Flawless blue diamond a $9m 'bargain'

HONG KONG - Alisa Moussaieff, founder of Moussaieff Jewellers, believes she snapped up a bargain by paying HK$49.9 million ($9.1 million) for a 5.16 carat blue diamond at a Hong Kong auction.

Moussaieff, 80, says the fancy-vivid, internally flawless gem has a market value of about US$1.5 million ($2.1 million) per carat and that she would have raised her bid if a rival bidder had persisted.

A blue diamond of that size and calibre is so rare that it's worth about US$2 million a carat and high-street stores like Moussaieff could ask US$3 million, said Donald May, a Hong Kong-based jeweller who was also at the sale. A carat is a fifth of a gram.

"It's a bargain and I got it at this price because everyone was asleep," Moussaieff said.

Her London-based boutique will change the gem's mounting and offer the stone "to discerning clients, possibly in Asia," she said.

Asian buyers, especially mainland Chinese, have bought some of the most expensive gems at auction in recent years.

For Christie's International, Sotheby's top rival, Hong Kong has outsold Geneva and New York for two years as mainlanders park their growing wealth in rare art and gems.

The auction record for a blue diamond was set by Hong Kong property tycoon Joseph Lau in May with his purchase of a 7.03-carat gem in Geneva for 10.5 million Swiss francs ($13.8 million).

On Wednesday, Sotheby's sold a record HK$409 million of jade, diamonds, pearls and other gems to a filled room of about 150 bidders as auction-house staff fielded calls from phone buyers.

"Prices are very strong and we see good demand from Asian buyers," said May.

Mainland Chinese bidding on the blue diamond was scarce because few understood that type of gem, said May. They also preferred colours considered lucky, such as red or pink.

- BLOOMBERG