Now's a good time to keep assets liquid, and in bottles

Investors savour how wine prices weather market storms

Back in 1776, when James Christie held his first auction of jewellery, furniture, art and other valuables, up for sale were also some bottles of wine. Even then, wine for some was more than just drink - it was an investment.

Last night, Christie's staged its fist wine auction in seven years in Hong Kong. In the days leading up to the sale, the auction house claimed interest had been active in the 245 lots of blue-chip wines - especially for a selection from the reserve cellars of Chateau Latour that is estimated to be worth HK$10 million.

The sale was the latest in a series of wine auctions this year that signals a growing interest in fine wine as an investment in Hong Kong, and in Asia in general. In May, an auction by US company Acker Merrall & Condit fetched HK$64 million - at that time the highest for any wine auction ever held in Asia.

It seemed everybody was talking about wine as a safe haven for savings as the world headed for a recession. It was hailed as a liquid asset in all senses of the word, and one with the advantage of being historically weakly correlated to other markets such as stocks and property.

But the past few weeks have shown that even wine is not quite as immune to economic forces as those selling it would have us believe. Last month, the market finally succumbed to the pressure, with Liv-ex, the leading fine-wine exchange, recording its largest monthly fall since the index was first calculated in 2001, dropping 12.4 per cent. Sales were also down. Even Bordeaux, considered the safest and most stable in prices, took a tumble of 25 per cent from a peak in August.