The Emperor Qianlong’s Review of the Grand Parade of Troops fetched HK$67.86 million, more than double what it was worth four years ago

Sotheby’s announced in August 2008 that the venerable London-based auction house would stage all of its contemporary Asian art auctions in Hong Kong twice a year, and at no other location. Whether the move was a nod to Hong Kong’s growing importance as an art hub, a signal that the New York auctions of that art are no longer profitable, or recognition that there are many more Asian art buyers than ever before – may be a moot point in light of the worldwide financial crunch. Recent art fairs and auctions in Hong Kong, held hot on the heels of the Wall Street crisis that unfolded in early October, have seen some disappointing results.

The question that’s foremost in the minds of art undoubtedly is: Will the art boom fade, or is it a good time to purchase some of the hottest artists at slightly lower prices? Are watches, fine wine and jewels better investments than derivatives, stocks and bonds? There is no straightforward answer. The picture may become clearer only in the months – perhaps years – ahead, as the world struggles through this latest economic downturn.

Sotheby’s held its autumn Hong Kong series of auctions in early October, just after the global economy started to unravel. The series included timepieces and jewellery, rare imperial art from the Qing dynasty, 20th century Chinese art, contemporary Chinese art and South and Southeast Asian contemporary art.

The auction results totaled HK$1.097 billion (US$140.7 million), the third highest total for Sotheby’s Hong Kong sales series ever – but much lower than Sotheby’s own pre-auction estimate which estimated the value of the nearly 1,700 properties in its Autumn Sale at about HK$2 billion. Plus, a much larger percentage of the lots remained unsold than the previous year.

Sotheby’s sale of modern and contemporary Southeast Asian paintings brought HK$71.6 million, far exceeding its high estimate of between HK$35.1 million and $48.5 million. This perhaps pointed to a cooling in the contemporary Chinese art market, with investors looking for more reasonably priced bargains.

Although sales of timepieces and vintage watches held up, a 102-carat diamond necklace failed to sell. Quek Chin Yeow, deputy chairman and head of the jewellery department of Sotheby's Asia, said the climate for the auction was soured by the financial crisis. In Sotheby's jewellery sale, 162 of the 321 lots went unsold, a great contrast with its spring sale in April, when 70 percent of the 324 lots sold.

The story was similar across the board, with as many as a third of the lots in various categories not going out the door. The Modern and Contemporary Asian evening auction saw 28 of 47 lots being sold, a few at really good prices. The well-known Zhang Xiaogang’s Bloodline: Big Family No. 1 went for HK$23.06 million and Cai Guoqiang’s eight-panel screen of gunpowder and ink on paper, Eagle and Eye in the Sky sold well over estimate for HK$17.46 million. Others did not fare so well and 19 remained unsold.

The high point of the Sotheby’s auction were pieces classified as under Chinese imperial works of Art, under the title “Legacies of Imperial Power,” which brought a total of HK$383 million. Following spirited bidding, new world records were set when royal painting The Emperor Qianlong’s Review of The Grand Parade of Troops sold for HK$67.86 million, more than doubling the price the same scroll fetched four years ago. Another record was set for any white jade when an exceptional Imperial White Jade Qianlong Yubi Seal achieved HK$63.38 million, against an estimate in excess of HK$50 million. A Sotheby’s spokesperson said they were “thrilled to see” that Qianlong imperial seals from the estate of Emile Guimet, a 19th century French industrialist and avid Chinese antiques collector, had been sold 100 percent by lot.

Perhaps the message is that rare and significant antiques hold their value, as the average lot value of these rare imperial pieces was HK$22.5 million.
The spokesperson continued, “We saw a levelling off in modern and contemporary Asian art sales, which had seen explosive growth over the past five years. The overall total, which was below the low estimate, was the result of selective bidding throughout the weeks as well as a resistance to optimistic estimates.”
In a reflective mood, the spokesperson added: “There cannot not be some impact from the global financial issues right now. The preview over the past few weeks had been relatively positive, but the developments in the greater markets during our auctions certainly affected interest. Once again, as mentioned above, we saw resistance to estimates for higher value lots, which may have seemed overly optimistic in the current climate.”

More action

Simultaneously with the Sotheby’s auction, the Hong Kong International Arts and Antiques Fair (HKIAAF) occupied the floor above the Sotheby’s preview at the Hong Kong Convention and Exhibition Centre, with 154 local and international galleries featuring both Asian antiques and fine art. Andy Hei, an antique Chinese furniture dealer and co-founder of the fair, felt that the combination of the modern and antique was unique and offered two different art buying publics a chance to see another type of art.

However, echoing the Sotheby auction results, the gallery owners at the HKIAAF event said sales were not quite as robust as they had hoped. Karen Weber of Karen Weber Gallery said some of the pieces she exhibited had not sold as expected. People seemed a bit nervous, but there had been “very good attendance and keen interest,” Weber noted. She had one of the most eclectic booths, showing artists such as Xue Mo from the mainland, Noel De Guzman from the Philippines, Min Wae Aung from Burma, Karina Wisniewska from Switzerland and Rosi Helms from Australia, something for everyone to like.

