Cape Town: De Beers, the world's largest diamond company, posted "much stronger" sales in the first half of this year amid recovering demand, Executive Director Jonathan Oppenheimer said.
"The extra demand is coming from a sense that people are keen to celebrate special events again," Oppenheimer said in an interview at the Fortune Global Forum in Cape Town yesterday.
Increase output
Johannesburg-based De Beers, which produces about 40 per cent of the world's diamonds, shut mines and cut output by 91 per cent at the beginning of 2009, as recessions in the US and Europe caused prices for finished stones to tumble. De Beers may increase output by 30 per cent this year, it said on April 26.
"The diamond market is stronger this year," Oppenheimer said. "First-half sales are much stronger than in 2009, which was an aberration. We've had a good first half."
Diamond prices rose 17 per cent in the week through June 23 from a year ago, according to the Rapaport Diamond Trade Index.
Exchange-traded fund
With more investors seeking safe-haven assets, Oppenheimer said he supported the idea of an exchange-traded fund for diamonds, though he didn't know how the concept could be put into effect.
"Each diamond is unique, so the value is complicated," Oppenheimer said. An exchange-traded fund has appeal, he said, "but it's the billion dollar question. We're very cautious as we look at it. We won't say no in principle."
An ETF would allow investors to buy a security backed by diamonds held by the fund's manager. Commodity investors use similar securities to invest in gold, silver and platinum.
