"The Company intends to use at least 90% of the net proceeds
of the Offer
to acquire a portfolio of diamonds meeting
the Company's investment objective
in accordance with the Company's investment policies and strategy.
The remaining percentage of the net proceeds of the offer
is intended to be invested in Sharia-compliant products
and used for working capital purposes."
" In the long-run this investment will be repaid, as the awareness of diamonds increases in the consumer market. The diamond is not a simple luxury product. It is not a bag – you buy it one week, and next year when it goes out of fashion, you buy another one. Women give bags that are out of fashion to their housekeepers. I have never heard of a woman who gave her diamond jewelry to a housekeeper. They pass on diamond jewelry to their daughters and granddaughters or set them in new jewelry. The diamond never wears out in their eyes. Therefore, the investment in marketing must be more sophisticated than that of other luxury items." : Motti Ganz, Chairman of the Israel Diamond Institute, speaking at the 3rd International Rough Diamond Conference earlier this year.
Enhancing the Industry’s Capital Base
Diamond Circle Capital Plc (DCC), a
closed-ended investment company incorporated in the Isle of Man, has successfully completed its initial public offering (IPO) on the London Stock Exchange.
The company has raised $74.32 million for the creation of the world's first listed polished diamond fund. In about six months, a further equity-raising round is expected. I have been in touch (and involved) with the promoters of this fund, and I have come to view it as
a very significant and constructive development for the diamond industry.The fund will only invest in “important polished stones” ranging from a minimum $1 million to a maximum $20 million per stone. Each purchase will need a GIA certificate (issued in the same year as the year of acquisition).
The fund’s diamond experts will now commence its initial purchases. The diamond portfolio will consist of approximately 60 percent of white diamonds and 40 percent of rare colored diamonds; the average diamond sizes will be 20 carats for white diamonds and five carats for colored diamonds.
The fund is almost like having a new major polished dealer in large goods alongside the handful of existing major players. The strength of the large dealers is in their ability to hold onto $20 million stones, if necessary, for many years. Their professional and financial prowess can defend prices. Hitherto, such activity has never been financed by public money – equity raised for only one purpose: to deliver value to shareholders by making money buying and selling the largest goods.
A back-of-the-envelope calculation will show that
less than 40,000 polished stones weighing more than three carats are produced annually, and that these easily represent well over 10 percent of the value of the total annual worldwide polished supply. The truly remarkable stones within this category count, at best, only a few hundred diamonds per year. This business represents a relatively small, highly specialized, quite risky and enormously capital-intensive niche in the diamond market. This niche stands and falls by the ability of the dealers, whenever necessary, to hold on to their diamonds for years – to secure and guarantee their optimum value.
About a year ago, a first placement of some $300 - $400 million by DCC was postponed, due to the financial turbulence that then swept the international markets. Just imagine what a portfolio of large rare stones acquired at that time would have been worth today. Share prices might have doubled or tripled, as almost any truly large stone purchased today can be sold at a profit tomorrow.
It is not without reason that the market for rare large stones is currently in the hands of less than a dozen companies.
The launch of DCC will instigate more competition, create more demand and – most importantly – bring cheap non-interest-bearing money into the diamond trade. The key difference between the investment funds of the 1980s and the DCC lies in the “distance” between investors and the fund’s activities in the market. If, hypothetically, a large group of shareholders suddenly may want to dispose of their shares at a time of slow demand, the share price may decline – but this will have absolutely no impact on the underlying assets.
No diamonds need to be sold to accommodate the share sellers. There will never be a “distress” sale or any shareholder pressure to either buy or sell.The DCC, which has been
promoted by the Swiss UBS Investment Bank, has assembled a team of experienced diamond industry specialists to source opportunities, to decide on investment strategy and to provide independent valuation of the portfolio. Though long-term asset growth is the main objective, attractive sales opportunities will not be ignored. The fact that the securities are fully compliant with Shariah principles makes the fund also attractive to wealthy Arabian investors.
