By Michelle Smith - Exclusive to
Diamond Investing News
Serious diamond investors, or those who plan to be, should
direct their radars to Israel, a country often omitted from the
lists of nations important to the industry.
"The diamond business is such that you can't get into it
without dealing with Jews and Israelis," author and journalist
Jim Krane
told Bloomberg.
Figures released Sunday by Israel's Ministry of Trade,
Industry and Labor appear to back that statement up with cash.
Israel's exports of rough diamonds for the first quarter of 2011
totaled
$1.158 billion
and exports for polished diamonds totaled
$2.123 billion
. Compare that to last year's totals during the same period, when
rough diamond exports were only $916 million and polished stone
exports totaled $1.234 billion, and
Avi Paz
, President of the Israel Diamond Exchange (
IDE
), is justified in saying that there is no doubt that the numbers
show recovery.
Israel is a major force in the rough and polished diamond
industry. Its rise to prominence dates back to the days when
Jews
had limited career options and the diamond business was one they
could indulge in without trade and guild restrictions. Today, the
nation's diamond trade is one whose success is made evident by
the IDE's fortress. Composed of four interconnected skyscrapers
that serve as a one-stop-shop for the world's diamond players,
the IDE headquarters, with its high-tech security is nearly
impenetrable.
When the global economic crisis hit in 2008, luxury goods was
an industry whose revenues experienced deep cuts. Among those
feeling the pain was Israel's diamond industry, which accounted
for about
30 percent
of the nation's exports. Last year, the nation's diamond
operations saw a strong recovery and this year has started off
even stronger. Yet, to put the figures into perspective, Paz says
that exports are still 20 percent less than they were in 2007,
although bank debt is also 45 percent lower.
Israeli diamonds for the investor
Israel's role in the diamond industry is not due to its
possession of vast underground reserves or mining efforts. On the
contrary, this Middle Eastern state is a sieve; it acts as an
international diamond sifter. Israel imports diamonds before
examining, sorting, cutting and then distributing the stones to
world markets. The US is the leading destination, importing
nearly half of what Israel offers, and a further 26 percent of
this year's stock has flowed to Hong Kong.
Diversify your portfolio takes on real meaning when
considering Israeli diamond investments. The industry is largely
composed of private, highly successful family businesses that are
passed from generation to generation. For example, in 2010
Leo Schachter Diamonds Ltd
exported
$359 million
in stones,
M.I.D. House of Diamonds
exported $160 million and
LLD Diamonds Ltd
topped the list with exports of $366 million. Instead of cash for
shares, in this investment arena, it's cash for hard goods.
According to the
IDE
, diamonds are available however an investor likes them- every
type, size, shape and quality. The IDE claims to have the largest
diamond trading floor and the most advanced polishing
capabilities in the world. Whereas other countries' diamantaires
mainly polish small stones, Israel does it all, which includes
making a specialty of polishing medium and large stones.
Though the options are greater in Israel, a trip to the
country is not mandatory. Many
Israeli diamond
companies have locations in places such as New York, London, and
Hong Kong. Companies like
Reddiam
,
Dalumi
, and
Seren Diamonds
assist their international clients with online inventories and
other services. Israeli diamantaires are also notable attendees
at
trade shows
around the globe, such as the
Mumbai Jewelry and Gem Fair
,
JCK Las Vegas
and the
Vicenzaoro Winter Edition
in Vicenza.
Israel Back On Track: Investors Take Notice
originally posted on
diamondinvestingnews.com