A strategic partnership linking India and Singapore is set to offer new opportunities for Indian diamond traders to hedge their business risk.
The Singapore Diamond Investment Exchange, (SDiX) and the Multi Commodity Exchange of India (MCX) have signed a Memorandum of Understanding (MoU) forging a strategic alliance to launch spot and derivatives contracts on diamonds in India, including using the SDiX-traded reference prices.
The goal of this strategic alliance is to develop, design and launch, with the relevant regulatory approvals, the first diamond derivatives contract of its kind anywhere in the world. The contracts will utilise actual traded spot prices for the daily and final settlement of diamond contracts.
Investible Commodity
India is the largest global hub for the cutting and polishing of diamonds. There is an opportunity to establish a market in financial and commodity derivatives based on diamonds, and this partnership offers diamond market participants a unique tool to hedge their business risk and unveils new opportunities to unlock diamonds as an investible commodity.
According to further information, SDiX and MCX are together well placed to offer domestic Indian diamond traders, jewellers and financial market participants access to Indian Rupee denominated derivatives products based on physically settled diamonds.
Benchmark Price to Value Diamonds
«This development reinforces the role of SDiX as the sole provider of a global pricing benchmark for investment grade diamonds,» said Alain Vandenborre, (pictured) Executive Chairman & Founder of SDiX.
Backed by Leading Global Investors
SDiX launched in May 2016, was established to provide the only transparent price discovery mechanism for the global diamond trade, giving financial markets and investors a benchmark price to value diamonds as an asset class, and to unlock new investment opportunities for global investors.
SDiX is backed by leading global investors including Vertex Venture Holdings, one of the longest operating venture capital firms in Asia and a wholly-owned subsidiary of Temasek Holdings, a Singapore Government investment arm.
