Diamond News Archives
- Category: News Archives
- Hits: 1027
Photographer: Qilai Shen/Bloomberg© 2016 Bloomberg Finance LP
China’s top long-term problem isn’t the trade war that dominates the social media recently. It’s a home bubble—the soaring home prices that makes landlords rich, while it shatters young people’s dreams of forming a family.
Average prices of new homes in 70 Chinese cities climbed by 9.7% on an annual basis in December of 2018, up from a 9.3% in the previous month, according to Tradingeconomics.com.
That’s the 44th straight month of price rises and the strongest annual gain since July 2017.
Soaring home prices put homes beyond the reach of the country’s average citizen. And that hurts the country’s long-term growth prospects, far more than the trade war. In fact, the trade war is just a temporary problem. It will ease, once Washington and Beijing find a formula to appease nationalist sentiment in the two countries.
But the problem of home affordability that constrains young people from forming a family is here to stay, and could be compounded by other factors. Like the middle-income trap and the Lewis point, as discussed in previous pieces here.
Worse, the soaring home prices in major Chinese cities isn’t an accident. It’s the product of deliberate local government land policies that favor rich landlords over the average citizen.
How? By creating scores of “ghost cities” -- cities filled with buildings with vacant apartments. “The mismatch between the cost of new homes and the content of the typical Chinese wallet is complete,” writes Ruchir Sharma in BREAKOUT NATIONS: The Pursuit of the Next Economic Miracles.“ Developers are building “ghost cities—“ vast tracts of apartment high—rises and malls that remain largely vacant because the Chinese worker can’t afford them.”
Vacant apartments belong to wealthy landlords who expect to sell them...
- Category: News Archives
- Hits: 954
Lucara Diamond Corp. recently recovered a 223-carat, high white gem diamond, from its Karowe Diamond Mine in Botswana.This stone will be shown alongside the 240 carat and 127 carat, top white gem diamonds reported earlier this year together with other exceptional single diamonds recently recovered from Karowe, at Lucara's upcoming diamond tender closing on March 7, 2019. <?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-com:office:office" /?>
Eira Thomas CEO said that “2019 is off to a great start, with several, high quality diamonds in excess of 100 carats having been recovered by mid February, a testament to the strong, stable operating environment that has prevailed at Karowe since late 2018. The 127 carat, 240 carat and 223 carat gems will be made available for sale alongside other exceptional, single diamonds at our first diamond tender of the year, closing on March 7, 2019."...
- Category: News Archives
- Hits: 1542
Feb 18 (Reuters) – African miner Petra Diamonds named a new chief executive on Monday as it works to cut debt and generate free cash flow after first-half core earnings were hit by lower diamond prices.
The news helped lift its shares more than 8 percent by 1010 GMT. The broader mining market was little changed.
Analysts said appointing Richard Duffy, who has held finance posts in his 27 years in the mining industry, would benefit the company as it sought to cut debt. He has previously worked at Anglo American and AngloGold Ashanti.
Petra's stock had fallen about 30% this year as the company sought to cut borrowing after heavy capital investment in infrastructure and opening up a new section of ore at its flagship Cullinan mine
Petra's stock had fallen about 30 percent this year as the company sought to cut borrowing after heavy capital investment in infrastructure and opening up a new section of ore at its flagship Cullinan mine in South Africa. Diamond prices meanwhile have dropped below historical annual averages.
The company said on Monday adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 6.4 percent to $75.6 million in the six months to Dec. 31, from $80.8 million in the same period a year earlier.
The company stuck to its production forecast of 3.8 million to 4.0 million carats for fiscal 2019.
"The focus to generate free cash flow remains paramount for the company," said outgoing CEO Johan Dippenaar, whose departure was announced in September.
Duffy takes over on April 1.
Dippenaar said the company had delivered "solid production" but recognised the impact lower value diamonds had in the six months to the end of December and said the company was...
- Category: News Archives
- Hits: 924
February 18, 2019
Europe is awash in credit exhaustion, and so is China.
The signs are everywhere: credit exhaustion is global, and that means the global growth story is over: revenues and profits are all sliding as lending dries up and defaults pile up.
What is credit exhaustion? Qualified buyers don't want to borrow more, leaving only the unqualified or speculators seeking to save a marginal bet gone bad with one more loan (which will soon be in default).
Lenders are faced with a lose-lose choice: either stop lending to unqualified borrowers and speculators, and lose the loan-origination fees, or issue the loans and take the immense losses when the punters and gamblers default.
Europe is awash in credit exhaustion, and so is China. China's situation is unique, as credit expansion has been propping up the entire economy, from household wealth to corporate speculation to the export sector.
As this article explains, The China Story That Is Far Bigger Than Apple[1], China's trade balance--trade surpluses for decades--is close to slipping into trade deficits.
At the same time, China's once-mighty pool of savings has diminished as consumption has risen. As a result, China now needs foreign investment more than it did in the previous era.
Chinese businesses have borrowed around $2 trillion in US dollar-denominated debt, requiring the acquisition of dollars to service the debt.
So far this sounds like a typical case of a fast-growth economy maturing into a trade-deficit, debt-dependent consumption economy.
What the article misses is the staggering rise in the cost of living in China over the past two decades. Some services are still affordable...
- Category: News Archives
- Hits: 872
Parcel Pro, a UPS Capital company, announced a partnership with Manufacturing
Jewelers & Suppliers of America (MJSA) that provides MJSA Premier Members access
to innovative technology and insured shipping at a time when the industry is
experiencing rapid e-commerce growth....