De Beers Supports the ConceptWhen the concept of the fund was presented to De Beers’ managing
director Gareth Penny, he was, reportedly, very enthusiastic about the idea. Penny believes that
such investment vehicles will bring much needed outside (i.e. new) money into the industry, which will lead to greater liquidity and, ultimately, a reduction of banking debt. This is a U-turn from De Beers’ traditional position.
In the past, De Beers categorically opposed the concept of diamonds for investment purposes and believed that diamonds sales should have a finality to them – which meant that they needed to go to diamond jewelry consumers who would not “return” the diamond to the market. In those days, De Beers was managing the industry’s buffer stock and tightly managed the supply side. Any accumulation of stock in investors’ hands not just jeopardized stability, the company reasoned, but it also impaired De Beers’ own ability to manage the market.
These arguments have lost relevancy in the current market-driven, competitive diamond market. Today,
the market is thirsty for liquidity ever since the main rough suppliers dumped their buffer stocks onto the market.
We estimate the global banking indebtedness of the diamond industry at $18-$19 billion (not just counting the main centers, but also financing sources such as Dubai, Moscow, England, Singapore, Hong Kong, Johannesburg, etc.) The level of industry indebtedness (manufacturers and traders) is close to one year of polished sales at polished wholesale prices (pwp). With the return of inflation and increases in interest rates, financing costs are bound to go up.
The DCC brings money from outside investors – “free” money not encumbered by financing costs. Without any hesitation, one ought to welcome the influx of capital provided by the DCC and similar funds, which will undoubtedly follow in the future.
Though many of us suspect that there is currently considerable
speculative buying in the larger goods, so far there were few institutional frameworks for investing in diamonds for the non-diamond professional investor. This was bound to change – and the sooner the better. Why?
Commodity markets have been booming. Prices of most commodities (especially those of oil, nickel, tin, corn and wheat) have reached record highs despite credit market turbulence (subprime crises) and the slowing economic activity in many major advanced economies. Commodity prices have risen for many reasons – and rising demand is only one of a number of factors driving the steep value appreciation.
The diamond industry has largely missed the boom in commodity prices. This can partly be attributed to the absence of access to the trade by outside investors (speculators) who, in other commodities, contributed to price rises.
Diamonds as “Alternative Assets” ClassThere is little need here to stress that the decline in the effective value of the dollar has decreased the returns on dollar-denominated financial assets in foreign currencies. This has catapulted investments in commodities into a more attractive class of "alternative assets" to investors. Take oil for example. In the current upward spiral of energy prices, large financial institutions, hedge funds, pension funds, and other investors have been pouring billions of dollars into the energy commodities markets to try to take advantage of price changes or hedge against them. Most of this additional investment has not come from producers or consumers of these commodities but from speculators seeking to take advantage of these price changes.
Let’s be precise in our terminology. In the present context, a
speculator is someone who “does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.”
The large purchases of crude oil futures contracts by speculators (i.e. investors) have, in effect, created an additional demand for oil, driving up the price of oil for future delivery. “The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major oil companies (the ‘four sisters’). As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has to do with control of oil and its price,” says F. William Engdahl, a leading analyst and author of many best-selling books on oil and geopolitics.
What is true for oil is just as true for diamonds – though the sizes of the markets are, of course, hugely dissimilar. Because of the nature of the product, investments in diamonds have a far longer time horizon. Eventually, the diamond industry will also have futures – which will create additional demand.
As far as the market is concerned, the demand for a barrel of oil that results from the purchase of a futures contract by a speculator is just as real as the demand for a barrel that results from the purchase of a futures contract by a refiner or other user of petroleum. This will be the same in the diamond industry – and the demand originating from consumers will be just as real as the demand from investors, especially investors who are willing to hold onto the stones for many years.