Henry Auyeung, director of Grotto, a Hollywood Road gallery that specialises in Hong Kong artists, said, “I had hoped for a better sales result this year because the fair has improved very much over the last three years, but people seem to be cautious right now. I have brought many fine young artists to this fair, including Wilson Shieh, Fiona Wong, Lucille Lo, Halley Cheng, Wong Chung-yu, Cheng Chi-fai, Ho Siu-kee and Joey Leung, who are popular with the locals and visitors alike. ”

Paul Yip at Cais, a Korean-owned gallery with a branch in Hong Kong, said the contemporary Korean artists were attracting a lot of attention and quite a few pieces had sold, but other people were keeping their wallets in their pockets. The gallery showcased Lee Lee Nam, Lee Woo Lim, Rhee Da, Shoi So Young and Kim Jee Hye, along with seven other talented artists. Yip said, “I had hoped for more sales but in light of the news, I suppose we did ok.”

Another Korean gallery, Pyo of Seoul, Beijing and Los Angeles, said sales were not as robust as hoped. Pyo featured an intriguing mix of artists, Lee Youg Deok, Park Sung Tae, Kim Tschang Yuel, Lee Woo Lim and others amply demonstrating the strength of the modern Korean art talent. Contemporary art dealers from Japan, United States, Europe and Southeast Asia were experiencing the same cautious mood despite exhibiting some fine works of art.

Overseas antiques dealers from all over the world were also exhibiting some very important pieces. Esteemed antiques dealer Rossi + Rossi from London was showcasing a US$6 million 13th century Buddha from Nepal, “Padmapani,” the most expensive piece in the show. Fabio Rossi said he had expected more interest in the piece, as it was a rare example of the gilt copper, lapis lazuli, gems and glass sculpture. Also from London was Martyn Gregory Gallery, which is the world’s leading specialist in “China Trade” paintings and pictures related to the Far East dating from the later Qing period.

Across the driveway, at the Grand Hyatt Hotel, the first-ever auction by the Seoul Auction house took place with sales of 80 out of 120 works of art and sculpture from great names in Western, Korean and Asian modern and contemporary Art. Managing Director Misung Shim said, “We had looked at the Hong Kong art market for two years and decided to open an office here last year because Hong Kong is the centre of the Asian art market. This was our first auction but it was just bad timing for us, with the market meltdown. However, we still did very well, considering, selling 65.5 percent or 80 items of 120. Our lowest estimation was HK$300 million, but we managed to sell $177 million (not including premiums) despite all the bad news.”

Seoul Auction featured pop artist Roy Lichtenstein’s Still Life with Stretcher, Mirror, Bowl of Fruit that sold for $68 million to a bidder from New York. Shim said that Seoul Auction will plan more precisely for the Hong Kong market at the company’s next auction in May 2009. Korean buyers have been investing in Western art for the past 20 years, but the Hong Kong market is more interested in Asian and Chinese art.

She said 25 or so young Korean artists sold very well, quite a bit over estimates, because “their prices are still reasonable and the art is quite good. Some of them have already been exposed to the Hong Kong market through Christie’s auctions in 2006 and 2007,” she added. Selling prices of Memory of Love by Kwon KyungYup and Overlapping image 080401 by Lee HoRyon were three times higher than estimated, showing that the market has an increasing demand for art from young artists with high investment potential.

Watch and wait

Many sellers agree that Christie’s auctions this month (November) in Hong Kong and New York will provide a fuller indication of  the effect of the financial crisis.

In London’s art world, the crisis has already made its presence felt quite emphatically. On October 17, Sotheby's and Christie's evening sales of contemporary art brought in a total of £54 million ($93.4 million), well below the combined presale estimate of between £88.4 million and £118.3 million, and representing a 19 percent drop from similar sales last October.

Christie’s next Hong Kong series of auctions will be held at the end of this month (November 29-December 3). It will cover some of the same ground as Sotheby’s with the addition of the finest and rarest wines, including historic vintages from the cellars of Château Latour. Highlights from the selection of Modern Asian works include Las Damas Romanas (Roman Maidens) by Juan Luna of the Philippines (estimate: HK$8-$10 million). This work is one of the truly iconic Roman scenes from the artist, who was one of the most important Filipino painters of the colonial period for his reformist stance and the role he played in highlighting the plight of the Philippine colony to the Spaniards.

Among the star contemporary lots is Marathon (estimate: HK$800,000-$1.6 million), a work that is an exemplary and distinctly theatrical piece from Southeast Asia’s most successful contemporary artist, I Nyoman Masriadi.

Jonathan Stone, international business director for Asian art at Christie’s, expressed “cautious optimism” for the result of the house’s autumn sales, “particularly given the exceptional quality of consigned property that we shall be offering and the timeless demand for exceptional works of art. 

“Like all industry leaders, Christie's is watchful of the unfolding situation in the global financial markets, particularly as it relates to our clients, business and staff. The works we sell are reassuringly tangible – and they have an inherent value that makes them stable stores of value over time. Although prices may fluctuate, there is never a question about the value of what we are selling. We have encouraged sellers to agree to reasonable estimates and reserves."

Or, as Seoul Auction’s Shim more pithily said, “Art is a good investment, but keep your eye on the markets.”