Betting big in art's hard times
The economic outlook may be grim and the world art market on a rocky ride, but auctioneers in Hong Kong are undeterred - they have launched a series of sales with blockbuster names that they hope will defy the financial turmoil.
'There are definitely uncertainties ahead because of the global economy. The stock market has gone down drastically and this will be reflected in the auctions, especially with contemporary art,' said dealer Calvin Hui, the founder and artistic director of 3812 Contemporary Art Projects.
But auction houses are banking on pieces by artists whose works rarely come on the market, including Jeff Koons and Edgar Degas, and Chinese artists such as Zhang Xiaogang and Zhang Daqian , to sustain interest among Chinese buyers.
Hui also said interest in fine Chinese works of art and antiques would continue to grow because of their rarity, while mid-range art - works priced between HK$500,000 and HK$1.5 million - were likely to suffer.
'It depends on the quality, but mid-range art pieces by up-and-coming artists are not necessarily the must-buy items,' he said.
The sales began yesterday, with four regular players - Christie's, Bonhams, SeoulAuction and Est-Ouest Auctions - holding their autumn sessions, offering a combined total of more than 6,100 lots of contemporary and antique works of art, fine jewellery, rare wine and other collectibles estimated to be worth more than HK$3 billion.
United Asian Auctioneers, a consortium formed by Beijing Hanhai Auction, One East Larasati from Singapore, K-Auction from Korea and Asian Art Auction Alliance, will present more than 100 lots of artworks today. Tiancheng International, a new player based in Hong Kong, will hold its inaugural auction on Monday, offering 234 lots that it hopes will to fetch more than HK$280 million. One major piece among the lots is Rodin's Monumental Head of Pierre de Wissant.
Sotheby's recorded its second-biggest Hong Kong sale by value last month, taking in HK$3.2 billion, and is hosting a preview at the Grand Hyatt of London Impressionist, modern and contemporary art, including a 1951 painting by Francis Bacon, to be sold in February. Also on show until tomorrow is a range of fine and antique jewellery going under the hammer in New York next month.
Even with the big names, dealers are cautious about the prospects for the latest sales.
The art market in Asia has grown considerably in recent years and the international art market strengthened as the global economy gradually picked up after the crash in 2008. But, the outlook has dimmed again with the recent stock market turmoil and the succession of gloomy economic statistics.
According to the US Commerce Department, the American economy grew at a 2 per cent annualised rate in the third quarter instead of the 2.5 per cent previously estimated.
Meanwhile mainland China's manufacturing sector has slowed to its slowest growth rate in 32 months, and Chief Executive Donald Tsang Yam-kuen has expressed worries that Hong Kong slipped into recession in the third quarter amid Europe's deepening debt crisis.
The pessimism created by such a dismal economic climate was reflected earlier this month in New York, when French Impressionist Edgar Degas La Petite Danseuse de Quatorze Ans, the famous bronze sculpture of a 14-year-old ballerina, as well as two paintings by Pablo Picasso, were among 31 lots - 38 per cent of those on offer - that failed to sell at a Christie's auction of Impressionist and modern art on November 1.
The owner of the Degas sculpture, one of 27 editions of the statue cast after his death in 1917, had hoped to raise US$35 million, prompting the New York Post to opine that 'rich art collectors got too greedy trying to cash out during hard times, causing a stunning flop in the US$1.1 billion season-opener of the art auction world'.
However, the market took an interesting turn just over a week later when Sotheby's New York had its largest contemporary art sale since May 2008, totalling US$315.8 million, with a rare Clyfford Still abstract painting fetching a record US$61.7 million.
In all, Bloomberg reports, the auction at Sotheby's York Avenue headquarters raised US$315.8 million - despite striking Sotheby's workers holding a noisy protest outside along with Occupy Wall Street protesters.
A few days later at the 14th Asian Art in London fair featuring Sotheby's, Christie's and Bonhams, buyers snapped up a total of GBP57.4 million (HK$695 million), including a Qianlong period (1735-1796) imperial vase for a record GBP9 million. However, just over half (56 per cent) of the items found buyers.
