Nov 28, 2014

Antwerp Looks East for Business Development

A Belgian Princely Mission to Malaysia & Singapore was organised by Flanders Investment & Trade from November 22nd  â€‹to 28th, in the presence of HRH Princess Astrid of Belgium, during which AWDC organised networking events in both countries. About 140 Belgian companies, of which approximately 10 were diamond traders, accompanied the Princess on the mission.

Antwerp and Malaysia have been trading polished diamonds for some years now, but trade figures are somewhat volatile, AWDC stated. In 2013, Antwerp exported 1,058 carats of polished diamonds, with a total value of $1.9 million. In the first ten months of this year, Antwerp exported the same amount of polished diamonds to Malaysia, but the value of the goods increased to approximately $3.7 million.

"Malaysians are known for investing heavily in gold. For the first time now, they appear to have discovered that diamonds can be just as interesting an investment,” said Ari Epstein, CEO of the AWDC.

Currently, only 25% of all jewellery sold in Malaysia is set with diamonds, AWDC reports.  Gold jewellery is particularly favoured and accounts for almost half of all jewellery sold. Platinum takes second place and accounts for about 35% of the jewellery market. “Diamond producers such as De Beers and Gubelin opening retail stores is a testament to the upturn in the demand and constitutes a boost for Malaysia’s diamond trade,” AWDC observed.

"We have noticed that an active approach to this market is proving fruitful," says Epstein. "Needless to say, the princely missions to Malaysia and Singapore could not have come at a better time for us.”

Traditionally, Singapore was a link between Antwerp and India but is now becoming a booming retail market for jewellery, and an increasing number of luxury brands are now opening retail stores in Singapore due to rising consumer demand, AWDC noted.

"Over the next five years, Singapore's jewellery market is expected to increase by an average of 3% each year," said Epstein.

Since 2009, 1.6 million carats of rough diamonds have been exported from Antwerp to Singapore, with a total value of $ 283 million, AWDC reported. “More than 42% of those diamonds were exported in 2014, which clearly demonstrates an upward trend in the rough diamond trade between Antwerp and Singapore. In terms of polished diamonds, approximately 184,000 carats were exported from Antwerp to Singapore in the last six years, valued at $ 315 million,” AWDC said.

Jewellery sales in Singapore increased by nearly 5% in volume and 8% in value last year, AWDC added. Currently, the Singaporean jewellery market is worth approximately $3.5 billion, with 26% of jewellery sold containing diamonds. These positive trends are likely to continue and to potentially grow, the organisation opined. "Singapore's middle class is forecast to grow in the coming years, which would have a positive effect on the diamond market," Epstein commented.

Noting that Singapore is not only a growing retail market for diamonds, but also a financial hub that is home to numerous branches of international banks, few of whose branches specialise in diamond funding, AWDC organised a seminar on diamond funding.

 "Diamond funding is very much a niche market. Only 5 % of all financial institutions are familiar with this specific type of financing," said Epstein. "Now that Singapore is no longer just a transit market, but also a growing retail market, diamond funding may prove interesting for a number of Singaporean banks."

Banks such as First Gulf Bank PJSC, CTBC Bank Co. Ltd., Deutsche Bank AG, Union Bancaire Privée, UBP SA Singapore Branch and Indian Overseas Bank were among the participants. They were provided insights into the intricacies of diamond financing.