Sight Letter
7th November 2008
Dear Friends
The mood that was evident at the Sight on Monday was one of despondency and concern, a market unnerved and disorientated by the rather extraordinary behaviour of some of the players in the industry who are felt to have let the whole market down quite unnecessarily. The DTC were all too aware of the change of mood and addressed the situation head on by inviting Sightholders, brokers and even some bankers to a series of presentations repeated from Monday to Thursday. Gareth and Varda talked with conviction about the DTC attitude to pricing, purchase of rough and leadership, their leadership and the clients' leadership.
Their confidence and commitment to the business was made very apparent by the announcement that the DTC was doubling the US seasonal generic advertising budget. David Lamb gave a truly inspirational explanation and overview of how the TV and print campaigns were repositioning the diamond message to make it appropriate to the current climate and engage the consumer on an emotional as well as a rational level. All of the material can be viewed on the DPS web site www.dps.org and I would strongly recommend you to take the trouble to see just how well conceived this campaign is.
Dominic Brand also talked about the Forevermark in terms of progress in China and Hong Kong and again we would suggest that you refer to the web site www.forevermark.com
For your further information we are attaching a Media Release from De Beers which gives you a good understanding of the points that were made during the presentations.
The presentations lifted the mood at the DTC but despite the market being closed in India due to the Diwali holiday there was a good deal of negativity and concern about the general situation both in India and Antwerp and whether the other mining companies will hold the line on rough prices. There was also a great deal of concern about a particular polished list and the basis on which it operates in relation to the effect it has on the market.
Obviously the Sight is much smaller than September due not only to Diwali but also the much more cautious attitude adopted by buyers in general.
INDIA
We wish all our Indian readers a very happy Diwali! The feeling is that the Diwali holidays will be extended in the manufacturing centres, given the current mood of the market.
BELGIUM
There are hardly any buyers in Antwerp either because of Diwali or the credit crunch, resulting in buyers adopting a wait-and-see attitude to the market. There is little demand for rough or polished and the recent police raids have exacerbated the situation.
USA
Barack Obama's election as president should have put a spring in the US economy's step. But, perverse as ever, the Dow Jones index actually fell in the two days after the result, although the general feeling is definitely that it was time for a change and that Obama is an inspirational figure with real potential.
Americans had mixed emotions at the Sight. They were pleased with the appearance of their goods but not optimistic about their profit making potential in today's market.
ISRAEL
The same situation prevails here as in other markets and most don't see any likelihood of an immediate return of confidence, even though the fundamentals for diamonds are actually much better than they appear at present and there is certainly much less rough coming into a market which doesn't expect to see much improvement until the Christmas season.
With warm regards
Mark A Boston
Chairman