Sotheby’s Art Market Review

Sotheby’s two sets of Asia Week sales—in New York in mid-September and Hong Kong in early October—were overshadowed by the worldwide financial crisis. What the longer term trends in the market for Asian artworks will be cannot be known at this point because the sale results simply cannot be separated from the fact that the auctions—especially the sales in Hong Kong—were held during moments of acute stress and uncertainty.

So much has happened since the beginning of the crisis, it is worth recapping the timeline. Lehman Brothers declared bankruptcy on September 15th, 2008. The filing set off a chain of events that provoked the United States government to fashion what would become a huge financial bailout plan and prompt coordinated global action by the world’s leading central banks. But the failure of the Congress to pass the government’s bailout plan expeditiously caused the world’s credit markets to freeze which, in turn, caused stock markets to fall to dramatic lows in the US on October 10th.

The period from September 15th to October 10th neatly brackets the Asia Week sales in both New York and Hong Kong. Judging the performance of sales that took place within the rapid re-pricing of assets is difficult to do, since the sales were assembled in a vastly different economic climate. Although the number of lots offered and the estimates placed upon those lots are a function of longer term trends of supply and demand, (which would suggest that short-term shifts in global financial markets would have little effect on the results) the surrounding events were too great not to have directly influenced the sales.
The dramatic worldwide de-leveraging caused by the end of the credit bubble created a volatile environment surrounding the sales. It would be naive to think buying decisions on Asian art and works of art were not made in the context of this economic uncertainty. The stock market in Hong Kong reached a short term low on October 10th only to fall another 25% before reaching its deepest lows on October 27th. It has since recovered but to a level 30% lower than before the sales. Clearly Hong Kong buyers had a reason to be cautious.

Nonetheless, Asia Week in New York had a combined sale value of $77 million across nearly a dozen separate sales at Sotheby’s and Christie’s. Nearly 60% of the lots on offer at both houses were sold. At Sotheby’s, $26 million of Asian art and works of art were sold, which represents 63% of the lots on offer, slightly more than the combined sell-through. However, it was the first time in three years that the sell-through at Sotheby’s New York Asia Week fell below 70%.
In Hong Kong, nearly $113 million in Asian Art and Works of Art were sold at Sotheby’s alone. There were slightly more than a thousand lots in the combined sales and 64% of those lots found buyers for an average lot value of $175,264.

Significant SalesNew YorkEven in an uncertain market there will always be works of great or even unexpected value. In Sotheby’s New York sales, the most hotly contested lots were a set of ‘Zitan’ armchairs from the Qing dynasty (early 18th Century) that sold for $332,500 above a high estimate of $180,000; a Japanese gilt-wood seated figure of Yakushi Nyorai (10th/11th Century) that was sold for $290,500 above a high estimate of $120,000; Zeng Fanzhi’s Mask Series painting which sold for $1.8 million; and Korean artist Kim Whanki’s Les Oiseux Volants from 1957 that sold for $434,500.

Among the works of South Asian and Southeast Asian art and works of art, there were some stunning sales. Tyeb Mehta’s Falling Figure with Bird sold for slightly more than $1.5 million, the upper end of the estimate range for this Modern Indian painter. Subodh Gupta has been in the middle of an auction frenzy for most of 2008, One Cow sold for $866,500 also above the work’s $800,000 high estimate.

Among the works of art, a 3rd Century Gandhara Bust of Buddha sculpted out of gray schist brought in $242,000, more than double the $90,000 high estimate; and a gilt copper Manjusri set made in Nepal in the 14th Century was sold for $182,500 against an $80,000 high estimate.
Hong KongIn Hong Kong, the emphasis was on works of art with an Imperial connection, classical Chinese painting and Southeast Asian Contemporary art. The Imperial Qing dynasty painting, Emperor Qianlong’s Review of the Grand Parade of Troops sold for $8.7 million, a record price. The highlight of the week was the estate of Emile Guimet’s sale of Imperial seals that brought $49 million with several of the works selling for prices well above the high estimates. The white jade “Qianlong Yubi” seal was sold for $8.1 million, also a record.
Among the works of art, a mallow-shaped Junyao Imperial flowerpot and matching stand from the early Ming Dynasty sold for nearly $950,000. A blue-and-white hexagonal vase with a Qianlong seal mark sold for almost $600,000, its connections to similar vases in museums in Beijing, Taipei and Tokyo set the benchmark for its value.

The sale of Fine Chinese Painting was also a success. Wu Guanzhong’s Along the Yangtze River achieved nearly twice the high estimate when it sold for just over $2 million. Some other very strong sales in the category were Wu Changshuo’s Blooming Flowers ($481,301) and Lin Fengmian’s Landscape ($434,972) which both sold for more than two times the high estimate.
Finally, Indonesian painters, like I Nyoman Masriadi who had several works sell for well above the high estimates, were standouts among the works of Contemporary Asian art in Hong Kong. The most valuable of these Indonesian works was The Man from Bantul (The Final Round) which was bought for $1 million, a record for the artist. But Masriadi was only one of many Indonesian painters, like Affandi, Agu Suwage, Handiwirman Saptura, Rudi Mantofani, Dipo Andy and Jumaldi Alfi, who made record sales. Several important Indonesian art collectors have created demand for these artists by educating their peers and attracting Contemporary Chinese art collectors to these Indonesian artists.

Market Trends

Given the unusual circumstances of the Asia Week sales, especially in Hong Kong, it is worth noting that the market seemed to drive in two different directions. A high premium was paid for the best quality works, particularly works with a connection to the Imperial throne. This is common theme in Chinese Works of Art where the continuing accumulation of wealth in China has created an appetite for objects with Emperor’s imprimatur.
In the world of Contemporary art, there was also an emphasis on quality. Although the sale of Contemporary Chinese art saw many lots fail to find buyers, the lots that did sell maintained a very strong price structure. In the day sale, where the sell-through was 80%, there was real competition for works by younger and less established artists. Clearly Asian collectors still have an interest in Contemporary art. Indeed, the demand survived a withering economic storm but it has shifted toward a highly selective top-end and very competitive entry-level.
Somewhere in between those two extremes lies the burgeoning collecting field of Southeast Asian art where Indonesian painters are beginning to find the market support that their Chinese neighbors saw three or four years ago.

Chinese private buyers dominated the Hong Kong sales. So it should not surprise us to see that two of the collecting categories that saw persistent strength in the face of the financial crisis were the sales of Classical Chinese Painting and the Day sale of Chinese Contemporary art.

Source – Sothebys