PRESS COVERAGE
  • While most industries have struggled during the catastrophic COVID-19 pandemic, one sector has fared well, showing unusual resilience — the collectibles market. Expansion in the art and wine market will certainly continue when the pandemic ends, said Robert Sleigh, senior director and managing director of operations at Sotheby’s Hong Kong Ltd, on the sidelines of the roundtable. The pandemic not only has created a global health crisis, but has threatened the global economy with a grim recession. Everyone has felt the pinch of ever-shrinking disposable incomes and dampened purchasing power. But people’s penchant and enthusiasm for investment assets has remained high as more investors appreciate the reliable value gains and wealth-preservation attributes of collectibles such as art and wine. Asia saw HK$422.12 million (US$54.45 million) in wine sales in 2020, just slightly behind 2019’s HK$461.82 million. “It’s driven by a movement to a digital-first approach, with seven times more online sales in Asia than ever before and 80 recent of bidding globally taking place online,” Sleigh said. “Wine remains one of the most affordable asset classes.” Wine boasts a favorable supply-demand dynamic, in which wine is produced in a limited quantity and its price rises when it’s consumed while the demand remains intense. “Unlike financial instruments, wine quickly finds its consumable price rather than a trading or investment price, which we saw in the last global financial crisis,” Sleigh said. “At the top end, demand for the finest and rarest wine last year is as strong as it had ever been, with rarity and provenance still being the driving forces.” The insatiable demand for the rarest Burgundy from Asia’s top collectors has certainly been a key theme driving the fine wine market, he added. The lockdown has had people drink more wine at home than in restaurants, and therefore, wine lovers have had more money to spare for investing in fine wine as a collectible as opposed to splashing on a bottle in a high-end restaurant or bar, Sleigh said. “Unlike a traditional financial recession, there were no margin calls or need to liquidate assets for the most part,” which explains the resilience of the fine-wine market compared with overall volatility, Sleigh said. The trend of art investment has also resisted the economic downturn of the pandemic. “While there was a short lull in activity in the early days of the pandemic, where there was an expectation of ‘COVID pricing’, it quickly disappeared. Our clients made it clear that they wanted to buy and sell, and we were material in providing liquidity in the market, which was badly needed,” he said. Asian collectors, who account for over 30 percent of Sotheby’s worldwide auction sales, have proved especially resilient in 2020, Sleigh said. “The strong results (generated by Asian clients) have cemented the company’s market-leading position in Asia for the fifth consecutive year. The number of Asian clients bidding online was growing faster than anywhere else, more than doubling in 2020.” The digital innovations have played an overriding part in the collectibles market’s resilience. In Hong Kong, Sotheby’s has held 63 online auctions across a diverse range of categories from Chinese Works of Art, Contemporary Art to Jewelry, Watches and Wine, achieving a total of nearly HK$250 million, he said. Looking ahead, Sleigh is upbeat about the prospect for the collectibles market in light of the burgeoning and supportive digital tools and people’s sophisticated tastes. “The market will continue to grow but some of the changes will stay,” Sleigh said. “Reduced foot traffic caused by travel restrictions and gathering bans demand us to be more flexible and creative to engage potential investors, buyers and sellers.” One example, he says, is, “by bringing in and curating more online sales and virtual selling exhibitions, particularly for young collectors”, who are a rising cohort in Asia. Apart from the sale of art, wine and spirits, that of collectible luxuries, such as jewelry and watches, will be spurred by the convenience and immersive experience of online events, he said. heshusi@chinadailyhk.com
    2021-01-20
  • Less tension between China and the United States could be expected under the new US administration, according to Stephen A. Schwarzman, Chairman, CEO and Co-Founder of Blackstone. And vaccination will help shift the global economy growth trend. Schwarzman shared his ideas over a wide range of issues with Antony Leung, Group Chairman & CEO of Nan Fung Group during one-on-one dialogue at a virtual session in the 14th Asian Financial Forum on Jan 19. "There are still a variety of issues, particularly in the congress, where there are genuine differences between US and China," Schwarzman said, "However, I think the new administration is going to take a softer tone for places where we can work together." The two largest countries in the world, China and US, comprise between 35 to 40 percent of the entire world's economy. "To not to have these two countries