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							                         June 2008 Newsletter

Pastor-Genève News

As auction season winds down, the most recent encouraging results out of the Christie's
and Sotheby's auctions in Geneva continue to indicate strong sales at the top end of the
market and a fairly wide breadth of buying from dealers, collectors, retailers and investors.

Obviously the US market has slowed down over the last year because of the credit crunch
but the signs coming out of emerging markets, such as Asia and the Middle East, should
continue to increase buying activity over the long-term as the growth of the jewelry
industry shifts to an international market base.

We just completed the acquisition of a very rare and beautiful intense blue green diamond
described as the color of the Caribbean Sea. Almost impossible in its rarity, the diamonds
unique color composition and shade make us appreciate the beauty and rarity that the
colored diamond market has to offer.

We are pleased to announce the publication of the 4th edition of The Handbook of
Personal Wealth Management and the imminent publication of the Global Art Investment
book. As a sponsor of both periodicals, we will be receiving a select number of
complimentary copies to send to our customers.



Diamond News
Hong Kong March Jewelry Sales +11%

March retail sales in Hong Kong rose 20 percent to HKD22.6 billion ($2.9 billion,)
whereas in terms of items sold the increase was 13 percent. Sales of jewelry (watches and
clocks) rose 10.7 percent. For the first quarter of the year, total retail sales increased by
17.5 percent, and 11.6 percent in volume.
Jewelry Prices +9% in March '08

The price of jewelry in March rose 8.7 percent from one year ago, according to statistics
provided by BLS (the Bureau of Labor Statistics.) When combining the watches and
jewelry categories, the year-to-year difference was an increase of 7.1 percent in the United
States. On average, about 0.3 percent of household income is spent on jewelry. BLS
compares its jewelry price index to 100 basis points in December 1986. In March, the
jewelry index stood at 152.806 points -- the highest level since November 1996.




Colored Diamond Quote


"[The $8.9 million sale of a 13.39ct,VS1 fancy blue diamond] is due to the scarcity of
colored diamonds on the market, and to the great demand from collectors around the world
for exceptional artworks and jewels that is currently dominating the auction world."

François Curiel, chairman of Christie's Europe

Dubai Diamond Trade +32% in 1Q07

The Dubai Diamond Exchange (DDE) reported that Dubai's rough diamond trade
increased 32 percent to $1.5 billion in the first quarter of 2008, boosted by a rise in both
exports and imports. Rough exports from Dubai grew 39 percent to $915.08 million with
sales to China showing the largest increase of 671 percent to $87.28 million. Separately,
the DDE re-launched its rough diamond tenders in May, selling some 28,000 carats for an
undisclosed amount.
Christie's Magnificent Jewels Sale Geneva Tops $59M

Christie's Magnificent Jewels sale in Geneva realized a total of $59,245,750, which was a
new jewelry auction record for the company. Christie's sale May 15 sold 73 percent by
lot. Of the top selling lots, a 13.39 carat, VS1, rectangular mixed-cut fancy intense blue
diamond sold for $8,877,884 ($633,023 per carat) to a private buyer against a pre-sale
estimate of $6.6 million to $8.8 million.




Chinese Retail Sales Grow 22 %

Chinese retail sales surged 22 percent in April from one year ago to CNY 814.2 billion
($116 billion) on a rise in food, jewelry and auto sales. Jewelry made of gold, silver and
precious stone rose 41 percent.

RBC Capital Markets cautioned that diamond prices would continue to rise as demand
outpaces supply. Short-term outlook for consumer demand is somewhat depressed, but the
longer-term outlook for purchases of diamond jewelry is good. Newly emerging
economies such as India and China, as well as the Gulf States, will augment strong
potential off-take in the U.S. Supplies of newly-mined diamonds will not be able to keep
up with growing demand, which means the price of diamonds must rise, and in particular,
prices of better quality diamonds.

Sovereign Wealth Funds to Further Stress the Dollar
The rise of commodity prices has led to soaring global sovereign wealth among exporting
nations that is creating fertile ground for a new generation of state-controlled funds that are
poised to favor riskier investments over the U.S. dollar. The idea is simple: Find
investment opportunities abroad to get rid of extra cash - usually U.S. dollars, because it's
the currency in which most exports are denominated - for assets that could bring in greater
revenues. While the change won't happen quickly, the long-term effects would have a
devastating effect on dollar exchange values. Brazil on Monday officially joined the new
class of sovereign wealth funds. Japan and India, Thailand, Nigeria, China and Russia are
all expected to be converting their U.S. dollars into riskier investments.
Speculation In The Diamond Market - Rapaport News Spring 08
The diamond industry is undergoing a period of great challenge and opportunity as a
rapidly expanding global economy creates unprecedented wealth. Demand for large, fine-
quality diamonds has increased significantly.

