Next Week's Sight

Next week's DTC sight will be in the $350-$400 million range, probably closer to the higher figure. There seems to be some pressure by Anglo American on De Beers in respect to the sights.

Anglo wants a gradual, steady, upward slope in sights and disapproves of erratic movements. There is a belief within Anglo that De Beers has oversold in the first half of the year and, in order not to exceed the $5 billion level, the last few sights this year must be kept small.

There is also a rationale behind this thinking. It has been calculated that in order to justify a $5 billion annual sales figure, the world diamond jewelry retail markets must grow by some 3 percent in 2002. In the first half of this year, growth was flat. So in order to justify the $5 billion figure, sales in the second half must be 5 percent higher than last year (compensation for the stagnation in the first half).

There is no way in the world, we think, that this 5 percent can be obtained. For this reason we also expect that the sight allocations in January and February 2003 will be small. There is considerable conjecture in the market, some of which is definitely attributable to DTC executives, that a price increase is contemplated for the early part of next year. [DTC people say that the current DTC prices are much too low in relation to the outside goods.]