March 24 (Bloomberg) -- A necklace with a 40-carat oblong diamond is the centerpiece of 225 items of jewelry to be auctioned this weekend in Singapore, home to the world's fastest-growing number of millionaires.

The necklace, which also contains 50 smaller diamonds, may fetch S$600,000 ($370,000), said Ari Taibel, 36, director of First State Auctions, which is running the sale. He declined to disclose the name of the seller.

``Singapore is an ideal location for us to host the auction because of the presence of many affluent Singaporeans,'' Taibel said in an interview. First State, Australia's biggest jewelry auctioneer, held its first Singapore sale on Jan. 22, including a six-carat diamond.

The city-state of 4.35 million people had 48,500 people with assets of more than $1 million at the end of 2004, up 22 percent from a year earlier, according to the 2005 World Wealth Report by Merrill Lynch & Co. and Cap Gemini SA. Singapore imported S$936.7 million worth of jewelry in 2004, up 25 percent from 2003, according to figures from IE Singapore.

The largest diamond ever to go up for auction was a 407.48- carat colored diamond which failed to sell in New York in 1988. The bidding at Christie's International stopped at $12 million, short of the owners' expectation. A carat is one-fifth of a gram.

Record Rock

The world's most valuable jewel to be sold at auction was the 100.10-carat flawless diamond, which was sold for 19,858,500 Swiss francs ($15 million) in Geneva in 1995, according to Guinness World Records. It was bought by Sheikh Ahmed Fitaihi, for his jewelry shops in Saudi Arabia.

The 40-carat white solitaire diamond on sale in Singapore has a slight yellow tint and is cut in emerald-style and set in a white 18-carat gold necklace. Bids may start at S$300,000 at the auction in the Hilton Hotel on Sunday, Taibel said.

The total value of the items in the auction is about S$2 million, including an Australian South Sea pearl necklace valued at more than S$50,000 and a 15 carat-Colombian emerald set in a necklace, according to Taibel.

Pure diamonds -- colorless carbon crystals -- are the hardest known natural substance, typically formed in molten rock beneath the earth's surface billions of years ago. Colored diamonds occur when traces of other elements, such as boron, nitrogen and hydrogen, are found within the gems. Only one colored diamond is mined for every 10,000 white diamonds, according to the London-based Natural History Museum.

To contact the reporter on this story: Yoolim Lee in Singapore at yoolim@bloomberg.net

Last Updated: March 24, 2006 03:25 EST