Forbes reports billionaire investor George Soros is placing a very particular bet on gold: he’s reportedly buying $40 to $50 million in shares Chow Tai Fook, a Chinese jeweler that's bigger than Tiffany's. The company is hoping to raise $2.8 billion on the Hong Kong Stock exchange when it lists in a fortnight's time.
Bloomberg reports the offering by the Hong Kong-based jeweler with more than 1,400 outlets in China will test investors’ appetite for luxury goods manufacturers. Founded in 1929 in the southern Chinese city of Guangzhou, the company was named after founder Chow Chi Yuen and “Tai Fook” means fortune, prosperity and luck in Chinese.
In the first quarter, Soros sold the vast majority of his $800 million gold holdings in exchange traded funds and shifted his investments into gold companies, a move seen by many at the time that the gold investment boom may be coming to a close after 11 straight years of gains.
MINING.com reported earlier this month consumers made the most of the dip in the price of bullion and mainland China’s gold purchases via Hong Kong hit a record 56.9 tonnes in September, a sixfold increase year-on-year and up 30% from August.
Quarterly data from the Hong Kong census and statistics office showed the Middle Kingdom imported about 140 tonnes of gold via Hong Kong in the three months from July to September ahead of the festival season, more than the roughly 120 tonnes for the whole of 2010. GFMS, a leading metals researcher, forecast that this year Chinese jewelry consumption will climb by 15% in volume terms.
Earlier this month Graff Diamonds, the jewelry retailer whose founder twice set records buying gems at auction, said it plans to use funds from its proposed $1 billion share sale to add stores in Asia as the region’s demand for luxury goods grows. Sales of luxury items in China will more than double to about 180 billion yuan ($28 billion) in 2015 from last year, McKinsey & Co. estimates.
Image is courtesy of the World Economic Forum.