Rapaport Magazine

Lucky Eights

The changing economy of China made buying more selective at Sotheby’s Hong Kong sale.

By Liana Cafolla

Top-selling necklace of D, IF diamonds weighing an auspicious 88.88 carats for $5,110,256.

Sotheby’s Magnificent Jewels and Jadeite autumn sale on October 9 in Hong Kong was a somewhat subdued affair. The crowds were present, and so was a diamond-heavy collection of jewels, but the mood among buyers was more hesitant and watchful than at the auction house’s spring sale in Hong Kong. Phone bidders, in particular, seemed to take their time increasing their offers, and the bid numbers rose more slowly compared with the spring sale.

The sale brought in $49.8 million against a presale estimate of $64 million to $80 million. The 388 lots sold 73.2 percent by lot and 67.7 percent by value, with 104 lots — which included many high-priced pieces — going unsold. Sotheby’s spring sale, by comparison, brought in $64 million from a presale estimate of $75 million to $92 million.

The top lot was a D, IF riviere diamond necklace by Nirav Modi. It featured 36 type IIa diamonds, ranging in size from 1.25 carats to 6.19 carats, with a total weight of 88.88 carats. Each diamond in the necklace was spaced by smaller, brilliant-cut diamonds. In Chinese culture, eight is considered the luckiest number and the Chinese word for eight sounds similar to the word for wealth or fortune. The profusion of eights would be a bonus for the buyer, said Quek Chin Yeow, deputy chairman and head of the jewellery department at Sotheby’s Asia. “It’s a beautiful necklace that people will love, but the number is something that will stick in everybody’s mind,” he said. It sold for $5,110,256* to an Asian private.

Other internally flawless diamonds were among the top sellers. Two round D, IF brilliants of type IIa quality — an unmounted 20.22-carat round diamond and a 15.02-carat round Forevermark diamond mounted in a ring — sold to Asian privates for $4,130,580 and $2,830,260, respectively.

“Obviously, the results were not as strong as our spring sale,” said Quek. “It’s a little bit more selective buying, a little bit more cautious atmosphere, I think, particularly a little softer buying from the Mainland.”

Even among the top ten lots, most pieces were sold within the estimated price range and there were few bidding wars among buyers. “Everything sold at the low estimate,” noted Quek. “With the premium included, it comes out to be mid-estimate, which is about right. So I think the auction market is still holding very well, for the top lots anyway.”

Buyers seemed more worried about the impact of slowing growth in China than they were about the weakening euro and its potential to derail the global economy. “Actually, the spring sale took us by surprise because we thought that the mood was a little weaker then because of the euro issue,” said Quek. “But I think the euro question is a little less worrying now than the reduced spending by Mainland buyers and the slowdown in China’s growth.”

Nonetheless, Mainland buyers still made their presence felt at the auction. Quek noted strong bidding from Mainland Chinese buyers in the top three lots, and one of the top five lots went to a buyer from Mainland China. Other strong bidding came from Hong Kong, Taiwan, China, Singapore, Indonesia and, to a lesser extent, from Thailand, with some international interest. One American dealer attending the sale said that business was so slow in the U.S. that he had time to travel to Hong Kong to attend the auction there.

Among the colored gemstones, a 9.08-carat pigeon’s blood red Burmese ruby and vintage diamond ring by Cartier, circa 1956, was the clear standout. The oval stone came from the Mogok Valley mine in Burma, which is known for producing stunning rubies. The Cartier brand name added a definite cachet to the piece, said Flora Wong, senior specialist and deputy director of jewelry for China and Southeast Asia.

Cartier’s appeal was evident at the Hong Kong Jewellery Fair held in September — of all the top vintage names present at the fair, it was the Cartier selection that attracted the biggest crowds. The ring that sold at Sotheby’s, set in its original openwork, dome-shaped mount accented by baguette diamonds,was shown in advance of the auction around Asia and privately in Europe, but not in the U.S. because of restrictions on bringing Burmese rubies or jadeite into the country. The ruby and diamond ring was the final lot of the sale, and sold for $3,335,940 to an Asian private after some fairly lively bidding. “Of course, we were hoping to get a little more,” said Quek, “but it is what it is. It’s still a lot of money.”

The sale overran its expected end time by more than an hour as bidders took their time deliberating over their next move. Auction length is affected by different factors and the time it takes to close a sale varies from lot to lot. “It can be affected by interest and competition — the more bids the lot attracts, the longer it takes,” said Quek, “and by bidding method — the time needed to make a decision to bid is more obvious with phone bidding — or by the pace of the auctioneer and even the manner in which staff engage clients on the phone.” The number of people present in the room had fallen markedly by the time it came to the final 50 lots. “It was also a bit late already and people were getting tired,” noted Quek. “Some auction fatigue, unfortunately. It does sap you, sitting there. I think it could have had a slight impact on prices. Clients did give us feedback on that.”

Despite the late hour, those who remained in the room appeared riveted by the jewels on offer and willing to wait for the results on the final Cartier ring lot, paying close attention to the bidding action until the final gavel fell.

In other news from Sotheby’s, the auction house announced the launch of its joint venture with China’s state-owned auction house, Beijing GeHua Art Co. “It will allow us to do auctions in China,” said Quek. As to what type of auctions the house would hold in China, he said: “We will do whatever we’ll be licensed to do.”

Both Sotheby’s and Christie’s operate out of Hong Kong but they are restricted from doing business in China unless they partner with a domestic firm. The ten-year agreement with Beijing GeHua Art Co. gives Sotheby’s 80 percent ownership of the new joint venture for its $1.2 million investment. GeHua is developing a free port project in Beijing that will “serve as a tax-advantaged storage location and provide a platform for auctions and private selling exhibitions,” according to Sotheby’s.
*All prices include buyer’s premium.

Article from the Rapaport Magazine - November 2012. To subscribe click here.

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