Mixed Trading at Stormy Hong Kong Show

RAPAPORT... The diamond trade expressed some frustration about erratic activity at the Hong Kong Jewellery and Gem Fair which began on Wednesday, particularly amid warnings that a category 10 typhoon might hit the island. Many Jewish dealers arrived at the show late following the Rosh Hashanah festival that ended Tuesday, while Indian Jain observers closed their booths on Thursday for the Samvatsari holy day. The show was further hampered by concerns that bad weather would keep buyers away on Sunday. Still, visitor traffic was steady on the opening two days of the show, with busy activity during the peak early-afternoon hours. Buyers were testing the market and pushing for higher discounts, exhibitors noted. "Chinese buyers have been out of the market in the last few months and their costs have risen in that time due to the devaluation of the renminbi," explained Ditesh Shah, head of purchases and sales in India for Hong Kong-based A.K. Export. "So, they're quite price sensitive." There is a focus at the show on 0.30- to 0.50-carat, D to J, SI diamonds and steady demand for 1-carat, G to K, VS to SI stones, although there is not a lot of freshly manufactured goods coming to the market, exhibitors reported. Prices for those categories have held steady in the opening days of the show, while demand for small and cheaper melee diamonds remains soft. Weak currencies impacted sentiment among buyers from across the region, with the Chinese renminbi down 5% since the beginning of the year, the Indian rupee losing 12%, the Turkish Lira slumping 62% and Indonesia rupiah declining 9%. Buyers are subsequently conservative and there's uncertainty about the further impact trade tensions between the US and China might bring to consumers, added an Antwerp-based trader who requested anonymity. The trade will get a better sense of consumer sentiment in Hong Kong and China during the upcoming October 1 Golden Week. While jewelers already have stock for that festival, they're looking for goods ahead of the Christmas season and Chinese New Year, which takes place on February 5.They're hoping the positive momentum seen in the first half of the year, when the major jewellers Chow Tai Fook, Chow Sang Sang and Luk Fook all reported double digit growth, will continue. The major jewelers had a good first half of 2018 and there is a feeling that inventory levels are low, said Lawrence Ma, president of the Diamond Federation of Hong Kong, China. He added, however, that the smaller independent jewelers were having a tougher time, and that there are challenges that have emerged in the second half of the year. "Trade tensions between the US and China, higher interest rates and a stronger dollar are all affecting demand," Ma said at a press conference hosted on Friday by show organizer UBM."We can expect a good, but not excellent, show given the challenges we face."The loose diamond section of the show at the AsiaWorld-Expo closes on Sunday, September 16, while the finished jewelry exhibit at the Hong Kong Convention and Exhibition Centre began on Friday, September 14 and runs through to Tuesday, September 18.  Image: Entrance to the show at the Hong Kong Convention and exhibition Centre (Rapaport News).