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Investment diamonds were discussed at the Moscow Financial Forum on September 28

03 october 2023

On September 28, the Moscow Financial Forum was held in the Russian capital, the participants of which discussed the main issues of financial and economic policy in modern conditions, including the problems of reorienting the Russian economy towards eastern markets, as well as currency regulation and lending.

The main theme of the Moscow Financial Forum was stated as follows: “In search of a new balance: the Russian financial and economic system during the global transformation.”

The Moscow Financial Forum discussed, among other things, innovations in jewelry sector and the prospects for the investment diamonds market.

The discussion about innovations in jewelry technologies was attended by Yulia Goncharenko, Director of the Department of State Regulation of the Precious Metals and Precious Stones Industry, and other speakers such as heads of leading jewelry companies. A presentation of the unique Russian technology for setting precious stones, “Waltzing Radiance”, developed by Viktor Moiseikin, an artist and inventor from Yekaterinburg, was held for the forum's participants. An exhibition of jewelry collections from Moiseikin, ArgentoV, MiliO, Dmitry Samorukov and others was organized at the forum.

As part of the business program at the Moscow Financial Forum, new directions for the development of the investment diamond market in Russia were also presented.

The Ministry of Finance of the Russian Federation supported the indefinite extension of the abolition of VAT when individuals purchase investment diamonds from banks. The Moscow Exchange announced the publication of “diamond indices”, and the diamond mining giant ALROSA announced the introduction of an option to buy back rare diamonds from private investors.

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Director of the Department of State Regulation of the Precious Metals and Precious Stones Industry of the Ministry of Finance of the Russian Federation Yulia Goncharenko reminded the forum participants that a year ago, as a measure of state support for new instruments to protect private investments, a zero VAT rate was introduced in Russia when individuals purchased investment diamonds from banks. This created a growing interest in a new alternative instrument of investment. After the abolition of VAT, the number of transactions for the purchase of investment diamonds in the first half of 2023 was almost equal to the result of the entire last year, and its ruble profitability increased by 40% - 80% in less than a year. 16 largest Russian banks have joined the sales of investment diamonds.

“We see that the market is developing infrastructurally, that further measures are needed to stimulate investment in diamonds...,” noted Goncharenko. “To date, this initiative has been approved by many relevant ministries and departments, and in the near future will be considered in the State Duma.”

According to Andrzej Arshavsky, managing director for data monetization at the Moscow Exchange, who supported the position of the Ministry of Finance, investment diamonds as a protective asset may be of interest to investors who want to diversify their portfolio. To support the new investment direction, the Moscow Exchange will begin to create indicators for the main diamond products - the index of diamond baskets with the code MDIAMR and investment diamonds with the code MDIAMR2, calculated on the basis of a generally accepted system for assessing the main characteristics of diamonds - the so-called 4Cs (color, cut, clarity, and carat weight).

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“The creation of the index, among other things, will open up the opportunity to issue DFAs for a diamond basket and, at this stage, trade through moexTreasures. However, we have plans to expand the distribution of this tool for individuals; we are considering the possibility of distribution through Financial Services,” emphasized Arshavsky.

New solutions for the development of the ALROSA Diamond Exclusive investment diamond program were announced by the head of the program, Elena Sukhoveyeva, Advisor to the General Director of ALROSA. Tax liberalization on the purchase of diamonds from banks has been said to have contributed to a transformation in the perception of diamonds: wealthy Russians increasingly view diamonds not just as expensive jewelry and collectibles, but also as a long-term investment tool.

“Today the task is becoming even more ambitious – to make investment diamonds available to a wider range of investors,” noted Sukhoveyeva. “Therefore, we are considering the possibility of lowering the investment threshold and are working to increase the liquidity and transparency of the market.“

In this regard, the investment diamond program extends the buyback option to individual rare diamonds - whereas previously this option was only available for diamond baskets. The ability to quickly exit an investment position should certainly increase the liquidity of the product in the eyes of investors.

It should be added that this year the updated ALROSA Diamond Exclusive program became the winner of the FINAWARD award in the “Private banking Product or Service” category.

Galina Semyonova for Rough&Polished