'City of Gold Conference’ urges review of lending policies

Speakers at the two-day conference, organised by the Dubai Gold & Jewellery Group, also emphasised the need for more marketing initiatives in the Middle East jewellery trade and for more focus on the growing trade in diamonds and coloured stones.

Chairing a panel discussion on the final day of the conference on Sunday, Tawhid Abdullah, Managing Director of the Dubai Gold & Jewellery Group said though Dubai continued to be the prime jewellery destination for the Middle East & North Africa region, traders have been smarting under volatile prices and credit scarcity.

Delegates also called for gold loans based on stock (inventory financing) against the current system of reputational lending, which links volume of credit and lending costs to cash collaterals and consolidated balance sheets.

They also pointed out that inventory financing is ‘gold against gold’ both the lender and borrower will be protected against price fluctuations.

Diamond took centrestage on the final day of the conference with industry leaders and financial experts pointing to the extensive opportunities provided by this sector to sustain growth of the Middle East gold trade.

“Total diamond sales stood at $72bn in 2006 and this was only 18% of the total $670bn spent on luxury. With the number of high net worth individuals and spend on luxury growing by leaps and bounds in major markets like India, Middle East and China, there is huge potential for the diamond trade,”

said Martin Rapaport, Chief Executive Officer of Rapaport Group.

“The party is over in the US who used to top charts in spending on luxury. It is the turn of the Middle East and Asian economies to lead the growth in the luxury segment,” Rapaport said adding that diamond trade is increasingly becoming transparent and honest with mandatory certifications like the Kimberley Process.

Peter Meeus, CEO of International Diamond Laboratories spoke about the importance of diamond certification in building consumer confidence. “Precise and accurate grading reports strengthen consumer faith since certification is a mark of trust and objectivity”.

The 6th City of Gold Conference was held in association with the Dubai Multi Commodities Centre, with Transguard and ABN Amro as key sponsors and Standard Bank, HSBC and Emirates NBD as support sponsors.

In view of the diversification of the industry and the recent developments in global economy the conference was centred on the theme of ‘Value Chain & Integration’ as its theme.

The conference brought together nearly 500 delegates including industry leaders, traders and financial experts and was the largest to date in terms of participation.