Hello Gord
Some information of interest:
WEEKLY MARKET COMMENTS
News: Diamond market outlook improving as rough supplies tighten and
polished demand from the US maintains strength. It looks like the
diamond market has bottomed out. Russian crackdown on diamond
exporters, increasing hostilities in Angola and Sierra Leone, Congo
ban on US dollar diamond trading, and active buying by De Beers' CSO
are severely restricting supplies of outside rough. This weeks' sight
came in at about $400 million with more goods to India and tight
allocations of better quality, larger stones. Far East demand
slightly better with Japanese paying very high prices for excellent
cut, 1/ 4 -2/4. US demand for larger stones (3 ct. +) increasing and
even 4/4 have begun to firm. 5/4 + D-I, VS-SI goods very strong.
Zales reports 14 percent increase of earnings to $64 million for
latest quarter. World gold demand hits record peak at 807 tons for
fourth quarter 1998.
........ The association representing diamond buyers in the Democratic
Republic of the Congo--The Comite Professionel des Comptoirs des
Matieres Precieuses (CPCMP)--has told authorities it will abide by a
government decree banning the use of the U.S. dollar in the local
diamond trade. The government decree is an attempt to stabilize the
wildly fluctuating parallel rate for the Congolese Franc against the
dollar. According to a report from Reuters Newswire, the ban on the
use of the dollar has reduced the supply of diamonds, because diamond
dealers have been leaving the city in order to sell their stones in
Angola, where payment is still in dollars. Aslan Piha, president of
CPCMP said diamond sales, which usually average $35 million a month,
dropped to $18 million in January and would likely remain low until
confusion following the ban of the dollar subsided. Piha also said the
escalating war in Angola and the onset of the rainy season there could
help bring dealers back to the Congo.
RETAIL NEWS & FINANCIALS
.... Zale Corporation posted net earnings of $64 million for the
second quarter ended January 31 on sales of $568 million. This
represents a 14 percent increase over earnings of $56 million last
year. The company, which intends to open another 80 to 90 stores this
year, said it expects earnings growth for the year of more than 20
percent.
MANUFACTURING NEWS & FINANCIALS
.... The board of directors of Michael Anthony Jewelers has rejected
the unsolicited offer of OroAmerica, Inc., to acquire all of the
company's common stock. The all-cash offer made by OroAmerica was
$6.00 per share. This represents an 85 percent premium over Michael
Anthony's stock price at the time, and a 41 percent premium over the
highest closing price of the company's stock over the last three
years. After reviewing the company's progress on its long-term
strategic plan and improved preliminary results for its last fiscal
year, the board unanimously determined that OroAmerica's offer was
inadequate and not in the best interest of the company and its
stockholders. Michael Anthony said it will not enter into discussions
with OroAmerica. The attempted take-over likely relates to the recent
closure and liquidation of the Town & Country Fine Jewelry Group.
Michael Anthony recently signed an agreement with Town & Country for
the purchase of all of its assets, while OroAmerica agreed last month
to be the distributor of Town &Country's gold jewelry product lines.
.... Jostens, Inc. said it will end manufacturing tasks at its
facility in Nuevo Laredo, Mexico, and will focus its operations on its
three existing U.S. facilities. The move follows a six-month analysis
of the company's jewelry manufacturing requirements, and will allow it
to operate more efficiently. Under the new configuration, 200
employees at the Mexican factory will be let go, but the company will
add about 200 seasonal positions at its Attleboro, Massachusetts
factory. The reconfiguration, scheduled to be completed by May 1, will
result in a $1.5 million pre-tax charge to earnings in the first
quarter of 1999. The company said its outlook for 1999 remains
unchanged.
MINING NEWS & FINANCIALS
.... Ashton Mining Ltd., has produced the first diamonds from its
wholly owned Merlin project in the Northern Territory of Australia.
The company said diamond concentrate was produced during the
initiation of the processing plant at Merlin using low-grade material
from its Excalibur and Sacramore pipes. A second shipment of
Sacramore concentrate to Perth contained a selection of diamonds
including a 14.76-carat, gem quality white octahedral stone.
Production for the first 12 months is forecast at 200,000 carats, and
is expected to increase to 300,000 by the second year. The company
said the first diamond sales would be held later this quarter.
.... DiamondWorks Ltd., has extended its temporary cease trade order
to February 26, 1999. The halt in trading of the company's shares
began on January 29 and was originally for 15 days. Although the
company would not comment on the reason for the trading halt, analysts
suspect that the continuing struggles in Angola and the mining halt at
the Yetwene mine are the main factors. DiamondWorks other Angolan
mine, Luo, is still running at full capacity.
....Gold demand during the fourth quarter of 1998 reached the highest
level ever recorded for any three-month period, according to the World
Gold Council (WGC). Demand in the countries monitored by the Council
was 807 tons, six percent higher than the fourth quarter of 1997. The
massive dishoarding in Asia that marred the demand statistics for the
first quarter kept the annual total at 2,712 tons, 11 percent below
the annual record set in 1997. The fourth quarter record was the
result of strong demand in the U.S., Europe, Brazil and Mexico and
steady performance in the Middle East, which more than offset the
continued impact of the economic and currency crisis in several Asian
countries.
.... The Antwerp diamond industry is likely to have a new member of
Flemish Parliament promoting its interests following June 13
elections, according to leading Belgian newspapers The Standaard and
Het Nieuwsblad. Peter Meeus, 36, managing director of the Antwerp
Diamond Bourse for 8 years, is expected to win the election to Flemish
Parliament. Meeus is the former chief of staff of Antwerp governor A.
Kingsbergen, and has also worked as a diamond broker with Bonas &
Company. Meeus has a history of promoting and developing strategies
for the future success of Antwerp's diamond industry and has been a
staunch and articulate defender of the global diamond trade. Meeus is
likely to be joined in Parliament by former director-general of the
Diamond High Council (HRD), Marc Van den Abeelen, who is also expected
to be elected.
Regards |
