Wine Market Showing ‘Positive Signs’ Amid Dollar Strength

The fine wine market is showing some indications of revival after price declines from its peak in 2011, helped by a strengthening dollar, according to Miles Davis, partner at Wine Asset Managers LLP in London.

“We’re beginning to see some positive signs coming through,” Davis said in an interview. “It’s definitely too early to call a turn for sure, three years has been a long time, but obviously this market will turn at some point.”

The Liv-ex Fine Wine 50 Index, reflecting recent vintages of the Bordeaux first growths, climbed 1.3 percent last month while the broader Liv-ex Fine Wine 100 rose 0.9 percent, according to data on Liv-ex’s Cellar Watch website. The move still left the Liv-ex 100 down 8 percent this year.

Davis cited an increase in the bid-offer ratio on Liv-ex, which he said historically had been linked to market recovery, and also said trends on the foreign exchange market may be playing a part.

“Recent currency movements have helped,” he said on Sept. 9. “The dollar’s been gaining strength, which has helped American and Asian buyers, and sterling’s been weaker, so that will have helped a bit. It’s not great waves of demand, it’s bitty, but there are more buyers.”

The pound has weakened 5 percent against the dollar since the end of June, taking it to $1.6270 on Sept. 12.

Chris Smith, investment manager at The Wine Investment Fund in London, wrote in an e-mailed commentary last week that declines on the Liv-ex 100 have left the index “well below its trend and with the potential for sustained growth.”

Interest in the fine wine market may also reflect the start of the new global auction season. A case of Romanee-Conti 1988 Domaine de la Romanee-Conti Burgundy fetched HK$1.35 million ($174,000) at Christie’s International Plc in Hong Kong Sept. 6, leading a sale which totaled HK$19.9 million.

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