Is there a downside? Of course there is. Declining share prices of a diamond investment company may have psychological ramifications; this will be noticed by analysts, journalists and investors. As this is a closed-ended investment company, basically operating as a mutual fund with a limited number of shares outstanding, the performance of DCC may, over time, be seen as an index for truly large diamond prices. If the fund, or funds like this, is badly managed, there is a definite downside due to the transparency and visibility of the fund’s activities.
From a “reputational” perspective, the fund will create positive spillover effects. It will demonstrate that the diamond business can be managed in a truly transparent environment, where outside investors can have confidence in the operations. Today, the diamond industry is almost exclusively privately owned, except for some listed companies in India, which remain controlled by the shareholdings of these firms’ promoters.
DCC may enhance public confidence and raise the comfort levels of investors. Provided, of course, that it is successful.
Exacting Reporting RequirementsWe have grown used to seeing new diamond companies start with a listing on London’s AIM market for smaller growing companies. DCC is traded on the London Stock Exchange’s (LSE) main market. The LSE is one of the world’s oldest stock exchanges and it traces its history back more than 300 years. It is unquestionably the city’s most important financial institution. Being on the Main Market is prestigious and instills confidence. The fund couldn’t be at a better place.
The obligatory reporting requirements for listed companies will mandate detailed descriptions and valuations of the company’s diamond trade and inventories. Though the growth of the fund will probably be gradual, it has the potential of becoming a major force in the diamond business – and a source of important market information on large polished price trends.
The fund is not allowed to invest in rough diamonds. The company’s principal consultant is Diapason Commodities Management S.A., based in Lausanne, Switzerland, which is one of the largest commodity investment advisers in the world and oversees approximately $7.4 billion of funds and investment vehicles in various commodities programs.
A major role is being played by UBS Wealth Management, which is providing a comprehensive range of products and services individually tailored for wealthy clients around the world. Just imagine the impact on DCC of a UBS recommendation to include some diamonds in all of the portfolios under its management. The importance of enjoying the backing of commodity traders with the experience and financial strength of both Diapason and UBS should enhance the industry’s comfort level with the new diamond investment fund. Diamond Circle Capital will be closely watched and, if successful, the formula will undoubtedly be emulated by others.
Given the present
shortages of supplies in the larger goods, it’s quite exciting to have an additional player that will only exacerbate the shortages. This may hold the best promise on diamond prices we have heard in a long time.
THURSDAY, JUNE 26TH, 2008, CHAIM EVEN-ZOHAR
Additional Reading :
The Three Industry Wild Cards
Risky Business
Alrosa chief says weak dollar will force diamond industry to act
Diamonds-The Universal Gem & Portability of Wealth
Historical Feature: The Diamond Boom of the 70's
Inflation & Weakened US Dollar Affects Diamond Prices
Investing in Diamonds: The Terms of Engagement An excellent insight
Diamond Circle Capital : Can commoditisation be good for diamond prices?
Long-term outlook for diamond jewellery positive – analyst
Huge Price Increases in Diamond Prices Boom Times Ahead
Comment:
26-Jun-2008 18:36, Marty Haske SUBJECT: Diamond Fund
RE: Chaim " The fund will only invest in “important polished stones” ranging from a minimum $1 million to a maximum $20 million per stone. Each purchase will need a GIA certificate (issued in the same year as the year of acquisition). "
Not that this would happen (sic), BUT, isn't this is a great way to re-paper and bury Certifigate Era stones, as never to be seen again "collateral".
GIA paper??? The fox guarding the chicken coop?
~~~~
26-Jun-2008 20:04, Barry Schwartz
SUBJECT: Chaim crosses the ethics line once again
I read Chaim's "editorial" today lauding the likely benefits which he projects that Diamond Circle Capital will bring to our industry. I noted Chaim's brief comment about his presumably personal "involvement" in this this fund, and thus, I assume that as usual, he either has a financial interest in the outcome or was a paid consultant. In either event, it is highly unethical and improper for Chaim to be lauding a fund which will do nothing more than speculate in diamonds. We do not need more speculation in our industry. Rather we need more stability. We need market supply and consumer demand to drive prices, not speculators. Chaim is again nothing more than a wolf in sheeps clothes, promoting a project which will do nothing but harm to our industry, this under the vieled pretense of a journalistic editorial. Shame on you Chaim and shame on IDEX for publishing your "news" story.
