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UAE Diamond Financing Market Grows to Dh5.5 Billion

The diamond industry is feeling the pinch as synthetic diamonds gain more currency, said Peter Meeus, chairman, Dubai Diamond Exchange. "Traders are already feeling the fallout. People are nervous, trust levels are low and companies are being...

From: khaleejtimes.comDate: 2017-10-17 01:51:47Views: 3553

The diamond industry is feeling the pinch of synthetic diamonds, say experts.

The UAE's diamond financing industry has grown by nearly 200 per cent over the last few years and is now nearing maturity, said a UAE banker on Monday.

Davy Blommaert, unit head - precious metals and diamonds, corporate and institutional banking group, National Bank of Fujairah, said in the last six to seven years, the UAE diamond financing market has grown from $500 million (Dh1.8 billion) to $1.5 billion (Dh5.5 billion).

"The rough diamond market has also expanded rapidly in Dubai because of the shift of businesses from Antwerp to Dubai. But now, it's becoming a more mature market. The stellar growth rate we have seen over the last few years is coming to a more normal, organic growth rate. Financing growth will accompany growth in line with the industry," he added.

Globally, the diamond financing market is estimated at $13 billion.

Blommaert was speaking at the two-day Dubai Diamond Conference 2017 on Monday. He said the major diamond financing players in the UAE are ABN Amro, which is the largest diamond financing bank globally, National Bank of Fujairah and Emirates NBD.

The diamond industry is feeling the pinch as synthetic diamonds gain more currency, said Peter Meeus, chairman, Dubai Diamond Exchange. "Traders are already feeling the fallout. People are nervous, trust levels are low and companies are being cautious in their dealings. The outcome is that payment terms on new transactions are shorter, liquidity is an issue - some traders only sell for cash," said Meeus.

He said the growth in retail sales of diamond jewellery has lagged nominal global GDP growth as sales since 2007 have fallen behind inflation indices. Diamond jewellery retail sales have risen by 130 per cent while GDP rose by 240 per cent.

Meeus sounded the alarm over the increased production of synthetic diamonds. "In the last two years, the availability of these diamonds has become abundant. Experts believe that as of today, about three per cent of the worldwide diamond consumption is man-made. Facilities in the Far East, Russia and China are producing enormous amounts of such diamonds," he said.

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