Trading in diamonds has been for centuries a manual, face-to-face business but that's starting to change with the launch of a new electronic exchange in Singapore.

Trading began yesterday on a new Singapore exchange focused on diamonds amid hopes that a more liquid market in such gems will raise their investment appeal at a time of continued interest in hard assets.

The Singapore Diamond Investment Exchange, or SDiX, said trading started on what it said is the world’s first and only commodity exchange for physically settled diamonds. The SDiX platform aims to standardize global trading in diamonds as an asset class.

For years, such trading was seen as out of reach because with diamonds, each gem is subtly distinct from others, lacking the standard features and weights associated with gold and silver. For some time, diamond trading has been handled manually in person-to-person trading, rather than via an electronic platform.

“The SDiX represents a tectonic shift in how diamonds are traded. By providing the first ever transparent and open price discovery mechanism for diamonds, the exchange unlocks a major opportunity for investors to trade diamonds as an asset class,” Alain Vandenborre, executive chairman and founder of the Singapore Diamond Investment Exchange, said.

Interest in diamond trading has grown at a time when hard, or “real” assets such as gold, fine art, classic cars, fine wines and other collectible stores of value have thrived because of economic uncertainties and a desire to spread risks.

The SDiX is comprises an electronic trading platform, a depository that enables the physical settlement of diamonds, and a global network of service providers. Firms involved in the industry include GIA, the diamond grading institute; vaulting and logistics provider Malca-Amit; and Standard Chartered Bank, which will provide banking services and facilitate the cash settlement of transactions.

SDiX has launched with broker members across Singapore, Hong Kong, London and Dubai. Trading hours are between 14:30PM SGT/ HKT and 18:30PM SGT/ HKT to allow global traders to take advantage of the SDiX platform, a statement from the exchange said.

The exchange said that in the short run, it wants to support a vibrant spot trading market, with other products such as exchange traded funds and derivatives coming down the pipe in due course.

SDiX is backed by global investors including Vertex Venture Holdings, the Asian venture capital firm and a wholly-owned subsidiary of Temasek Holdings, Singapore’s sovereign wealth fund.  Early investors include investment figures such as renowned hedge fund manager, Jim Rogers.

Single stones and baskets can be traded electronically on a price/time priority in a continuous market, and buyers can place indicative price bids by diamond category. All stones traded on SDiX are GIA-graded and buyers of single stones can examine certifications directly through the platform. All baskets have an identical number of stones and total weight, and contain stones of identical cut, clarity and colour.