~~~~
26-Jun-2008 21:17, Amit Lentz
SUBJECT: Re: Chaim crosses the ethics line once again
Barry Schwartz is right on. The industry is riddled with all of these self-serving, self-interested and corrupt "journalists" telling the industry whats in their best interest. We need to get rid of the Rapaports, Zohars and all the other bottom feeders and start fresh with a free, legitimate and independent press.
~~~~
26-Jun-2008 21:17, DANIEL KATZ
SUBJECT: Re: Diamond Fund
In reply to Marty :
" BUT, isn't this is a great way to re-paper and bury Certifigate Era stones, as never to be seen again "collateral". GIA paper??? "
Agreed but this time they might actually give accurate grades ?
As a precaution each of these large diamonds like the ones mentioned for collection in Chaim's story, should be graded and certified by at least three different labs so that the perception of no bribery having taken place protects the interests of the DCC shareholders.
In reply to Barry Schwartz :
" I noted Chaim's brief comment about his presumably personal "involvement" in this this fund, and thus, I assume that as usual, he either has a financial interest in the outcome or was a paid consultant. "
Is your assumption correct ? If so please confirm or maybe Chaim can clarify this himself.
Also Barry said:" Rather we need more stability...not speculators "
I think you may have missed the point of the story.
Speculators like with most commodities push prices up but the difference is diamonds are in a more unique position because they are fungible and they do not disappear after consumption like other minerals.
Polished and rough diamonds lack some of the desirable attributes of investment vehicles, including liquidity, homogeneity and fungibility.
Fungibility does not imply liquidity, and liquidity does not imply fungibility.
Diamonds can be bought and sold (the trade is liquid), but individual diamonds are not interchangeable (diamonds are not fungible). Zimbabwean dollar bank notes are interchangeable in London (they are fungible there), but they are not easily traded there (they are not liquid in London).
However Round Brilliant Diamonds in D Colour and either IF or VVS1 Clarity in Excellent Proportions, Excellent Polish and Excellent Symmetry are considered fungibile amongst the Chinese community.
In other words the DCC is attempting to reduce the risk of this fungibility which can only but strengthen the credibility of diamonds being equivalent to other investment commodities as being considered more liquid.
The problem here lies that one must always verify the diamond, it's grading and the grading reports are genuine if these diamonds are acceptable as hard currency or investment vehicle.
Triple certifications is a cheap insurance for such large diamonds and I would think entirely reasonable as a safeguard to the DCC shareholders.
Barry one would think a cash injection by wealthy investors of " new money " would be of enormous benefit to the diamond industry rather than a few admirers buying diamonds for their wives or mistresses.
This could take diamonds out of their tin pot parochial mentality and encourage more buyers.
What is wrong with that ?
The diamond industry requires new ideas. It has become stagnant for many.
NAME THOSE GIA BRIBERS !!!!
Daniel Katz
~~~~
26-Jun-2008 21:31, DANIEL KATZ
SUBJECT: Re: Chaim crosses the ethics line once again
In reply to Amit Lentz:
" We need to get rid of the Rapaports, Zohars and all the other bottom feeders and start fresh with a free, legitimate and independent press."
But you are not going to get rid of them.They,like you, are part of the industry and your comments are only self serving.
Many of you sound so bitter.Business is difficult for some of you more for geographical reasons than any other.
If we are all to prosper there needs to be some future vision.
You want to " start fresh " ?
How your alternative suggestion about a " free " press will change anything for the better suggests to me you are stuck in a rut.And it has no relevance anyway.
The 29th June meeting in St Peterburg in Sergei's [Vybornov] enclave to discuss converting from US dollars to the more stable Swiss francs will be even more relevant now if UBS is backing the DCC.
