Lai See | Deutsche Bank's property analysts seek a helping hand
Investment banks tend to be rather ambivalent about ranking awards organised by financial magazines such as , and . When journalists speak to the banks about the awards they are frequently told they don't mean very much. However, if they win one this apparent indifference changes to undisguised glee and the award is displayed in the reception area or the boardroom, and it appears in the bank's advertising.
All this is by way of noting that voting is under way for one of polls. We know this because we have received an e-mail from Deutsche Bank's property research team written in simplified Chinese characters. There is some dispute over how the e-mail's subject line reads, with some translating it as "show your sympathy", and others as "lend a helping hand". It goes on to say that if you value our services please vote for us. Since this is written in simplified characters it is presumably aimed at mainland buy-side asset managers who are evidently considered a growing force in the market or at least in polls.
The crackdown on corruption on the mainland has hurt the luxury business, including the diamond industry. The website Asia Cracked has an interview with a mainland diamond trader who says diamond prices and demand have fallen 8-10 per cent from a year ago. This is not solely due to the crackdown on corruption. Consumer confidence is low in China and India, the two main drivers of diamond demand over the past four years. Prices of rough diamonds have remained high as De Beers and other suppliers have cut supply, but the price of polished stones is falling. Retail inventory is quite high, which doesn't augur well for the likes of Chow Tai Fook.
The piece notes that as with the shadow-banking centres of Wenzhou and Erdos, there has been a rash of CEOs going bankrupt and skipping town. "There has been at least one instance a month of a big diamond or jewellery company going bankrupt and the CEO running away with the goods," the site quotes the trader as saying. This has mainly been occurring in Shenzhen and Hong Kong.
Interestingly, the trader says his sales track the four trillion yuan (HK$4.54 trillion) fiscal stimulus. So in 2010 half-carats were popular, but when the stimulus hit, he sold a lot of one-carat stones and even up to eight carats, along with fancy coloured stones. One-carat stones were still popular at the beginning of 2012 but this tailed off and by the end of the year he was selling a lot of low-value stones and the sales of fancy coloured stones had slumped.