Over the past few years, while supply has remained stable due to natural scarcity. Large,
expensive diamonds have surged in a speculative spiral fueled by dealer expectations of
ever-increasing prices. Higher prices and scarcity have also encouraged conspicuous
consumption, whereby wealthy consumers want more diamonds as their prices rise.The
demand curve for the best diamonds has inverted, with higher prices increasing demand
instead of decreasing it.




 Surging global demand and a rapidly declining U.S. dollar have pushed commodity prices
to record highs, while destroying confidence in the dollar as the primary international store
of value. Over the past year, the major Indian, Israeli and Belgian trading centers have seen
a 10 percent to 15 percent decline in the dollar. Diamantaires, having lost confidence in the
dollar and expecting increasing prices for large diamonds due to a consistent imbalance
between supply and demand, now prefer to keep their wealth in diamonds instead of
dollars. This monetizing of diamonds is a rational development that is having a major
impact on diamond prices.
Colored Diamond Growth

"It sets them apart. Women love them because they are beautiful. Men love them because
they make a sound investment." In the past two years their value has rocketed, which
justifies why they are now top of the shopping list for the super-affluent in pursuit of the
exceptionally rare.

As a response to this coloured diamond fever, Cartier recently launched an eyepopping
jewellery range inspired by the brand's Indian gemstone heritage. The Inde Mysterieuse
collection features 34 whoppers, and the smallest piece - a pair of earrings featuring two
rose-cut yellow diamonds with brown diamond beads and drops - costs £169,000. Despite
the astronomical prices, it has already almost sold out.




"Coloured diamonds are about forever fashion," says Lucy Willis from Selfridges, who are
now selling coloured diamonds by Tiffany and Cartier for the first time in their newly-
opened Wonder Room in its Oxford Street store. But the best place to see the latest rocks
on- the-block is The Vault, a new gallery that will open at The Natural History Museum
this Wednesday.

The piece de resistance of the exhibition is the Aurora Collection, which features 296
naturally-coloured diamonds. "Most stones half as interesting are locked in a vault and
never see the light of day," explains curator Alan Hart. "This is without a doubt the best
coloured diamond collection you are ever likely to see" But, thankfully, you don't have to
be a film star or a millionaire if you want to do more than just look.

"Historically, diamonds are all about power," believes Carmen Busquets of Couturelab, a
fashion shop selling coloured diamond jewellery. "White diamonds have connotations with
engagement. Coloured diamonds give a show of individuality and independence. "Before,
if you wanted coloured diamonds you went to Cartier or Van Cleef and spent £1million.
"But recently, contemporary designers who work with the same quality coloured diamonds
are offering personalised designs on a much smaller budget. "Something to wear all day -
not just at night." Prices for her coloured diamond jewellery start at £8,000. Just in time for
your Christmas wish-list, we've compiled the Lifestyle guide to buying coloured diamonds.




What are they?

Out of 80,000 carats of rough diamonds mined every year, only 0.001 per cent have a
colour (that's one in 10,000). Their colour is the result of naturally occurring chemicals and
processes in formation. Yellow diamonds are the result of the presence of nitrogen. Blue is
an excess of boron. Pink and red are thought to be the result of manganese. Green
diamonds are caused by exposure to naturally occurring radiation from radioactive
elements such as uranium.


Colors

Stones are graded by their vivacity of colour. No two are the same, and often there is a
secondary as well as a predominant colour. The secondary modifying colour is described
using the suffix "-ish". So a "vivid greenish yellow" is a yellow diamond with green
overtones. When a diamond has two colours equally present, then both are named. All
diamonds are graded on a scale from D to Z. With white diamonds, D is colourless and Z
is bright yellow. As colour becomes saturated they become known as "fancy" diamonds
and graded from fancy intense to faint.

Least unusual (so least expensive) are pale grey, brown and black. Yellow and orange are
quite rare, while pink is rare. Rarer still are violet, green, blue and red.

"A fancy stone is about colour and consistency," says Tony Cox, designer at Cox & Power.
Mining News
De Beers Production -7% in 1Q08

De Beers rough diamond production fell 6.8 percent to 11.774 million carats in the first
quarter of 2008, as South Africa's power shortages affected the company's operations.
South Africa's mines were closed for six days in January due to power shortages in the
country, but the company has since installed its own generators and claims to be
operating at full capacity.