[ We now are getting the “by invitation only” to Vybornov’s St. Petersburg conclave, illustrating that he is putting his money where his mouth is. On June 29, a dozen of the industry’s major players will sit around a table in a closed room. The list of invitees includes not only major miners such as Gareth Penny (De Beers), Varda Shine (DTC), Bill Champion (Rio Tinto), Graham Kerr (BHP Billiton), Bob Gannicott (Harry Winston Diamond Corporation) and Manuel Ganga (Catoca), but also the producers’ main downstream partners. Thus we see names such as Dilip Mehta (Rosy Blue), Chaim Pluczenik (Pluczenik), Kaushik Mehta (Eurostar), Isaac Tache (Tache), Lev Leviev (LLD), Nir Livnat (Steinnmetz Group) and Maurice Tempelsman (Lazare Kaplan) ] : Chaim Even-Zohar exposing the meeting 19th June ,2008.
We are living in exciting times. Try to enjoy the ride.Be well... DK
~~~~
26-Jun-2008 21:33, LADIGAYERS
SUBJECT: Re: Re: Diamond Fund
STOP TALKING SO MUCH AND SELL SOME DIAMONDS.WHY DONT YOU.
~~~~
26-Jun-2008 22:34, Marty Haske
SUBJECT: Re: Re: Diamond Fund 26-Jun-2008 21:17,
DANIEL KATZ SUBJECT: Re: Diamond Fund
In reply to Marty :
" BUT, isn't this is a great way to re-paper and bury Certifigate Era stones, as never to be seen again "collateral". GIA paper??? "Agreed but this time they might actually give accurate grades ?************************* "
Dream on Daniel.
The incentive is to give the same grade and illusion of repeatability.
GIA admit they were wrong the first time or someone got paid off.
That is a laugh.
That is what the Horizon database was about.
They won't even admit whether one supplier lost their submission priviledges in the face of a court ordered deposition.
Arrogance and cover-ups are their specialities. This "fund" is made to order for the crooks.
~~~~
26-Jun-2008 23:07, DANIEL KATZ
SUBJECT: Re: Re: Re: Diamond Fund
In reply to Marty :
"Arrogance and cover-ups are their [GIA] specialities. This "fund" is made to order for the crooks."
I agree with you.
Therefore large collective diamonds should be triple certified.
Since there is such a strong Swiss UBS involvement in the DCC and the strong possibility that the 29th St Petersburg meeting is mooting the change over from the weakened US dollar to stable Swiss Francs for diamond transactions one would be seeking additional protection.
Many are already dealing in Euros as the preferred diamond currency but it is still tied in with the US dollar.
The highly esteemed SSEF ( Swiss Gemological Institute) would be an appropriate diamond grader perhaps and also the IDC diamond lab HRD.
[ International Diamond Council (IDC) Laboratory.
The IDC is the governing body established by the
(WFDB) World Federation of Diamond Bourses and
The International Diamond Manufactures Association (IDMA).
These two bodies are the worlds highest Authorities in Diamonds.
*The Gemological Institute of America (GIA) is NOT an IDC Laboratory* ]
HRD are respected graders only they are stuck in a time warp. The delay in their new cut grade parameters is an annoying disappointment.
In order to remove any perceptions of wrong doing one grader alone, in particular GIA because of it's blemished record, should NOT be the sole grader.
If the internationalism of the DCC is to have any credibility they should promote themselves as such rather than stigmatising themselves via the questionable GIA association.
So many advisors and educated individuals involved in this DCC deal why would they just use GIA ? If they do this their expertise as advisors is bulls#*t.
Chaim mentioned in his story about the Arabian investors.
People have short memories. The GIA Certifigate bribery scandal stemmed from an Arabian deal.
If these precautions I have suggested are not put into place prior to selection of large collective diamonds, history may only repeat itself.
The DCC and it's shareholders are no different to a small buyer being ripped off when it comes to inaccurate diamond grading.
