DTC February Sight: Over $750 Million with Extras & Specials
February 15, 05
The Diamond Trading Company (DTC) is holding an exceptionally large Sight this week, totaling well over $750 million worth of rough with some estimates going as high as $800 million. Most Sightholders were notified in advance that their Sight would be larger with bigger boxes and/or specials, some receiving as much as 40 percent above planned.
With a good year behind them and expectations for a challenging year ahead, the DTC offered most Sightholders an increased allocation, beyond the ITO (Intention To Offer), for Sight two.
Not all Sightholders received extras, which are more goods of the type they usually receive. The majority of clients who did receive extras got an additional 20 – 40 percent on top of the planned February ITO, with observers noting that there were in general fewer extras in bigger goods of two carats and above.
Why some did not get extras was an issue of speculation in the market, with some saying that Sightholders who are not performing well being among them.
Some DTC clients also received specials on top of the extras, pushing up the value of the Sight.
Why a bigger Sight? Conventional wisdom, rumors by any other name, holds that the big Sight is a way to counter the high premiums for DTC boxes in the market. But the De Beers Group may be concerned that supply during the coming year won’t be up to its needs or perhaps the market will soften. If either happens, the DTC is expected to lower supply later on and the extras that Sightholders received this week will be counted towards their full first half of the year ITO.
The big issue around the Sight is the submission of Sightholder profiles on Monday. They are turning in written answers to four of the 16 questions in the profile. While a few have already completed it, with less then a week to the deadline many are still hard at work trying to make sure all relevant information is included, which explains why a DTC insider has already noted that this trend results sometimes in over detailing.
The rest of the profile questions are to be answered online in the Sightholders extranet no later than March 8. Scoring will be based on the answers to all 16 questions plus points earned following DTC visits to production plants.
The scoring results are not revealed to profile submitters, but rather they are told where they stand relative to their peers. Nor do they know how many points each question carries. This brought a funny situation when the DTC revealed it had changed the scoring for some of the questions, but without knowing the details, Sightholders really had no idea how this will affect them or indeed what it really meant.