Moscow Exchange to Start Trading in Diamonds

Moscow: Russia’s biggest diamond company, ALROSA, and the Moscow Exchange are developing a project to establish trading in investment diamonds and futures (a form of contract that sets the timeframe and price for selling a commodity).

The head of the Moscow Exchange commodities department, Mikhail Orlenko, believes that the project may be of interest both to private investors, who will get a new investment instrument, and to jewelers.

The plan is to trade in standard diamonds, weighing 0.5 and 1 carats. Alexander Tikhomirov, deputy head of the ALROSA department for client policy and marketing, explains that a diamond weighing 1 carat costs about $8,000, while a 0.5-carat stone will fetch about $2,500.

Futures will be linked to 1/100 of a diamond, meaning a futures contract will cost approximately $80 and $25, depending on the size of the stone.

According to Daniil Kubsky, head of the exports department at the Israeli diamond producer David Levy Polished Diamonds, prices for the stones are more stable than prices of precious metals: Their value fluctuates by about 5 percent a year.

Only rare stones, e.g. blue diamonds, are subjected to sharp fluctuations in prices. Five years ago, a large blue diamond weighing about 10 carats was sold at about $1.5 million per carat, whereas in 2015, the price shot up to $4 million per carat.