LUXURY INVESTMENT INDEX
Penny Black B.P.A. Certificate 1972. One of the finest mint examples of the Penny Black Extant. Lot sold 21 September 2011. 180,000 GBP (Image courtesy Sotheby’s).
NOVEMBER / DECEMBER 2013
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* The very first stamp was issued in 1840, the same year that Edward Stanley Gibbons was born. 150 years later, Stanley Gibbons Ltd is the market leader in the stamp collecting market and the Gibbons catalogues and investment guides are considered amongst the best in the world.
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certed effort to increase their profile in the Chinese market. A recent spate of auctions aimed specifically at Chinese high net worth individuals and in fact held on the Chinese Mainland are proof of these efforts (for more information please see the Christie’s interview elsewhere in this edition). The new push into China and Chinese collector interest is fueling a resurgence of interest in a hobby that only a few years ago was in danger of being relegated to a few dusty museum exhibits and of interest to a dwindling number of equally dusty collectors. “Some of the recent growth can be credited to Chairman Mao – but not necessarily for the right reasons – he banned stamp collecting as being ‘bourgeois,’ however, the Chinese, with newfound freedoms as well as wealth, are eager to reclaim their heritage” says Keith Heddle, Group Marketing & Investment Director at Stanley Gibbons. At least a third of the world's 60 million stamp collectors are now in China, and the number is growing rapidly, according to Stanley Gibbons. China, including Hong Kong, has also become a big stamp-trading hub, stamp shows have proliferated, drawing hundreds of thousands of buyers and eager onlookers at a time when similar events in other parts of the world are noteworthy only because of empty halls and extremely thin visitor numbers. Stanley Gibbons says Asian clients now make up 5 percent of the firm's investments in terms of volume—but almost 18 percent in value, as they spend more money, more often. These are Penny Black investors not penny investors. Three years ago, two sheets of the first ever-issued stamps for Formosa, the name
ISSUE 01
The action today is in Asia, especially China. Changing demographics and increasing wealth that is trickling down across social strata, as well as a growing fascination with pursuits and hobbies that were only a short time ago seen as exclusively Western pursuits is fueling a micro mania for stamp collecting. Some of the most exciting examples for both Chinese collectors and those outside of the country are those which were circulated during some of the most turbulent times in the growth of the country. Examples of stamp sets that are certainly making a new generation of collectors sit up and take notice is a set of 1967 stamps featuring communist leader Chairman Mao Zedong greeting crowds with quotes from his "Little Red Book" – worth a cool USD $53,000. A slightly worse for wear, faded orange hued stamp from 1897, known as the "golden dragon," which features a pair of coiled dragons along with Chinese characters giving the stamp's face value in the old imperial currency of "candarins." Adding significant historical interest is the fact that above the images is a black-ink marking in both English and Chinese that says "10 cents," a reminder that the British by that time controlled many of China's ports. Only 14 unused versions are known in the collecting world. In collecting rarity is the primary driver behind value – and this stamp is a perfect example with a sticker price of USD $151,000. It is anticipated that as Chinese collectors refine their tastes and as philatelists across the world are exposed to more examples of rare examples of Chinese stamps the price will steadily rise for good examples. It is readily apparent that auction houses like Christie’s and Sotheby’s are making a con-
of the island that later became Taiwan, sold to a Hong Kong collector for HK$10.4 million, or over USD $1.3 million. In 2011, a block of four stamps from 1968 called "Chairman Mao's Inscription to Japanese Worker Friends" sold for more than USD $1 million at a Hong Kong auction. The stamps, which feature Chairman Mao's handwriting declaring that the revolution would succeed in Japan, were printed but never saw the light of day, except through a small, nondescript post office in Hebei, China, which started selling them before they were canceled. A move which one assumes would have had serious consequences for the Postmaster of the town. Last year, a pair of 1941 stamps that featured Sun Yat-sen, the revolutionary leader who began the Republic of China in the early 20th century, sold for USD $709,000 at an auction in Hong Kong. Like many other expensive stamps, their value was due to human error: The text and the $2 sign were printed upside down. Chinese buyers tend to like alternative investments, from art to jade to Chinese Ceramics, coins, watches and fine wine. In fact the Chinese lead, or are close to leading investment in almost every alternative asset class contained in the Knight Frank Luxury Investment Index (see intro to this feature). Stamps are also a relatively cheap collectible for countries that have new and growing middle classes. A ‘lucky packet’ of hundreds of stamps, so beloved by thousands of budding child hobbyists only a generation ago can still be purchased for around USD $5 which makes it easy for new collectors to get started, and as they get wealthier, they delve deeper into the hobby. It seems the Chinese are going to be going very deep indeed.