Gold sales have picked up phenomenally after a fall in prices to the INR 12,000-level ($240.50), a study by the All India Gems and Jewellery Trade Federation (GJF) revealed, according to the report of Press Trust of India and RAPAPORT posted on www.diamonds.net. The consistent steep decline in equity markets has boosted the demand for the yellow metal as a safe investment, the report says. According to the study, about 50 tons of the metal was consumed during October 1-20, compared to more than 80 tons sold in the whole of the October-December quarter last year. GJF chairman Ashok Minawala said sales during this festive season have been 15-20 percent higher than last year. “Low prices of gold and the festive period of Diwali have become [a] double opportunity for the consumers across the country to buy gold,” Minawala said. Consumers are positive toward gold and this trend is likely to continue during November and December, when sales may go up by 50 percent compared to last year, Minawala added.
Signs of crisis on the Indian jewelry market have been identified by the local Economic Times daily. With the demand for polished diamonds in the global market having slumped, the industry is caught in a different crisis situation, the daily says. While there are no takers for polished diamonds, the rough diamonds supplied to the industry have piled up and gather dust. For the first time in the past several years, the industry has asked rough diamond suppliers to cut supplies. Recently, as many as 2,000 smaller diamond units have downed shutters. At the same time, the decreased demand for polished diamonds will force as many as 2,000 more units to shut shop after Diwali vacation, believe industry sources. The Surat diamond industry supplies 60 percent of polished diamonds to the U.S. annually. “This has reduced to 30 percent and there are no buyers for diamonds even during Christmas, when the supply usually goes up. Even the Indian market has turned away from diamonds. Around 25 percent of total diamond sale in India happens during Diwali, which is almost negligible this year,” said Surat Diamond Association president C. P. Vanani. If the market situation remains the same after the Diwali vacation, rough diamond suppliers will have to limit their December supply to 25 percent of the average supply they make to the industry during this time. The situation has revisited the Surat diamond industry after nearly 20 years, the Economic Times stressed.
According to the www.idexonline.com staff reporter, the worldwide diamond trade will continue to thrive, especially in rapidly emerging markets such as the Middle East, China and India, despite the current global financial crisis, was the message that came out of a two day summit in Dubai. Diamond Trading Company (DTC) managing director Varda Shine said “in the coming years, markets across the Middle East, China, Hong Kong and the rest of Asia will play an immensely important role in ensuring that this industry continues to witness sustained growth,” the report says. “Countries like China, India and many Middle East states will continue to register positive growth,” DMCC Executive Chairman Ahmed Bin Sulayem said, adding that Dubai serves as a strategic crossroads for worldwide diamond trade flows. Over 800 traders and retailers from the diamond industry met at the summit, many from China and Saudi Arabia.
The Business Intelligence Middle East portal (BI-ME) at www.be-me.com posted an interview with Dubai retail mogul Bin Hendi, who said that his conglomerate’s Dubai retail sales were tracking down 20% and the company was preparing for staff cuts and putting a freeze on expansion. It is time for all individuals, companies and countries to take prudent action, said talking to Trevor Lloyd-Jones one of the founding fathers of Dubai’s retail sector, President of Bin Hendi Enterprises, Mohi-Din Binhendi.
According to BE-ME, the Gulf market for luxury products and hospitality concepts has never been a very unified market and recent reports suggest it is about to go through hard times after a decade of red hot growth. As the credit crunch seems to permeating from the real estate sector into consumers' minds, the concern is now that 2009 could shape up to be one of the most testing years ever in the history of the UAE. Companies are quietly shedding jobs or not hiring, according to recruiters, while the Arab world's biggest listed developer, Emaar Properties recently gave buyers more time to pay for new homes given difficulties in obtaining mortgages. The UAE's biggest bank has stopped lending to foreigners who work for top Dubai property firms on fears a slowdown could jeopardize their jobs and income and an Islamic mortgage lender, Amlak has suspended new loans altogether for now.
“In the beginning, people did not take it seriously. When they start to get their ATM cards refused from the bank, that's when sense come back, that this is serious,” says Mohi-din Bin Hendi, whose retail-based conglomerate operates in the Gulf Arab region and India and offers everything from jewellery to sofas. Job cuts in the whole retail sector are also on the way he adds, declining to be specific on figures.
Bin Hendi takes pride of place amongst the handful of family business groups that brought luxury brands to Dubai since the 1970s. It holds the franchise for famous names such as Hugo Boss, Brioni, Carrera, Casamilano, Cerruti 1881, cK Calvin Klein, Flexform, Flos, GF Ferre, Graff, Martin Braun, Minotti Cucine, Moooi, Navitec, Noa, Nubeo, Orrizzonti, Philip Stein, Porsche Design, Texas Instruments, Ulysse Nardin, Vitra, Zilli and Shanghai Tang. The hospitality brands under Bin Hendi’s umbrella now include names that are highly visible in just about every mall in Dubai, such as Japengo, Bella Donna, China Times, Business Café, Sammach, Inferno, La Brioche Café, Mini Chinese, Ruby Tuesday and Second Cup. So it is an ideal market for brands to be in. Retailers are fortunate to have so many visitors in the UAE and people spend more when they travel. Psychologically, they want to shop.
In his interview Bin Hendi was candid in his answers and said that in this financial climate one has to be proactive, calculative and “be mechanical” in response to cutbacks from the banks, which are putting a halt to even newly-polished expansion plans. According to the Arab businessman, in answer to the slowdown his company was downsizing and cutting costs and doing things in the category of the essentials, and avoiding the desirables. Asked about his group’s current strategy, Bin Hendi said the “as the financial world is in crisis, we have to suspend this expansion until such time as the world goes back to normal. This situation cannot persist for very long and it if it did, I predict it will be no longer than a year.”
In another report BI-ME disclosed that a significant majority of people buying diamond jewellery prefer to have their purchase insured against loss and theft irrespective of the value of such purchase, according to a survey conducted by International Diamond Laboratories with the support of Dubai Multi Commodities Centre (DMCC). The survey also showed consumers overwhelmingly voting in favour of affordable insurance as against existing premiums on diamond and jewellery, which are seen as unreasonably priced. International Diamond Laboratory and DMCC launched the survey as part of evaluating market response to bundling purchases of diamond jewellery with an insurance option as a means of boosting customer confidence. The 766 respondents in the survey included GCC nationals, expatriate residents and tourists of different age groups, 57% of whom had bought diamond jewellery over the past two months. The value of purchases varied from US$1,000 to above US$10,000 and 58% of the respondents were females. Over 58% of the participants said they would have their diamond jewellery insured provided the premium did not exceed three per cent of the purchase value. Another interesting finding of the survey is that 45% of the women buyers, compared to 21% of the male respondents, preferred their lost or stolen jewellery to be replaced by the insurer. Majority of the men – 44% - preferred cash reimbursement against loss and theft. Currently none of the diamond jewellery retailers in Dubai offer insurance and hence the only option for consumers is to get these valuables incorporated in their home insurance premiums. The add-on payable in such instances is often unreasonably high and disproportionate to the purchase value.