If the process is done with integrity the much needed liquidity in the diamond industry would be fantastic.
I must LADSIGAYERS you are right about talking too much here. We all should be selling diamonds but the future of where we are heading is in the hands of a few.
We are just the working drones that the queen bees feed off.
Daniel Katz
~~~~~~~~~~~~~~~~~~~
Question :
From: Daniel Katz [mailto:xxxxxxxxxx] Sent: Thursday, June 26, 2008 10:31 PM
To: 'Chaim Even-Zohar
'Subject: Please define " closed-ended investment company ".
" As this is a closed-ended investment company, basically operating as a mutual fund with a limited number of shares outstanding, the performance of DCC may, over time, be seen as an index for truly large diamond prices "
Chaim,
What is a closed-ended investment company?
Daniel
Reply :
A closed-ended investment company is basically a mutual fund with a limited number of shares.
An open-ended fund will always issue more shares or participation certificates. Thus if in an open-ended fund you want to invest 10 million of whatever, the fund will simply grow by that much money. In a closed-ended fund, you can only buy shares which are outstanding, i.e. someone else must sell. The exception being new issues, just like any other shareholding companies, and then you buy when an emission is issued.
I am enthusiastic about this development, as we"ll have suddenly a new dealer, operating with money from outside speculators.
Thanks for your continued interest and support.
Regards to Kirsten,
Chaim
Chaim Even-Zohar
Tacy Ltd.
Fax: +972-3-5754829
website: www.diamondintelligence.com
and www.mine2mistress.com
~~~~~
Diamond Circle Capital Plc
18 June 2007
DIAMOND CIRCLE CAPITAL PLC
These written materials are not for distribution (directly or indirectly) in or to the United States, Canada, Australia or Japan.
They do not constitute an offer of securities for sale in or into the United States, Canada, Australia or Japan.
The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act'); and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act.
The Company does not intend to register any portion of the Offering in the United States or to conduct a public placing of securities in the United States.
This announcement is an advertisement (within the meaning of the Prospectus Rules made under section 73A of the Financial Services and Markets Act 2000) and not a prospectus and investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the prospectus to be published by the Company in due course in connection with the admission of such securities to the main market of the London Stock Exchange plc (the 'Prospectus').
Copies of the Prospectus will, following publication, be available from the Company's registered office.
Diamond Circle Capital announces launch of first ever London-listed diamond fund IPO London/Lausanne, 18 June, 2007 - Diamond Circle Capital plc ('the Company'), a newly incorporated closed-ended investment company registered and incorporated in the Isle of Man, formed to invest in large high-quality polished physical diamonds, today announces the launch of its initial public offering ('IPO') and its intention to seek a listing on the London Stock Exchange's main market for listed securities.
The Company's investment objective is to produce long-term appreciation of its portfolio of diamonds.
To achieve this, the Company intends to create a portfolio of polished diamonds focused on the high quality segment of the diamond market with a minimum investment of around US$1 million per individual stone.
It is anticipated that the portfolio will comprise white diamonds as well as rare coloured diamonds.
The Company is intended to offer investors a relatively cost-efficient, listed instrument for exposure to the diamond market.
The key highlights are:
• The IPO is targeted to raise approximately US$400 million through an offering of Ordinary Shares to investors in the United Kingdom and elsewhere. The minimum offer size is US$150 million.
• The Company will be managed by Diapason Commodities Management, S.A., (the 'Investment Manager' or 'Diapason') which will be responsible for the day-to-day management of the Company's diamond portfolio and other assets.
Diapason Commodities Management is one of the largest commodity investment managers in the world and, as of 30 March 2007, managed and/or oversaw approximately US$6 billion of funds and investment vehicles in various commodities programmes.
• Operating with the investment policies of the Company, Diapason intends to build a portfolio of large high-quality white and coloured polished diamonds, diversified by carat weight, colour, clarity and cut, with a minimum investment of around US$1 million per individual stone.
