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Posts Tagged ‘emerging art market’

Crisis to impact art prices, number of Asian collectors increases – Business Times

Posted by artradar on November 4, 2008


ART PRICES FINANCIAL CRISIS

With fear at near panic levels recently in the stock market, it would seem almost anomalous that life goes on in some segments of alternative investments. No, we’re not talking about hedge funds or commodities, both of which suffer the whiplash dealt by severe market plunges. Instead, welcome to the rarefied world of art collection and investment. Proponents of the segment argue that art, being a real asset and devoid of the mind-numbing complexity of derivatives, should retain its sheen as a ‘passion’ investment.

Art is tangible with inherent value says Christie’s

Says auction house Christie’s president (Asia) Andrew Foster: ‘We stand in a curious position. Art is a very real and tangible thing. Clients agree that art has inherent value. So you start with the proposition that it’s not a highly leveraged investment. That’s almost refreshing now.

‘That doesn’t mean prices don’t fluctuate, but value is agreed upon and inherent, and it springs from cultural and global trends more than trading multiples.’

Christie’s confident about November Hong Kong sales

Christie’s recently exhibited highlights of its upcoming Fall 2008 auction in Hong Kong, to take place at end-November. ‘Our sales are nearly two months down the road; we’re confident markets will calm down,’ says Mr Foster.

Art, however, isn’t that impervious to the fallout from the evaporation of trillions of dollars in stock market value. Nor is it immune to the belt tightening that has ensued as individuals brace for more difficult economic conditions.

But recent Borobodur and Sotheby’s Asian auctions disappointing

Two auctions of Asian art last weekend, for instance, fell short of pre-sale estimates. Borobudur Auction’s two-day sale of Chinese and South-east Asian art fetched nearly $10 million, compared with pre-sale expectations of $18 million.

The recent Sotheby’s sale of contemporary Asian art in Hong Kong was also disappointing, with a number of works unsold or drawing bids below reserve prices.

Citi Art Advisory – stock market drop causes short term bounce and longer term fall

Citi Private Bank’s art advisory service senior vice-president Suzanne Gyorgy says that a prolonged economic downturn will take its toll. ‘A downturn in the equities markets often initially causes investors to turn to tangible assets. The art market can benefit from this turn to alternative investments with a bounce in the value, counter-cyclical to the equities markets.

‘However, a prolonged economic downturn in the equities markets will first result in a softening of the real estate market which is then followed by a downward adjustment in the art market.’

Asia undergoing structural change: more collectors

Still, the last few years’ robust pace of wealth creation is likely to have expanded the catchment of wealthy individuals globally for whom art is a passion, particularly in Asia. Christie’s own Asian sales are a testament to this. Last year, the firm’s Asian art division reported sales of US$654 million, a 49 per cent rise from 2006. Growth has been at a strong double digit clip since 2004.

Asian art showed broad uptrend even in Asian financial crisis

‘What is interesting about Asian art, from the period which includes the Asian financial crisis and a downturn in the West . . . global Asian art grew every year through that period. The broad trendline is up. This isn’t a surprise, because all the long-term economic indicators and information about this century is that it will be an Asian century,’ says Mr Foster.

He concedes that wealthy individuals may have sustained substantial losses in equities in recent months. ‘People need to recognise the losses in the context of the gains in the last three to four years. We’re talking about a tremendous, unprecedented increase in global wealth. It’s natural to have a correction.’

Citi Art Advisory predicts softening for mid value works

Citi’s Ms Gyorgy agrees. ‘Today, with the vast amount of newly created wealth across the globe, even after this recent economic turmoil, we are likely to continue to see record prices for the remaining top tier master works . . . by sought after artists, but expect to experience a softening in value for mid-level works.’

Art captured second largest share of ‘passion’ dollar of rich

Passion investments merited a highlight in Merrill Lynch and Capgemini’s 2008 World Wealth Report, which found that art captured the second-largest share of the global wealthy’s passion dollar at 15.9 per cent, after luxury collectibles (16.2 per cent). Among the well-heeled in Asia-Pacific, art’s share of their passion dollar was 13 per cent.

The most frequently quoted indicator of art’s investment returns is the Mei Moses Fine Art Index. Its index for all art for 2007 rose 20 per cent, a performance only surpassed by some of the annual returns achieved in the art bubble years of 1984 to 1990, it says on its website. This dramatically outpaced the 5.5 per cent achieved by the S&P 500 total return index. It was, however, outpaced by gold which rose over 30 per cent.

In the most recent five and 10 year periods, art trumped stocks, according to the index. Art returned 16.2 and 10.3 per cent per annum in the respective time periods, compared with stocks’ returns of 12.7 and 5.9 per cent, respectively.

1985 to 1990 art index up 30% per year then shed 65% 1990 to 1995

Yet art, too, has its boom and bust cycles, as Michael Moses, the creator of the index, told Reuters earlier this year. From 1985 to 1990, Western contemporary art values rose at an annual compound rate of 30 per cent, before shedding 65 per cent in the next five years, he said.

