Thursday, May 3, 2012

Jeweller Graff gets nod for $1 bn IPO

London-based high-end jeweller Graff Diamonds has received approval from the Hong Kong stock exchange for a planned initial public offering of up to $1 billion, three sources with direct knowledge of the plan said on Thursday.

Graff could start drumming up demand from investors for the deal as soon as next week after receiving the approval, though no there is no timetable for the pre-marketing, sources said.

A Hong Kong IPO would put Graff closer to its fastest growing market, China, and help it expand elsewhere in Asia. Sales are currently split equally between the United States, Europe and Asia, but growth in Asia is far outpacing other markets, Graff's founder Laurence Graff told Reuters in a November interview.

Graff, whose giant gems and rare diamonds have been worn by royalty and celebrities such as the sultan of Brunei, Oprah Winfrey and Imelda Marcos, would join Prada SpA and other global brands looking to tap booming demand for luxury goods in China.

CLSA Asia Pacific Markets estimates Greater China demand will account for 44 percent of the global luxury goods market by 2020. China, the world's No.2 economy, will account for 16 percent of global diamond demand by 2016, up from 6 percent in 2009, CLSA said, citing estimates from De Beers.

The Graff IPO would come on the back of a 15.3 percent jump in the benchmark Hang Seng index so far in 2012.

IPOs in Asia-Pacific have had their worst start in about four years, with overall equity market activity down about a fifth from last year. Bankers have been betting on Graff's listing to help kick start the moribund market.

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