working in a cooperative fashion seems exceptionally odd and unproductive for citizens of both of their countries," he said. He believes that "in areas in climate, health and terrorism, as well as some economic issues, there is a substantial overlap in the interests of these countries, and the interests in the world", so he finds that "it will be hard to imagine escalating tension". For the outlook on global economy, he predicts that Asia will do well, and the West will have a slowing of economy growth in the tough first quarter or two. "The good news, globally, is that we have vaccines," he said. Schwarzman point out that vaccines will change the global economy significantly in the second half of the year, in the conventional Western thinking, many people should be able to get vaccinated by the summer time with production in volumes. "Vaccines themselves are reasonably remarkable", he added. He also said that zero-interest rate mode in a number of economies cannot continue, as it never continued in history and is like "a penalty" to people who retire. Schwarzman mentioned that, with Leung's help, he set up a program between China, US and the rest of the world, bringing about 150 extraordinary students from around 40 countries to China because he wanted people to learn about China. Being active in philanthropy and other projects all over the world, he says that he doesn't feel being older than others, as age doesn't matter too much him for doing new things all the time in good physical shape. According to Leung, Schwarzman's first book, What It Takes: Lessons in the Pursuit of Excellence has been published in about ten markets around the world, including the Chinese mainland and Hong Kong. The author said after doing things in business, public service and philanthropy for over fifty years since he got out of school, he wants to make other people's life easier with what he has learnt. "Everyone's life has struggles in it, and it doesn't matter who you are," he said, "I had that myself." He wants to share certain principles with people. "For example, you have to work at things that you really enjoy doing," he said, adding that the odds of being great at a job that one doesn't really like is quite low. And he advised that people should change jobs if they are not learning something enough. "You should that look at ultimately always creating something that could be a wonderful thing." Having the will to win and be the best and hiring the right people are among his formula for corporate success. Being asked about how he wants future generations to remember him, he honestly said that he had no idea. "I do things that I think are absolutely good, and I do them because they are good and I help people. That's enough for me," he said.
    2021-01-20
  • Though there are more online exhibitions and auctions during the pandemic, it is still essential for new investors to attend art fairs, bid at auctions and visit galleries to avoid risky investments and to get the full experience of any piece of art, said Andy Hei, founder and director of Fine Art Asia and Ink Asia in Hong Kong. “The accuracy of appraisal and valuation directly impacts the risk of art investment. It is important for individuals to know that opinions and knowledge from the experienced experts are essential and crucial to avoid unnecessary risks,” Hei stressed. He also emphasized the importance of interacting with gallery owners. “There is so much history in art, especially antiques, and stories that are passed down to the current owner who can share with the potential buyer.” Hei is a professional art dealer with over 30 years of experience in the fine art market. He has organized 20 international art fairs in Hong Kong, including the only physical art fair in Hong Kong in November — Fine Art Asia 2020. Like any other market and industry, Hong Kong’s fine art market is struggling right now. COVID-19 presented many challenges last year, both locally and internationally; but many of the dealers, collectors and investors have not stopped seeking and buying, albeit at a more leisurely pace, Hei noted. “Although the pace is slow, we have proven that there is stability in Hong Kong’s art market,” he said. Fine Art Asia 2020 attracted over 8,000 visitors and received much positive feedback from exhibitors, artists and collectors. The few postponed auctions also reported strong interest, plus the private sales showed a steady performance, Hei revealed. “These events in 2020 demonstrate that the situation is better than we expected during this unpredictable pandemic,” he said. COVID-19’s impact was evident in the antiques and traditional art market, as transactions were slower than usual because of travel restrictions, which meant collectors were unable to visit galleries to study and appreciate the collections, Hei noted. Usually, antique collectors prefer to physically visit the gallery to study the collection themselves first, because both physical viewing and somatosensory are important to them before making a purchase, he said. “Antiques