Looks like all asset classes recovered strongly inclusive of the very economic sensitive art market. The confidence is strong enough that the operator is planning to expand their operations.
SINGAPORE: The auction house Christie's said on Friday the global art market is showing signs of recovery as prices stabilise and collectors return to the market.
One of the recovery signs was the record-breaking sale in February set by Yves Saint Laurent's art collection in Paris, which fetched nearly half a billion US dollars.
Christie's worldwide sales rose nearly 13 per cent in the first half of this year to US$1.8 billion, compared with the previous six months. However, sales in H1 2009 were down nearly 50 per cent on-year.
According to Christie's, Chinese investors are expected to drive growth because they tend to allocate more of their funds to alternative investments. The Southeast Asian contemporary segment is also expected to outperform previous estimates.
Andrew Foster, president of Christie's Asia, said: "The Southeast Asian market has been quite consistently strong in growing. It hasn't had that intense jump in prices that the Chinese contemporary market had over the last two years.
"(But) I actually think that it's going to recover more quickly, with the confidence of sellers to put objects on sale. I think it will recover more quickly than some of the other contemporary markets globally."
Moreover, the Asian art industry is expected to get a boost when Phase 1 of the Singapore Freeport opens for business in December.
The facility will be the world's largest free trade zone dedicated to the storage of high value art and collectibles. It will introduce a critical mass of new wealth management services to the region, such as art banking.
Phase 1 of the Singapore Freeport is already 86 per cent pre-booked. It is expected to store at least US$3 billion worth of assets when completed.
Singapore Freeport said apart from art, there is also a high demand for space to store gold as Asian countries relocate their assets closer to home.
Alain Vandenborre, president of Singapore Freeport, said: "What I didn't see coming was a huge demand for gold storage, which is now coming from different sources... Private banks for clients (and) also institutional banks in the market who want to have a facility in Asia where they can store sovereign state gold reserves confidentially. There's a facility like that in US obviously, there's one in London, no such facility in Singapore."
Based on the strong response, the company expects to start construction of Phase 2 in 18 months.
Sotheby's auction house that listed in NYSE(BID) price recovered by almost 150% since the low also signaling tremendous improvement in risk appetite. You can see the boom-bust cycle quite clearly from the chart.