Strong Diamond Market Raises Prices at Petra Tenders

Petra Diamonds reported that the average sales value of diamonds mined at its South
Africa operations have increased in 2008 due to the strong market for rough diamonds.
The company reported that the average price achieved for diamonds mined at
Koffiefontein rose 18.6 percent to $484 per carat in the first four months of the year,
compared with the second half of 2007. The March and April Koffiefontein tenders
fetched an average $524 and $526 per carat respectively.


Auction News

The Geneva Christie's and Sotheby's auctions in mid May 2008 brought in a new record
for the spring auctions in Geneva, with sales of over 115 million francs. Nearly all of the
top lots sold, with strong activity at the medium level of the market and a wide breadth of
buying coming from around the globe.

The Christie's Dubai auction held at the end of April 2008 booked sales of over $20
million dollars, which is a sum already approaching the levels of New York and Geneva
even though the auctions in Dubai have only been held for a couple of years. Some of
the important results are listed below:
 City    Size            Color         Shape Price CHF
Geneva    1.59      Intense Yellow      Pear      39,322
Geneva    3.06      Intense Yellow      Pear      79,900
Geneva    5.06   Fancy Brown Orange     Pear      73,000
Geneva    3.84      Intense Yellow     Marquis    79,000
Geneva    4.17      Intense Yellow    Rectangle 109,000
Geneva    6.92        Light Yellow     Cushion    51,400
Geneva   10.05       Fancy Yellow       Pear     157,000
Geneva    3.19       Fancy Green       Cushion 361,000
Geneva    1.52   Intense bluish Green Rectangle 301,000
Geneva    3.07    Fancy orangey Pink    Heart    241,000
Geneva    2.28     Fancy Grey Blue      Heart    373,000
Geneva    12.2      Intense Yellow    rectangle 313,000
Geneva    6.82      Intense Yellow     Marquis   445,000
Geneva    21.4        Vivid Yellow      Heart   3,297,000
Geneva   13.39       Intense Blue     Rectangle 9,233,000

Geneva    3.72   Light pinkish Brown     Pear        56,200
Geneva   16.34       Fancy Yellow        Step       361,000
Geneva    2.02     Very Light Pink       Oval        49,000
Geneva    4.03   Fancy purplish Pink    Cushion     505,000
Geneva    8.66      Intense Yellow      Square      205,000
Geneva   40.74      Intense Yellow      Cushion    1,101,800
Geneva   41.73   Deep Yellow Brown       Pear       361,000
Geneva    6.26      Fancy Lt. Pink     Rectangle   1,673,000
Geneva   33.45      Intense Yellow      Cushion    1,169,000
Geneva    5.06   Vivid purplish Pink     Oval      2,681,000
Geneva   47.54      Intense Yellow      Cushion     833,000
Geneva    7.29   Light pinkish Brown     Pear       421,000
Geneva    3.73         Vivid Blue        Pear      5,201,000

 City    Size          Color           Shape Price USD
Dubai     3.01   Dark Orange Brown     Brilliant  $22,500
Dubai     9.08  Fancy Brown Yellow     Marquis    $61,000
Dubai    25.87 Fancy pinkish Brown     Brilliant $433,000
Dubai     8.86 Intense Yellow Orange   Marquis $217,000
Dubai    15.04 Light Orangey Yellow    Marquis $157,000
Dubai    41.49      Fancy Yellow       Cushion $735,400
The information in this newsletter is for entertainment purposes only. The information contained in these quotes is believed to be from reliable
sources. Pastor-Genève cannot be held liable for any misrepresentations on behalf of the sources we use. The quotes used only represent part of
the article. For full viewing of any article, please contact your advisor. Prices paid by the client will likely be higher than those paid at the dealer
to dealer level. Pastor-Genève has the right to accept or refuse purchase or sale instructions from its clients at any time whenever Pastor-Genève
at its sole discretion, deems it necessary for its own protection. Colored Diamonds are a long-term investment and are subject to price
fluctuations. Pastor-Genève cannot guarantee that past performance of colored diamonds will continue in the future and that a colored diamond
purchased from Pastor-Genève will provide a net gain. They are not as liquid as traditional investments. They are not necessarily appropriate for
every individual. Pastor-Genève is not an investment advisor nor are they licensed to give investment advice