come in various unique forms and shapes as they are mostly one of a kind, so without touch and sense it is hard for the collector to know, and this cannot be replaced by online or mobile platforms,” he said. “But for contemporary art, it is easier to show through high-resolution images and (you) encounter less issues in the authenticity, unlike antiques.” For antique art dealers, if the market is not prosperous, they don’t mind waiting until the economy recovers, when prices will be higher, he said. Amid COVID-19, online platforms thrived rapidly last year, and the idea of “collecting art” and “cross-culture collecting” are becoming trendier, Hei said. Noting that cultural exchange has been a huge part of Fine Art Asia, Hei said they have been putting an emphasis on cross-collecting. “We are the only fair in Asia to showcase a wide range of collectible fine art from Asia and the West. With cross-collecting, collectors are exposed to different items and seek investment opportunities in different ranges of art.” Hei said he doesn’t think there is a “correct” way to invest, because everyone’s perspective and value of art is different. “Some buy because they like it, some buy because they feel it will increase in value and some buy because of (the) in-depth history behind it. No matter what (the) reason, art is a promising investment and something for everyone to appreciate,” he said. heshusi@chinadailyhk.com
    2021-01-20
  • From fine art to bottles of wine, and limited-edition sneakers to luxury watches, collectibles can be turned into investibles in the post-pandemic world. But it requires patience, knowledge, experience and an open mind before embarking on such an interesting and potentially profitable journey. Industry leaders and experts provided these insights on Tuesday at China Daily Asia Leadership Roundtable themed “Assessing Alternative Investments in Art and Wine”, held as part of the 14th Asian Financial Forum. “Amidst times of uncertainties, alternative investments like art or wine stand as relatively wise choices at the moment,” said Andy Hei, founder and director of Fine Art Asia and Ink Asia Hong Kong. “But it takes a very long term in practice.” What makes some collectibles savvy investments is a world of appreciation they offer. Drawing on his yearslong experience as a well-regarded second-generation dealer in classical Chinese furniture, Hei noted that the return of value in art could reach double digits. But it needs patience. “Basically, it’s time that will tell,” Hei stressed. “And the knowledge and experience it requires are also beyond imagination. There is no shortcut.” Robert Sleigh, senior director and managing director of operations at Sotheby’s Hong Kong, is a firm believer that art and wine have more integral roles to play in the post-pandemic era. “Looking ahead, traditional areas of collecting for investment, be it paintings, contemporary art, modern art or impressionist art, will continue to go quite strong. At that point, it is a question of knowing the current market, knowing what the current worth might be and looking at a long term, rather than a short-term growth on that and appreciation of that,” Sleigh noted. While investing in collectibles can be a great way to diversify portfolios while exploring one’s own interests, it does have its drawbacks. Patience is crucial Adriano Picinati di Torcello, director of advisory and consulting of global art and finance coordinator at Deloitte Luxembourg, reminded investors that one of the risks when it comes to making investment in art and wine is illiquidity. “If you look at art or collectibles in general, investors have to consider that collectible assets tend to be very illiquid. Also, there are a number of other issues that investors have to look at, such as authenticity and counterfeit,” said Torcello. “If you would like to consider investment in those categories, do analyze and understand those risks and really get proper advice, but definitely also enjoy, especially if you’re talking about, for example, fine art,” he said. “Investing in passive investments such as art and wine should be done with careful consideration and a clear plan,” said Johnny Hon, founder and chairman emeritus of Global Group International Holdings Ltd. “For art, in particular, it’s a long-term thing. One has to be prepared to hold the art for five to 10 years or even longer in order to build a meaningful collection.” As the pandemic is changing how people live, work and play, the market for collectibles is also embracing trends that will essentially turn the “new normal” into the “new future”. Sleigh highlighted Scotch whisky, Japanese whisky, China’s Maotai baijiu as markets with significant growth. The sneaker stands as a new collectible, which Sleigh described as a market that is “really something”. Technology plays a new role Torcello said the power of technology to help reduce investment risks and increase liquidity of collectibles merits great attention. There are also many discussions around fingerprinting, blockchain and