FOR MANY people, a diamond is as much an investment as a bauble to flaunt. Even with retail diamond prices up 5 per cent to 10 per cent over the past year, sales in Hong Kong have shown no sign of flagging. The city ranks as the sixth-largest diamond market in the world, according to the Diamond Trading Company (DTC), the sales and marketing arm of the De Beers Group, the world's largest diamond company. Hong Kong's diamond mavens tend to be pickier than those in other places. 'Diamond jewellery is very popular in Hong Kong. In general, people in Hong Kong want relatively higher quality stones but every kind of diamond is available. Even teenagers wear them,' said Lavin Lam, business director in Hong Kong for DTC. In a sign of increasing consumer sophistication, many shops now provide grading reports, which include colour and clarity, for diamonds usually 30 points and up (a carat is 100 points). The whiter the stone and the fewer inclusions inside, the higher the grade. The report includes a diagram of the diamond, its significant characteristics and the four C's - cut, colour, clarity and carat weight. The need for a report is weighed against the price, quality and size of a stone. Tony Cheng, assistant manager in the executive office of Chow Tai Fook Jewellery, said: 'For stones that are smaller than 50 points, we don't really think a report is necessary.' A good quality 50-point diamond can cost from $10,000 to $30,000. Mr Cheng said not all customers wanted a report, but some 'buy with more confidence' if they had one. For stones larger than a carat, his company provides an internationally recognised report from laboratories overseas. Another guarantee of quality is DTC's Forevermark, a microscopic-sized icon inscribed on the top of the stone (about 1/500th the thickness of a human hair) assuring people that it is a natural, genuine diamond. Selected diamonds of 30 points and up carry the mark. Hong Kong is a test market for the programme, which began in September. 'The consumer response has been good,' said Ms Lam. '[People] are quite willing to buy and pay the premium, as they feel that the Forevermark gives them added reassurance.' Reported premiums for diamonds with the Forevermark range from an extra 10 to 15 per cent. Natural diamonds come in white and rarer colours such as yellow, pink, blue, green and brown. Usually a billion to three billion years old, diamonds form under tremendous temperatures and pressures about 80km below the earth's surface. Colour forms when impurities are present. Nitrogen, for example, creates yellow, boron makes blue and natural radiation damage can result in green diamonds. Stones can also be coloured using artificial processes. Coloured diamonds are usually more valuable because there are fewer on the market. At Chow Sang Sang Jewellery, yellow and pink diamonds offer a striking contrast to white. Prices for yellow stones start at $60,000 per carat, with pinks from $100,000 to $500,000 per carat, depending on the quality, said Winston Chow, deputy general manager. 'We only sell natural, non-treated fancy-coloured diamonds. There's consumer demand for them, but not on a daily basis,' he said.