Dear Clients and Friends,
A very strong third quarter for the market and Spink
Dare I suggest that the past three months at Spink have seen more action than any other auction house in London – certainly in terms of breaking records? We witnessed the most remarkable fortnight of coin auctions in September, with well over £4mn and 22 world records achieved by the Spink Coin Department. The top seven lots of the Coinex fortnight were hammered on the Spink block, including a new house-record for a coin set on the night of the Horace Hird Collection of Tudor, Stuart and Commonwealth Gold Coins and Patterns, with 21 world records set over 52 lots totalling £2.81mn. Simply put, half of all the coins sold during the Coinex week in London were sold by Spink – a first I believe. Quite a start to the season!
This was immediately followed by our exhibition of artist Ann Carrington’s work, which kicked off in style with a VIP reception in our London gallery on 16th September. Guests mingled with the artist and heard first-hand about the inspiration behind some of her pieces, while admiring her work up close and purchasing their dream piece. Ann is also more than happy to create a special piece for your favourite collectable items; if you are interested, please feel free to contact me. I am already doing mine with the Type Blanc, my favourite stamp. Visitors to Stampex were also able to view Ann’s work, as after a two-year break the show finally went ahead in September. Hundreds of collectors took the opportunity to visit the Business Design Centre in Islington and catch up with friends and fellow collectors, at which SPINK (as main sponsor of the show) were proud to host a variety of talks and events, taking the prize for best dressed stand to boot. In this day and age of digitalisation, Spink and I cherish the direct face to face contact and we will continue relentlessly to work on those special moments where we can all interact and have fun.
October saw Spink Books author Richard Abdy win the inaugural ANS Collier Prize for his outstanding Roman Imperial Coinage II.3: From AD 117 to AD 138 – Hadrian. Many congratulations to Richard on his win. The Stamp team were in attendance at the Salon Philatelique d’automne in Paris which ran in to early November, where another flagship Spink book, the Spink Maury Catalogue de Timbres de France, was extremely well received by collectors for its unique level of detail.
As you will have noticed from the cover of this magazine, November saw a new departure for Spink, and a new collaboration with Cask 88, as we kicked off our whisky cask e-auction in style with a tasting for VIP guests in the Spink Gallery on the 16th. The evening was a resounding success, and I am pleased to say that there is still time to bid in our e-auction – even though all lots are already covered, 20 days from closing the sale.
Why not buy that ultimate Christmas present for the whisky-lover in your life? For further details please see our Cask 88 special feature, and a roundup of the tasting in London News. I am particularly thrilled by this new venture as Spink sold the first cask ever sold at auction almost a decade ago, and held the record price for a cask sold at auction until a few weeks ago, but now we want to bring you the possibility of cask ownership in a one stop shop. We can help, through Cask 88, with storage, bespoke label design, bottling, duties and shipping – cask ownership is not reserved any longer for the sophisticated and well-connected whisky collectors. We hope to do cask auctions every two or three months if the interest is confirmed and we can source enough casks.
Where to from this point? Some quick thoughts on the market
Regular readers will know that our view has remained unchanged since the beginning of the Covid crisis. We continuously saw Covid as an accelerator of all pre-existing trends and thought that Collectables would benefit from them. We have consistently said since the beginning of 2020 that prices would be strong, and that strength would be particularly remarkable in the mid-market, ie items prices between £1,000 and £10,000 (this range varying slightly for each category of collectables). This bracket covers the items which start to have some real value but are not rare. This is the “soft spot” of collectables; the top end is always strong even if the number of buyers is much scarcer, and the bottom end always has buyers. This soft spot has been amazingly strong since the beginning of Covid, with selling rates much higher than normal and realisations most of the time 10% to 30% above pre-crisis levels.
Collectors are starting to be on the move again – physical collectables shows have also now taken place in most countries
We have also advocated that this window would close the moment collectors, established and new, were able to travel again to see their loved ones or for business, putting aside their albums and cabinets for a return to normal life, maybe with more passion than ever before. It is clear that in the last few weeks the world is reopening again, that some countries have abandoned their strict zero-Covid policies – with the notable exception of China, of course. It must be noted that, in the last few weeks, Europe has become the epicentre of the pandemic, with record levels of new contamination, but thankfully not accompanied by high levels of mortality. Some governments are talking of possible selective confinements due to this fifth wave, but it will be politically difficult to impose new restrictions on populations which are vaccinated and would not easily tolerate another round of freedom restrictions. Demonstrations have already taken place in Belgium, the Netherlands and Guadeloupe, and not all peaceful.