tokenization of certain categories of collectible assets, he added. Having seen technology wave its magic wand in many areas during the pandemic, Hon emphasized that “one should be open-minded in looking into digital arts and other collections”. “The pandemic has motivated the art market to make a major technological shift toward the online sphere, and online sales are driving the current market, which has also shown that younger generations are becoming keener to collect and invest,” Hon said. The rapid development of blockchain and augmented reality technologies can be the next big things to reshape the art space. One may have a visual art that uses a smart contract on the blockchain to lease it out to someone who displays it for a specific period, or one can use AR to bring a tangible painting to life, he noted. “While all of these changes may present opportunities, I would not recommend rushing in to buy art merely as an investment. It is important to discover your passion and what you really enjoy about artworks,” Hon stressed. Torcello added, “Art and wine are a great way to connect, establish and increase relationships with your clients on very emotional and passionate assets.” Contact the writers at sophia@chinadailyhk.com
    2021-01-20
  • Hong Kong is betting big on a world of opportunities, and will shake off the burdens of COVID-19 by capitalizing on its robust financial system and unique status as a gateway for the Chinese mainland, heavyweights told the 14th Asian Financial Forum. Speaking via video on the second day of the 14th Asian Financial Forum on Tuesday, Hong Kong Financial Secretary Paul Chan Mo-po said he believes the city’s economy may pick up speed in the second half of this year upon mass vaccination programs. He cautioned that Hong Kong’s economy in the first half of 2021 will still be clouded by the COVID-19 pandemic, but he was optimistic about the long term. “Hong Kong continues to be the business and investment bridge that links the Chinese mainland and overseas countries, and the city also is the important choice for mainland and overseas companies for listing their shares,” Chan said. “As the government reforms its listing regime and enlarges the universe of the two stock connect programs, linkages between Hong Kong and mainland capital markets are further cemented, thus enhancing the liquidity position of those listed companies,” the finance chief told forum participants. On Tuesday, Hong Kong’s Hang Seng Index rose 2.7 percent to hit a 20-month high of 29,642 points, with mainland traders buying a net US$3.4 billion of Hong Kong stocks. Daily turnover in the city rose to a record US$38.9 billion. Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said in her opening speech to the forum on Monday that Hong Kong’s fundamentals remain strong amid the challenges of the COVID-19 pandemic. “Hong Kong’s financial system has demonstrated its strengths and resilience,” Lam said. “Our financial markets continue to operate orderly, and that includes the Linked Exchange Rate System. The Hong Kong dollar to the US dollar exchange rate has stayed on the strong side, reflecting investors’ continuing confidence in our financial markets. “Thanks to our ‘one country, two systems’ framework and long-standing advantages, including an internationally aligned regulatory regime, the rule of law, a simple and low tax system and the free flow of information and capital,” the Hong Kong leader stressed, “we continue to be an ideal gateway between the mainland and the rest of the world. That very much includes our role as both a conduit for foreign capital investing in the mainland and the springboard for mainland companies looking to international markets.” Lam said she has high hopes for the widespread use of vaccines and the Chinese mainland’s economic ascent to accelerate the global recovery. Last year, the global economy plunged roughly 4.4 percent, while Hong Kong’s GDP is expected to decline by 6.1 percent. In his keynote speech on Monday, Guo Shuqing, secretary of Party Committee of the People’s Bank of China and chairman of the China Banking and Insurance Regulatory Commission, said Hong Kong has played a pivotal role in every stage of the country’s development in the past 40 years. Hong Kong will regain its vitality in the new development stage of China and Asia, he said. The city is vital to the country’s new development pattern of “dual circulations”, and can continue to play an important part in the development of the Guangdong-Hong Kong-Macao Greater Bay Area, Guo said. Also speaking at the forum, Jin Liqun, president and chairman of the Asian Infrastructure Investment Bank, said the global economy has been dragged down by the pandemic, and the current economic downturn is not a normal business cycle. He believes the pandemic will be gradually controlled this year, which will bring further impetus to economic recovery. Jin called for enhanced cooperation among global economies, and more investment in scientific research, as the pandemic reflects a fragile global economic chain, and healthcare and digital technology is becoming more important. The 14th AFF was jointly organized by the Hong Kong Special Administrative Region government and the Hong Kong Trade Development Council. More than 5,000 global policymakers, financial experts, business leaders, economists, investors and entrepreneurs from some 70 countries and regions signed up to participate online for the first time to examine opportunities and challenges for finance, investment and business in the new global economic landscape. Oswald Chan and Luo Weiteng contributed to the story. heshusi@chinadailyhk.com
