Hong Kong art auctions offer quality pieces despite economic slowdown

Amid a slowdown in the art market, top-notch pieces are harder, but not impossible, to find. Enid Tsui looks at what's going under the hammer

PUBLISHED : Monday, 28 September, 2015, 9:01pm
UPDATED : Tuesday, 29 September, 2015, 10:51am

It is a good thing that two of the world's largest auction houses - China's state-owned Poly Culture Group and Sotheby's - are listed on stock markets because their financial disclosures have to tell it like it is.

On August 25, Poly's half-year report stated: "In the first half of 2015 … the artwork auction market was bleak. A dozen sizeable companies even suspended organising spring auctions." Revenue from its art auctions and other related businesses have dropped 27 per cent from a year ago.

Tad Smith, Sotheby's new chief executive, acknowledged that the second quarter was "rather bumpy", and the New York-listed company lost US$8 million by guaranteeing sales of works that sold for less than the sellers were promised.

Judging by the recent fall in Sotheby's and Poly's share prices, many investors believe the art market is going to get worse. The steep rise in auction prices in recent years has had a lot to do with the economic growth in China and other emerging markets, growth that now faces a severe headwind.

There is some nervousness in the build-p to Hong Kong's autumn auction season, starting in the first week of October.

Good, rare objects can always find buyers among serious collectors. The trickiest job for auction houses in a downturn is to convince collectors to part with their better pieces, and be willing to accept more conservative asking prices.

"Some potential sellers will most likely hold back and see what happens before being tempted to sell more important things … The market will be increasingly selective and price conscious," says Roger Keverne, a London-based dealer in Chinese ceramics and artworks.

"Why sell now when you can get better prices if you wait out the market turmoil?" says one Hong Kong collector of Chinese antiques.

This is reflected in the volume of the upcoming sales. At Sotheby's, 2,123 lots are on offer, excluding wine, 11 per cent fewer than in October 2014. Poly sales, too, have fallen by 13 per cent. The Chinese auction house has also condensed its autumn auction from 2½ days to 1½ days this year. This has nothing to do with the weaker market, says Poly managing director Alex Chang. The three-year-old Hong Kong team has simply learned to work more efficiently, he says.

"Demand is hardly a problem even during a slowdown. The challenge is how to persuade collectors to part with top-notch property that is fresh to the market at reasonable estimates. When curating our upcoming October sales, we have focused on quality and freshness with attractive estimates," says Kevin Ching, Sotheby's Asia CEO.

Examples this season include the October 7 sale of a selection from Dr Yip Shing Yiu's Ming dynasty Chinese furniture collection and Hanart Gallery's Johnson Chang's Ju Ming collection, Ching says.

Devotees of Chinese classical painting will probably be interested in A Glance of Nanjing City, a 10-metre long scroll offered by Poly on October 5. The work, which depicts in great detail what life on the street looked like more than 1,000 years ago, was commissioned by Qing emperor Qianlong, who ordered court artists to make copies of a Song dynasty original that is now lost. These copies, including one kept at the National Palace Museum in Taipei, have been compared with Along the River During the Qingming Festival.

Sotheby's will hold its first Chinese classical paintings sale in Hong Kong in more than a decade now that it has finally appointed a specialist based here. Among the highlights will be eight works from Japanese art dealer Sakamoto Goro's personal collection that include a charming scroll by Shitao depicting his friend, the poet Huang Yanlu, walking through mountains with a pony.

Other items include Giuseppe Castiglione's painting of Emperor Qianlong's consort, Chunhui, and a Ming dynasty blue-and-white brush washer from the period of Emperor Xuande.

Some potential sellers will most likely hold back and see what happens this season before being tempted to sell more important things
Roger Keverne, art dealer

China Guardian, the second-biggest Chinese auction house after Poly, has sourced dozens of Zhang Daqian paintings from collectors in Taiwan, as well as an exquisite yangsui - a Warring States Period device used to start a fire from sunlight.

On the modern and contemporary art side, Bonham's has a sale on October 3 that includes works by Cai Guoqiang, Liu Kuo-sung and Zhan Wang. Seoul Auction has a few major Western names in its October 5 sale: Henry Moore, Louise Bourgeois, Damien Hirst and Julian Opie, and Japanese artist Yayoi Kusama.

Paris-based auction house Artcurial will have its inaugural Hong Kong sales this October in partnership with Spink. The selection includes a 1967 Picasso, Buste de Femme, a crocodile skin Hermès Birkin handbag and even a vintage Mercedes-Benz 300 SL Roadster.

A perfect litmus test for the contemporary art market is Liu Wei's Swimming. This painting of a naked woman floating in the sea, eyes rolled back, with her labia majora in full view, sold for HK$13.2 million including buyer's premium at Christie's spring auction in May 2014.

Less than 18 months later, that buyer is putting it back on the market with a lower starting estimate of HK$10 million (compared with HK$11 million last year). It will go under the hammer at Sotheby's modern and contemporary art sale on October 4.

Jonathan Stone, chairman and international head of Asian Arts at Christie's, which has its Hong Kong autumn sales at the end of November, says the sell-through rate during New York's Asia Art Week earlier this month was above 75 per cent, and shows that the stock market turmoil and macroeconomic concerns have yet to dampen demand.

"In my opinion the market will be increasingly selective and price conscious. Where estimates are conservative and the quality is high I can see good prices being achieved. It is the lesser works of art that may not do well," says Keverne.


Upcoming auctions

There’s a busy two weeks ahead for auction-goers and art lovers in Hong Kong, with no fewer than nine sales occurring in the space of nine days. The action starts on October 3:

Bonhams Modern and Contemporary Art auction

October 3, Suite 2001, One Pacific Place, Admiralty

Sotheby’s autumn sales

October 3-7, 2015, Hong Kong Convention and Exhibiton Centre, Wan Chai

K Auction’s autumn sales

October 4, Renaissance Hong Kong Harbour View Hotel, Wan Chai

Seoul Auction’s autumn sales

October 5, 8/F, Renaissance Hong Kong Harbour View hotel, Wan Chai

Artcurial and Spink: From Paris to Hong Kong

October 5-6, 4/F and 5/F, Hua Fu Commercial Building, 111 Queen’s Road West, Sheung Wan

Poly Auction’s autumn sales

October 5-6, Grand Hyatt Hong Kong hotel, Wan Chai

China Guardian’s autumn sales

October 6-7, 3/F Ballroom, JW Marriott Hotel Hong Kong, Admiralty


Other sales:

Fine Art Asia 2015

October 4-7, Hong Kong Convention and Exhibition Centre, Wan Chai

Asia Contemporary Art Show

October 8-11, Conrad Hotel, Admiralty