SDiX to launch world's first commodities exchange in physically settled diamonds in Singapore

SINGAPORE Diamond Investment Exchange (SDiX) on Wednesday announced the upcoming launch of the world's first commodities exchange in physically settled diamonds in Singapore, which is targeted to go live in September 2015.

Vertex Ventures Holdings, a fully owned venture capital subsidiary of Temasek Holdings, is an investor of SDiX.

The SDiX platform will utilise proven exchange technology to create a new marketplace for the global diamond trade, and is designed to deliver price transparency and liquidity to the diamond market through a real-time price discovery mechanism, allowing diamonds to be traded as a commodity, thus enabling the creation of a new asset class, SDiX said in a statement.

The exchange will start with two dedicated physical vaults, one operated by Malca-Amit in Singapore Le Freeport and the other operated by Malca-Amit within the Bharat Diamond Bourse in Mumbai.

It has potentially more than 25 pioneer members for the launch, comprising approved suppliers and broker members, including Paragon Diamonds, Kiran Gems and UOB Kay Hian.

SDiX chief executive officer Linus Koh said that the exchange aims to become the authoritative source of price information in diamond trading. "SDiX is several steps beyond e-commerce. Our best practice exchange price discovery platform and post-trade processes will be another venue for the diamond industry to channel transactions, but its inclusion of a broad diversity of other participants deepens liquidity and instills confidence as diamonds become established as a financial asset."

Looking ahead, Mr Koh said that the exchange platform can be extended with new instruments such as futures and diamond derivatives.

Chua Kee Lock, group president & CEO of Vertex Ventures Holdings, commented: "With its innovative exchange-based business model, SDiX is set to transform the way diamonds are traded and potentially jumpstart the growth of the polished diamonds industry globally.

"The excellent infrastructure and strong leadership team experienced in managing stock and commodity exchanges give SDiX a great head-start to making this venture a success."

Meanwhile, International Enterprise Singapore's CEO, Teo Eng Cheong, said the launch of SDiX's platform represents a step towards increased transparency and liquidity for the trade of diamonds. "This would enhance Singapore's infrastructure for precious metals and minerals trading."