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Petra Diamonds (PDL) Are Not Forever

Diamonds would always be in demand it was said, mainly because of the huge demand from India where every bride has to be, if not smothered in them, at least well decked out in glittering diamonds. Secondly there was the Chinese market with its new rich and new middle class demanding the same baubles as those rich western hussies.

Diamonds were also regarded as a precious asset because they are not making any more and shortages will drive diamond prices higher and higher.

The sad truth is that as with any any other commodity, times and fashions change. Petras revenue was down 10% for the year to the end of June. In July it said that diamond prices would be flat for 2015-16. Within weeks the market had deteriorated so rapidly that it was forced to announce that increasing volatility had made even that forecast uncertain and todays 1st quarter results show why.

In the quarter to 30th September diamond prices fell by 8.8% in USD terms. Petra did not hold its first diamond auction until October so it had no first half income at all and it now seems to regard continuing weakness of the rand as its only hope.

Following today’s announcement Petra’s share price has collapsed by a further 5.5p (6.5%) to 75.10p. a level not seen since 2011. A year ago it stood at 210p.

 HiddenGreece –  villas and houses for sale in Greece – http://www.hiddengreece.net

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