Diamonds Can Become An Investors’ Best Friend

By : 04-Jan-2017
Diamonds Can Become An Investors’ Best Friend

MUMBAI: India can be soon listed as the first country in the world to allow the polished diamonds tradable as a commodity for exchange. The final compliance from the Securities and Exchange Board of India (SEBI) is assumed to be roll out this month followed by the inaugural launch in March.

DIAMOND GOES INTO STOCK TRADING:

Diamond forms one of the six new financial investment commodities after tea, eggs, cocoa, pig iron and brass that the government had permitted for trading in September.

Once the diamond starts trading on the national stock exchanges it will become a financial investment product.

DIAMOND FINDS ITS PLACE IN THE STOCK EXCHANGE PORTFOLIO MARKET:

The Indian Commodity Exchange Ltd (ICEX) is in its way to launch the diamond contracts allowing the individuals in the process of purchasing and selling of the gem.

SEBI is drafting the diamond contracts in such a manner that everyone would be able to trade at a very low cost of investment.

SEBI has defined 1 carat of diamond as the minimum physical delivery lot.

One carat is equal to 100 cents which means that if a trader buys 1 carat diamond, he will also avail the physical delivery of the stone.

Investors investing in smaller lot sizes would be able to trade in electronic units.

SEBI CONDUCTED MOCK TRADING TO TEST THE PILOT SYSTEM:

The SEBI’s mock trading event saw participation of around 100 individuals. The online orientation sessions imparts gamut of knowledge about the diamond and its daily trading.

DIAMOND PROMOS CARRIED BY RELIANCE CAPITAL:

The Reliance Capital, RC has been promoting the trading of diamonds at the national level along with the major shareholders that include MMTC, IDFC and Indiabulls Housing Finance Stock.

RC has tied up with International Institute of Diamond Grading and Research (IIDGR) a wholly owned subsidiary of De Beers for rating and packing of the valuable commodity (gems).  

THE BENCHMARK PRICE OF THE DIAMOND DUE TO BE DECIDED:

As such there is no present global benchmark price for diamonds. One cent of diamond would approximately cost Rs.1,500.

The lifeless stone that failed to sip the limelight while comparing to yellow gold, white gold, silver or platinum will now showcase its shimmer in the investment market.

INDIA- THIRD LARGEST CONSUMER OF DIAMONDS:

India accounts for the third-largest consumer of the precious diamond after America and China. Out of every 13 raw diamonds, 12 are either cut or polished in India. Therefore, India enjoys the largest share in diamond cutting and polishing industry.

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