•The Investment Manager has assembled a team of highly experienced diamond industry specialists in connection with the Company comprising three diamond traders (employed by the Investment Manager), a Board of Experts and Independent Valuators.
• Structure, cash and liquidity management of the Company are intended to be in compliance with Shariah principles.
• It is expected that Admission will become effective and that dealings in the Ordinary Shares will commence on or around 8.00 am (London time), on 10 July 2007.
• UBS Limited will act as Global Coordinator, Sponsor and Bookrunner for the IPO
The Investment Manager believes the Company represents an attractive investment opportunity because:
• Catalysts for growth in investment demand for large high-quality diamonds are in place, underpinned by the rising number of high net-worth individuals, especially in the Middle East, Southeast Asia and the Russian Federation.*
• There are structural supply constraints in the diamond mining industry with limited production momentum, signified by a steadily declining mineral reserve base compounded by limited exploration success and relatively high barriers to entry.
• Inventories of rough diamonds are at historically low levels with a significant stockpile having been reduced to working capital levels over the past decade.
Stephan Wrobel, a Founding Partner of Diapason Commodities Management, S.A. commented, " We are delighted to be the first pure-play listed diamond investment fund offering, providing investors unique access to the high-quality diamond market. The fundamentals of the diamond market provide a very positive backdrop, with a marked increase in demand coming from new markets, supply constraints in the diamond mining industry and inventories of diamonds at historically low levels. Diamond Circle Capital Plc will offer investors a relatively cost-efficient, listed instrument, providing exposure to the polished diamond market, where there has traditionally been limited access to investment opportunities."
Contacts:
UBS
Adrian Lewis +44 20 7567 8000
M:Communications
Sarah Hamilton +44 20 7153 1538 / +44 7836 295 291 hamilton@mcomgroup.com
Ed Orlebar +44 20 7153 1523 / +44 7738 724 630 orlebar@mcomgroup.com
Jonathan Gollins +44 20 7153 1268 / + 44 7973 749 265 gollins@mcomgroup.com
Notes to Editors The Diamond market*
•The value of the worldwide diamond jewellery retail market was estimated at US$61 billion in 2005, up from US$50 billion in 2002. It is expected to grow by 3% annually to reach US$90 billion in 2015
•One of the major drivers of diamond demand is the increased spending power of the new middle class in the major emerging markets of China, Russia, India, Asia and Latin America.
•In recent years, the diamond industry has experienced a declining reserve base and increased production costs due to lower grades and cost inflation.
•Global diamond mining cost inflation is partly driven by deeper mining and off-shore mining operations, but also general shortage of mining materials and skilled labour around the world.
•Supply constraints along with an expected growth in demand results in forecasted demand outstripping supply by up to US$7 billion by 2012 especially with larger high-quality diamonds expected to become increasingly rare.
* Sourced from Tacy Limited Report on the Diamond Market
Use of Proceeds
The Company intends to use at least 90% of the net proceeds of the Offer to acquire a portfolio of diamonds meeting the Company's investment objective in accordance with the Company's investment policies and strategy.
The remaining percentage of the net proceeds of the offer is intended to be invested in Sharia-compliant products and used for working capital purposes.
Net Asset Value announcements
The Company's Net Asset Value and the Net Asset Value per Share, based on independent valuations, will be published on the Company's website and through RNS (London Stock Exchange approved regulatory news service) on a monthly basis, once listed.
The Company also intends to publish a monthly update on the Company's diamond portfolio.
Important Information
The contents of this announcement, which have been prepared by and are the sole responsibility of Diamond Circle Capital plc, have been approved by UBS Limited solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000.
UBS Limited is acting for the Company and no one else in connection with the proposed Offering and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the proposed IPO or any other matter referred to herein.
The information contained in this announcement is for background purposes only and does not purport to be full or complete.
No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness.
This announcement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investments nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract therefor.
The contents of this announcement include statements that are, or may deemed to be 'forward-looking statements'.
These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'anticipates', 'expects', 'intends', 'may', 'will' or 'should'.