Now, one of the most frequently raised questions is whether there is a bubble in contemporary art, particularly by Chinese artists. Ms Gyorgy says: ‘In this economic climate, the portion of the emerging art market that has recently experienced huge jumps in value on the high end are poised to experience the greatest price correction.’

Only some artists survive a pricked bubble

She says that a similar spike in value and dramatic correction occurred in the 1980s and early 1990s for many ‘newly minted art stars’. ‘With the passing of time, a number of the 1980s artists have regained their value and place in the art market, and some have not survived the test of time. I expect we will see art market history repeating itself.’

Citi advises clients to do their homework, talk to experts and collectors, and to research great collections. Buyers should also learn how to evaluate the condition of art works, visit auctions and learn how to negotiate with private dealers.

New art fund launched to focus on emerging art markets

Art funds are also an option. Meridien Art Partners is working with Calamander Capital to launch the Emerging Art Market to invest in contemporary art, scouring the markets of South-east Asia, Vietnam, Russia and the Middle East. The fund has so far raised about US$10 million and the partners will be gearing up to market the fund to European, Russian and Middle Eastern clients as well.

Ultimately, you must love the piece that you buy. As Citi says in its art advisory material: ‘We do not recommend that clients buy art purely for investment. . . There are many other investment vehicles that give higher or more predictable returns than art.

‘The art market is a fickle place, but art can be a good investment if you take a long-term strategy, do your homework and are well advised.’

This article was first published in The Business Times on October 18, 2008

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Posted in Advisors, Art Funds, Art Index, Auctions, Collectors, Globalisation, Individual, Market watch, Professionals, Recession | Tagged: , , , , , , , , , , , , , , , , , , | Leave a Comment »

Buying frenzy lights up Iranian art market

Posted by artradar on July 10, 2008


Source: Middle East Times

 

 

 

IRANIAN ART MARKET The prices have soared by a factor of 20 within two years, the galleries are packed with prospective buyers and the works are both modern and daring, but this is not a description of the art scene in New York, Paris or London, but Tehran. Far removed from the increasingly tense standoff over the country’s nuclear programme and domestic frustration because of rising inflation, Iran’s best known artists are enjoying a huge rise in demand for their work.

 

Interest in buying art increased in last 2 years

“For 30 years no one was interested in us. Today everyone wants to buy,” Parviz Tanavoli, 72, Iran’s best known sculptor, told AFP. “People have money. They used to invest it in property. Today they see there are other places to put it.”

A 1975 sculpture by Tanavoli, “The Wall (Oh Persepolis),” sold in late April for 2.84 million dollars at a Christie’s auction in Dubai — the highest figure ever reached for a contemporary Iranian work.The 1.8-metre-high (6-feet) bronze block was typical of Tanavoli’s intricate style, partly inspired by the ancient art of the Achaemenian empire, and praised by experts as being more than worth its stratospheric price.

The younger artist Farhad Moshiri, known for his bright three-dimensional paintings of jars emblazoned in calligraphic Persian script, has seen his canvases sell for up to 750,000 dollars.Lesser known artists have seen their work sell at the numerous galleries in upmarket northern Tehran for between 20,000 and 30,000 dollars. Just two years ago the asking price would have been more like 2,000.

 

More buyers for investment

The boom is another example of the striking gulf between wealth and poverty in Tehran, where the rich can afford imported cars and luxury apartments while the worst off struggle to make ends meet. Despite the rise in prices there are more buyers than before. Many people want to make investments,” said Shahnaz Kansari, who heads the Moon art gallery in Tehran.

Amir Hossein Etemad, of the Negarkhaneh Etemad gallery, warned: “I’m worried that this will prove to be nothing more than a speculative bubble that will explode. “But it’s true that the prices were very low before.”

Abstract tendencies have long appeared the most popular in modern Iranian art, possibly because of the strict rules governing the portrayal of the human form in an Islamic state. Iranian visual art also crosses genres in unusual ways: Cannes prize-winning Iranian film director Abbas Kiarostami is also a renowned artist whose stark photography is a major draw at Tehran galleries.

 

Iranian art crosses genre boundaries

One of the fathers of Iranian modernist painting was the poet Sohrab Sepheri, considered one of the greatest of all Iranian modern writers, whose abstract landscapes are true collector’s items.”We are at the beginning of the road. More and more there are individual exhibitions by Iranian artists abroad,” said the painter Farideh Lashaie.”Iranian culture used to be known abroad from the names of ancient poets like Hafez, Ferdowsi and Rumi. But painting and contemporary sculpture also have something to say.”As with cinema, people did not expect to see paintings and sculptures like this coming from Iran. Perhaps this explains their success.”

© 2008 Agence France-Presse

Image details: Iranians visit an exhibition by female artist Golnaz Afruz at the Mah Gallery in Tehran AFP

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Posted in Iranian, Market watch, Sculpture | Tagged: , , , , , , , , , , , | 1 Comment »