    2021-01-20
  • Remittances among services improved in pandemic, aiding nations, forum told The coronavirus pandemic has spurred advances in financial services, and the benefits of such innovation are being felt in the Pacific island nation of Tonga. For Leta Kami, CEO of the Tonga Development Bank, digital banking service has provided huge support for Tongans working overseas during the pandemic. "The Kingdom of Tonga is highly dependent on remittances," Kami told a panel on the second day of the Asian Financial Forum, on Tuesday. Tonga is one of the world's most remittance-dependent nations. They make up about 38 percent of its GDP. "With the pandemic hitting us all by surprise last year, we have gained more traction with the diaspora (as) they were looking for online digital banking (services) to support them during border closures and lockdowns," said Kami. The bank's innovative cashless remittance service, launched in New Zealand and Australia, has received good feedback. The pandemic spurred innovation and transformation in industries, especially in banking, providing the sector an opportunity to promote financial inclusion through digital services and products, said industry experts in different sessions of the two-day event. "Financial technology has created significant opportunities for the unbanked population around the world," said Alfonso Garcia Mora, vice-president for Asia and Pacific at the International Finance Corporation. He said the outbreak has increased the use of digital channels and accelerated the innovation of disruptive solutions, especially digital banks. With digital financial services now available in more than 100 countries, Garcia Mora said: "Many countries in the Asia Pacific region are encouraging the growth of digital banks and products, and fully digital banking services are also operational in a number of countries." In a panel session on "The Future of Digital Currency", Bank of China Chief Scientist Guo Weimin showed the audience a digital yuan hard wallet, also called a digital currency chip card. It was used in a large-scale test of China's official digital currency in Beijing at the end of last year. "The feasibility of digital currency has been proved in many scenarios," said Guo. "With the increasing support from the central bank and local governments, it will receive wider acceptance." Future prospects Many discussions were held over the costs of digital currencies, Guo said. The key focus on the new technology should be its effectiveness, especially in terms of the traceability of money flows. Sebastian Paredes, CEO of DBS Bank (Hong Kong), said the bank received about 1,400 requests to open an account within a month after it launched a digital banking service last year for small and medium-sized enterprises, or SMEs. In a panel session entitled "Dialogues for Tomorrow: The Future of Banking", Paredes said SMEs have been among the hardest-hit sectors in the world. "In Hong Kong… the SMEs have been particularly suffering," he said. Hong Kong has around 340,000 SMEs which represent 98 percent of the city's total business community, he added. The Secretary-General of the Organisation for Economic Co-operation and Development, Angel Gurria, said the OECD's cooperation with China on services trade has promoted an open market for trade and investment. "China is also a regular contributor to the OECD Trade in Value-Added database, and it's integrated into the OECD Trade Facilitation Indicators," he said. In the new year, he said a major lesson from 2020 should not be forgotten. "The only way out of this crisis is by working together." He promised the OECD will continue to work with ASEAN, APEC, all Asian partners and stakeholders to build a more resilient, sustainable and inclusive future. Alexis Ohanian, co-founder of Reddit, pointed to technology acceleration in businesses, especially those planning their initial public offerings. He told a keynote session that there will be huge opportunities for the travel and food sectors this year. Rama Sridhar, executive vice-president of Mastercard's Digital and Emerging Partnerships and New Payment Flows unit in the Asia-Pacific, said partnerships of all players, including traditional and digital financial service providers, will be a significant enabler of success in financial inclusion. Xu Weiwei contributed to this story. kelly@chinadailyapac.com
    2021-01-20
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