By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance.
The Company's actual results and performance may differ materially from the impression created by the forward-looking statements.
The Company undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Prospectus Rules and the Listing Rules).
Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.
Persons considering investing in such investments should consult an authorised person specialising in advising on such investments.
This announcement does not constitute a recommendation concerning the IPO.
The value of shares can go down as well as up.
Potential investors should consult a professional advisor as to the suitability of the IPO for the person concerned.
The Offering will only be made available (i) in the UK and elsewhere outside the US, to institutional investors and certain other investors in reliance on Regulation S, and (ii) in the US to qualified institutional buyers (in reliance upon Rule 144A or another exemption from, or transaction not subject to, the registration requirements of the Securities Act).
The information contained herein is not for publication, distribution in or into, directly or indirectly, the United States of America.
These materials do not contain or constitute an offer of securities for sale in the United States.
The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration under that Act or an available exemption from it.
The Company does not intend to register the securities or conduct a public offering in the United States.
In connection with the Offering, UBS Limited (or any of its agents or other persons acting for it) may (but will be under no obligation to), to the extent permitted by law, over-allot or effect other transactions to support the market price of the Company's ordinary shares or any rights with respect to, or interests in, the ordinary shares, in each case at a level higher than that which might otherwise prevail in the open market. Such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise.
There can be no assurance that such stabilising transactions will occur and, if commenced, they may be discontinued at any time and may only be taken during the period commencing on admission of the ordinary shares up to and including the date which is 30 days thereafter.
In no event will measures be taken to stabilise the market price of the ordinary shares above the offer price.
Save as required by law or regulation, neither UBS Limited nor any of its agents intends to disclose the extent of any over-allotments and/or stabilisation transactions under the IPO.
In connection with the IPO, UBS Limited may, for stabilisation purposes, over-allot ordinary shares up to a maximum of 15% of the total number of ordinary shares comprised in the IPO (before exercise of the over-allotment option) and UBS Limited proposes to enter into over-allotment arrangements with the Company pursuant to which UBS Limited may subscribe for, or procure subscribers for, ordinary shares at the offer price representing 15% of the number of ordinary shares comprised in the IPO (before exercise of the over-allotment option), to allow it to cover short positions arising from such over-allotments and stabilising transactions. The over-allotment option will be exercisable in whole or in part, on notice by UBS Limited, at any time during the period commencing on admission of the ordinary shares up to and including the date which is 30 days thereafter.
The over-allotment shares made available pursuant to the over-allotment arrangements will be sold at the offer price, and will rank pari passu with, the ordinary shares sold in the IPO, including for all dividends and other distributions declared, made or paid on the ordinary
shares after admission and will form a single class for all purposes with the ordinary shares.
This information is provided by RNS.
The company news service from the London Stock Exchange.
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Diamond Imports
Subscribe in a readerToday in History 27th June 1844
Mormon leader killed
American Joseph Smith, founder of the Mormon religion, is murdered by an anti-Mormon mob while being held in an Illinois jail cell. In his Book of Mormon, Smith claimed that he was the prophet of the last true church,that Native Americans were descended from the lost tribes of Israel, and that Jesus preached in America after his resurrection. Smith and his followers, criticized for unorthodox practices such as polygamy, were persecuted all across the eastern United States. In 1846, Smith's successor, Brigham Young, led an exodus of Mormons along the western wagon trails in search of religious freedom. In July 1847, the Mormon pioneers settled near Utah's Great Salt Lake and founded Salt Lake City.
1995 English actor Hugh Grant is arrested for lewd conduct with a prostitute in a parked car in Los Angeles.
1979 World heavyweight champion Muhammad Ali announces his retirement from boxing after 59 professional fights beginning in 1960.
1976 Palestinian terrorists hi-jack an Air France Airbus flying from Athens and force it to fly to Entebbe in Uganda.
1974 American President Richard Nixon begins his historic visit to Moscow for a series of meetings with President Brezhnev.
