There is some good news on the cards for the global diamond industry. The world’s first fully electronic spot commodity exchange for diamonds – Singapore Diamond Investment Exchange Pte Ltd (SDiX) is all set to go live in September this year. A new marketplace for diamond trade, SDiX will enable Investors, traders, HNIs to deal in diamonds at real-time, transactional wholesale prices.
Currently, all the global diamond trade takes place offline without any price transparency. SDiX will help change this scenario by brining price discovery mechanism on its electronic platform capable of handling 500,000 transactions per second. Since the diamond exchange will deal in physically-settled diamond trades, it has tied up with Bharat Diamond Bourse (BDB) in Mumbai, India where the diamonds will be physically stored in a dedicated vault to be operated by Malca-Amit, a provider of secured storage and transportation. Upon actual trading, the diamonds will be shipped to Singapore Freeport.
The diamond exchange will have a database of diamond inventory, graded by GIA and carrying Kimberley Process certificate, which accredited players can tap into to conduct trades. More then 25 industry players have shown interest in becoming members of the exchange, with almost half of them already being registered. Initially, SDiX will deal in two product categories – standardized basket of small diamonds below 1 carat and single large diamonds, with possibility of even venturing into futures and derivatives in future. To begin with, the exchange will operate for 4 working hours a day and may later expand to cover 3 time zones.
International Enterprise (IE) Singapore, a trade agency supporting in manpower and branding capability formation for the diamond exchange, sizes the annual global diamond marketplace at SGD 27+ billion. With majority shareholder being executive chairman and founder – Alain Vandenborre, SDiX’s second largest shareholder is Temasek Holdings’ subsidiary Vertex Ventures at 20%. Other investors in the exchange include Jim Rogers – a commodities trader, ex-SGX chief – Hsieh Fu Hua and David Tice – former mutual fund manager from US.
Apart from helping push Singapore as a diamond trading hub, SDiX will catalyze the business by bringing more transparency to diamond prices.