging their way into companies.
Kieron Hodgson, commodities analyst for British corporate stockbroker and investment bank Panmure Gordon, articulates their bullish position on diamond mining stocks and prices for 2016 and beyond.
The Guardian writes that investors face a “cataclysmic year” where stock markets could fall by up to 20% and oil could slump to $16 a barrel, economists at the Royal Bank of Scotland have warned. In a note to its clients the bank said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It said the current situation was reminiscent of 2008, when the collapse of the Lehman Brothers investment bank led to the global financial crisis.
In the latest development in the story of Dominion Diamonds' disgruntled shareholders' displeasure with Dominion's (mis-)management, Reuters reports that two shareholders, who asked not to be named but together own nearly 3% of Dominion, said the company could use some of its nearly $300 million in net cash for a stock buyback.
From BloombergBusiness: "Dominion Diamond Corp. has hired financial advisers to explore a sale as the Canadian miner comes under pressure from shareholders about its falling share price, according to people familiar with the matter. The shares surged the most since 2009. The diamond miner has hired Rothschild & Co. to advise on the sales process, said the people, who asked not to be identified because the matter is private. The deliberations aren’t final and may not lead to a deal, the people said.
Kimberley Process Civil Society Coalition in Zimbabwe co-ordinator Shamiso Mtisi urged the government to consider registering the new consolidated diamond mining company on the Zimbabwe Stock Exchange (ZSE) and cede some of its shares in a bid to plug leakages of the precious mineral. The Zim government had planned to complete the consolidation process of diamond mines in the country’s Marange area into one new company by March, in which would a have a 50% equity stake. Mtisi said the government should open up the process and allow other knowledgeable investors to come on board.
Diamond industry analyst Paul Zimnisky has published a thorough "State of the Diamond Mining Industry" report as we near the end of 2015 - essential reading, in our opinion. "So far in 2015", writes Zimnisky, "the state of the global has been closely aligned with the posture of the global economy, as it so often is, and should be. The developed nations of the world are growing, but at uninspiring rates... Emerging market growth has slowed... The result in the diamond industry has been an overhang of low-to-medium-quality polished diamonds in the market for about a year now. U.S.
Jim Cramer, from CNBC's "Mad Money", recommends acquiring stock in Signet, the largest specialty jewelry chain in the U.S., Canada and the U.K, which "most people have never heard of." Cramer asks what caused a "little-known stock like Signet Jewelers to have such an impressive run", to the point where it is "crushing its competition." Firstly, "a big part of Signet's success goes back to its smart acquisition of Zales last year for $1.4 billion." They paid a 41% premium, but "it turns out that Signet got an amazing price, and Cramer thinks this is only the beginning of the potential value
In an interview with BloombergBusiness, co-founder of major commodities hedge fund Ospraie, Dwight Anderson, explains his bullish thinking on why (some) diamond stock prices are headed for a rebound. "Equities in energy and mining alike are sitting at relative absolute lows, so you look at companies in the mining industry in diamonds. Diamond prices are down in part due to the Chinese crackdown on the strong dollar, and yet you have companies like Dominion Diamond Corp. ... These are the sorts of opportunities out there that you don't get that often.