There are daily developments in diamond demand. As I write this (last Thursday) I watch my Bloomberg screen and read that Rio Tinto, the famous mining company, is increasing its diamond production. It obviously anticipates price rises.
Such a development influences the ever increasing legal marketing of simulated diamonds. This is balanced by the opening of shops aimed at the affluent tourist specialising in antique jewellery. These two developments have yet to reach Malta.
No active trade advertising of synthetic or of antique diamonds is evident in Malta, though remarkable diamonds of an antique Victorian cut do sometimes come up at leading auctions.
There is not much consciousness of the enormous Aladdin's cave of antique jewellery that is to be enjoyed in our country.
Ostentation by ecclesiastics of diamond rings is unfortunately very rare today but it was by no means so in this country up to 45 years ago. This is unfortunate as diamonds are after all innocent fun, besides being an investment - though not necessarily the best of investments.
Diamonds have been guides to levels of social, political and religious prestige since time immemorial. Their acquisition, if pursued with appropriate research, can be an educational and profitable business. Excessive ostentation can bring ridicule on an owner if carried out on inappropriate occasions.
Diamond collecting is first of all a business, the success in which is a strong indication of the prosperity of the owner in other areas of human endeavour. It is a legitimate pursuit for it raises morale and makes the owner pleased with himself, often for succeeding in pleasing a bored wife. This is the best defence against the illness of depression.
A diamond is forever, while a cigarette is for cancer, and too much alcohol begets mental imbalance, as every high official knows who has worked in an environment where the entertainment alcohol is plundered systematically.
A society producing exceptional wealth will produce some exceptional jewellery. This is to be preferred to the pursuit by certain nouveaux riches of unaffordable gambling and excesses of food and drink.
The proliferation of jewellery shops in our country is an excellent sign that Malta's rich, and not so rich, continue to follow the cultural pursuits and investment habits of their forefathers. These have made it one of Europe's most prosperous societies, where banking can give a return of 26 per cent on equity, or a newcomer to the banking scene like APS can increase its deposits from Lm20 million to Lm220 million in just 10 years.
New developments
There are all the underpinnings for a great leap forward in diamond demand in Malta. The vast increase in Malta's wealth, compared with the contracting economic conditions it experienced in the late Fifties and early Sixties, should be spent partially at least in making life more beautiful, whether for the rich or the not so poor.
Anybody who has visited the great European museums realises immediately in what high honour the jewellery trade was held in the past. This goes from the fabulous Etruscan jewellery at the Villa Giulia Museum in Rome to the diamonds of Queen Victoria's sister in the Victoria and Albert Museum in London.
In Renaissance Florence an architect had to produce an object of virtue for the jewellery trade. He had to display evidence that he had a sense of the sublime before embarking on the difficult task of beautifying his city state.
Our jewellers have a cultural mission to perform, one of the first magnitude. It is a mission made possible by reasonable profits in the trade.
Two great new developments are activating the diamond trade in Europe. Synthetic diamonds, such as moissanite stones, are bringing the diamond culture to the not so very rich, while the expansion of antique diamond shops has resulted in their opening and enlargement in the important centres of affluent tourism, such as London and St Petersburg.
In these cities great antique jewellery is to be found, sometimes having a close Malta connection, such as the large diamond knightly cross that I saw in Spink's in London. This must have been the principal constituent of a cannabilised military order decoration, probably of Imperial Czarist Russia.
I have seen the likes of this Malta cross decorating the Russian generals of Czar Paul I, Emperor of all the Russias and Grand Master of Malta, at the Hermitage Museum.
(To be concluded)
This article is not intended as investment advice, but aims to help produce an investment culture. John Azzopardi Vella has promoted the Malta Development fund and advised S&P. He is currently research economist of DBR Investments Ltd. E-mail: johnazzopardivella@hotmail.com