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ICICI Bank gives mixed 2008 outlook

ICICI Bank provided a mixed outlook for 2008 for the diamond industry, citing acquisition opportunities in the overseas retail jewellery segment for its predominantly Indian clients. But at the same time it warned manufacturing margins in India could see further pressure. ICICI Bank’s Senior General Manager, Corporate Banking Group, Ajay Saraf said in an interview with PolishedPrices, that the diamond market would have to be monitored “carefully”, as a result of sharp currency fluctuations, a slowing US economy and the recent financial market turmoil. But he also cited exciting opportunities for the Bank’s clients, in particular for Indian diamond companies with global footprints, in both domestic and international jewellery segments. “Currently valuations for retail jewellery in the overseas markets, like the United States, are very attractive and there is a strong synergy possible due to low cost Indian operations,” said Saraf. “Therefore we strongly encourage our clients to pursue downstream activities and develop aspirations for going into jewellery. Some of these companies are also going public and developing corporate structures. That’s a very good sign.” On the general market conditions he said the main challenge remained the continuous squeeze on manufacturing margins. “We will monitor any signs of deterioration, especially with those who have seen their rough supply quotas being reduced.” “In short, the outlook for 2008 is of cautious optimism. Although US markets continue to be a worry, we expect our clients to diversify operations in emerging markets like Middle East and China and move into higher margin jewellery business."



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