* Likely to list in mid-June - sources
* IPO funds to be used for Asian expansion
* Offering comes after 15 pct rally in HK market
By Elzio Barreto and Denny Thomas
HONG KONG, May 3 Graff Diamonds, which sells
"the most fabulous jewels in the world", has received the green
light from the Hong Kong bourse for a market debut that could
raise up to $1 billion, sources said, paving the way for growth
in luxury-hungry Asia.
Three sources with direct knowledge of the plan said Graff,
given the blessing by the HK exchange on Thursday, could start
drumming up demand for its shares from investors as soon as next
week, though there was no timetable for pre-marketing.
London-based Graff, whose giant gems and rare diamonds have
been worn by celebrities from Imelda Marcos to Oprah Winfrey,
has said it planned to use the funds to open new stores in key
locations and build its inventory to keep up with its customers.
Graff's sales are split equally between Asia, Europe and the
United States, with growth in Asia far outpacing other markets,
founder Laurence Graff told Reuters in a November interview.
Graff joins French cosmetics company L'Occitane,
Italian fashion house Prada and luggage maker
Samsonite in looking to tap booming demand for luxury
goods in China and raise brand awareness, and also paves the way
for others eyeing Asia's appetite for gems.
Entrepreneur Beny Steinmetz has said he could seek a Hong
Kong listing for his Octea diamond operations, which include the
Koidu mine in Sierra Leone, later this year.
The luxury goods industry has been performing well despite
economic uncertainty around the world, and that has been
reflected in strong demand for shares in listed companies.
Last month, Italian cashmere house Brunello Cucinelli
and high-end luggage maker Tumi Holdings both
saw their stock surge on their Milan and New York debuts
respectively, while shares in luxury brand Michael Kors Holdings
have more than doubled in price since their Dec. 15
"Luxury goods have proved slightly protected from wider
consumer sentiment," said one equity capital markets banker.
CLSA Asia Pacific Markets estimated Chinese demand will
account for 44 percent of the global luxury goods market by
2020. De Beers, the world's largest diamond producer by value,
forecast the world's No.2 economy will account for 16 percent of
global diamond demand by 2016, up from 6 percent in 2009.
The Graff IPO will also come on the back of a 15 percent
jump in the benchmark Hang Seng index in 2012.
The IPO market in Asia-Pacific has had its slowest start in
about four years, with overall equity market activity down about
a fifth from last year.
Two sources said Graff could list in the second week of
June, though no final decision had been made.
Credit Suisse, Deutsche Bank, Goldman
Sachs and Morgan Stanley were hired as joint
global coordinators on the IPO.