'Market fluctuations are normal and it's positive for the market to make adjustments,' said Angela Li, founder of the Hong Kong-based consultancy Contemporary by Angela Li.
Though the auctions will rely heavily on the purchasing power of the affluent mainland buyers, Li said they were not as generous as many imagined.
Moreover, 'many [buyers] are speculators'. 'If something goes wrong [in the market] they will pull out immediately. They look at the dollar sign more than the intrinsic value of an art piece,' Li said.
Following a strong spring sale, Christie's is offering more than 3,600 lots in Hong Kong with a pre-sale estimated value in excess of HK$2.6 billion, excluding the buyer's premiums.
Among the highlights are contemporary Chinese art star Zhang Xiaogang's Portrait in Yellow (1993), with an estimate between HK$25 million and HK$30 million, and a fine Chinese ink painting entitled Verdant Mountains and Layered Peaks After Rain by Zhang Daqian, which is expected to fetch between HK$20 million and HK$30 million. A Qianlong imperial white jade vase with an estimated value of HK$28 million to HK$35 million is also on offer.
Christie's achieved an astonishing total of HK$4 billion - the highest season total for Christie's in Asia - from its spring sale thanks to the enthusiasm of buyers from the mainland, Taiwan and Hong Kong, who contributed 70 per cent of the auction's revenue.
Despite the disappointment of the New York sale, Jonathan Stone, Christie's chairman and international head of Asian art, said he was confident about the current Hong Kong sale of Asian art.
After all, the Chinese auction market still appears to be thriving, with a number a records set on the mainland this month, including an oil painting by modern master Wu Guanzhong going for a record 149.5 million yuan (HK$182.6 million) at a Beijing sale.
A set of paintings by Fu Baoshi illustrating Mao Zedong's poems fetched a record 230 million yuan at Beijing Hanhai Auction just last week.
Stone said collectors still desired great pieces, as blue-chip works could serve as an alternative investment during economic downturn. He added that items at Christie's Hong Kong sale, unlike those in New York, had been 'well-estimated'.
Other than offering contemporary Chinese art pieces and historic works of art, Bonhams will continue with the Part IV auction of Mary and George Bloch Collection of Chinese snuff bottles on Monday. The 170 pieces featured have a pre-sale estimated value of HK$21 million to HK$38 million.
On Monday and Tuesday Est-Ouest Auctions will offer a range of collectibles, including a 1961 oil painting by Italian artist Lucio Fontana that the house hopes will fetch HK$9 million to HK$13 million, as well as The Dog Mobile: A Car for Francis Bacon, a Mercedes-Benz decorated by maverick Chinese artist-activist Ai Weiwei , believed to be worth up to HK$2.3 million.
SeoulAuction is having a modest sale offering 50 lots with an estimated worth of more than HK$195 million on November 28. Highlights included Jeff Koons' sculpture Smooth Egg with Bow, which has a pre-sale estimate of HK$55 million to HK$75 million. Another edition of Degas' ballerina sculpture is also among the blockbuster names featured, with an estimate between HK$12 million and HK$18 million - a major discount to Christie's 'aggressive' estimate of US$25 million to US$35 million.
Also on offer are works by Korean artist Lee U Fan, who recently had his solo exhibition at the Guggenheim in New York, and contemporary Japanese artist Yayoi Kusama. The Korean auction house has scaled down the sale by a third compared with its spring auction, which fetched a total of HK$32 million, but the estimated total value has gone up by more than six times.
Managing director Soyoung Lee admits the sale is risky in this economic climate and has kept the pre-sale estimates low. She also acknowledges that the introduction of around 10 Chinese antiques for the first time in the sale was based on the thriving market for such artefacts in the region, as demonstrated in October's Fine Art Asia.
'We will consider expanding this category if it is successful this time,' Lee said. But, Lee agrees that bringing such blockbuster names from the West in the current economic climate has its risks.
'We'd like to bring in more consignments from the West. If the Jeff Koons piece is sold, we might attract more consignments from the West,' she said.
'But to build up our image, we are willing to take a risk this time.'
The amount, in Hong Kong dollars, including fees, that Zhang Xiaogang's triptych Forever Lasting Love fetched at auction in April