There is a very interesting chart by the Economist tracking the passenger bookings for air travel. It gives us a good sense of where we are along the way to normality. If the first week of January 2020 is based at 100%, International travel collapsed in 1Q2020 to 0%, has now recovered to 40%, and will rise further with the USA-Europe routes de facto re-opened since 8th November. After collapsing to 10% in 1Q2020, domestic travel has now recovered to 80% of pre-pandemic levels. So travel has had a strong recovery, hence following our belief all along that it could be a time to be more cautious on price levels.
The twin engine of inflation is kicking in and will replace the “stay at home” engine when it subsides
However, we underestimated another consequence of the crisis, and subsequent eye-popping quantitative easing: the return of inflation. As we all remember from the past, inflation can be a formidable driver of tangible assets – property markets across the globe have been roaring already, and it is now our view that inflation will be a key driver in collectables prices in the medium term. In October numbers just released, inflation was a whopping 4.2% in the UK, 4.4% in the EU zone and 6.2% in the USA – levels not seen for decades.
So as the “stay at home engine” is slowing down, the “inflation engine” is already in full swing. The jury is still out among economists and observers to see if inflation is a short-term phenomenon due to post crisis bottlenecks, or a longer term one. This is the key question for collectables and indeed, more broadly speaking, for your broader choice of asset allocation going forward. In other words, the window for collectables performance, which we thought would be slowly closing down by now, is still wide open, and shows no sign at this moment of closing. Indeed, our auctions are covered in record times after being put online and bid levels are strong.
So, we continue to see a strong overall market for collectables in the foreseeable future. An exciting first half of 2022 in perspective As the year draws to a close we have much to look forward to in January: our sale of the Henry III gold penny and the Simon English Collection look to get the year off to a spectacular start, with NYINC auctions for coins and banknotes also promising a lot of thrills in both categories, including the holly grail of banknote collecting: a full set of the 1916 Zanzibar iconic issue, including the 500 rupees, one of the gems of world banknotes. Interestingly, the gold penny to be offered in January is the first English gold coin and one of only four in private hands. While it is expected to sell in the £250,000 to £500,000 range, it will be offered unreserved with a start price of £5 to stimulate demand by all types of collectors and as wished by the metal detectorist who found this extreme rarity a few months back. The story of the find is actually a beautiful family story.
In Hong Kong, the sale of the outstanding Opium War Collection will also be one to watch, together with our usual Numismatics auctions in January. Later on in February, we prepare for the show of the decade for Stamps in London, with a fantastic and unusual programme for you, alongside of the official programme. After some art events related to collectables, and the new venture to democratise whisky cask ownership, we have lots of ideas to develop, including some interesting blockchain-related concepts to introduce to our world of collectables. So stay tuned, as we intend to have fun as we service you better and better! I have never been as enthusiastic about the future of collectables and Spink as I am now. And I thank the team of professionals at Spink for this feeling, as it is truly the best team we have ever had in my two decades of tenure.
In the meantime, why not pop in to the Spink Shop – go to Private Treaty on the spink.com website – for a range of unique and unusual items for the discerning collector, all at fixed prices – Christmas shopping might be sorted!
Finally, I would like to wish you and your loved ones a Merry Christmas and a wonderful festive season, with hopefully no government restrictions on how many people can be around the dinner table.
I also want to extend my best wishes to all the Spink staff across continents who have worked incredibly hard over the last two years to ensure we have a vibrant community and a no less vibrant business.
All the best,
This article was written prior to the emergence of the Omicron variant. The new variant does not change the views expressed. It simply means the “stay at home” engine will stay if full swing for a bit longer, and the recent inflation data at record highs also means the “inflation engine” will be even stronger than previously anticipated. It has now become a real concern for central banks, and the Bank of England was the first major Central Bank to raise interest rates to combat inflation.