Chinese Buying Drives Sotheby’s Hong Kong Sale to $170 Million

Oct. 9 (Bloomberg) -- Sotheby’s, the world’s largest publicly traded art-auction house, raised HK$1.3 billion ($170 million) in its Hong Kong sale, helped by mainland Chinese buyers dominating every category, setting records for furniture and Chateau Petrus wine.

The total beat both the presale estimate of HK$950 million and last year’s auction, which raised HK$1.1 billion ($141.7 million at that time), half its forecast, three weeks after Lehman Brothers Holdings Inc.’s September 2008 failure.

“The bidding was intense,” auctioneer Henry Howard-Sneyd said in an interview after the auction. The mood in the saleroom was “electric” when Emperor Qianlong’s throne came on the block yesterday, he said: “This shows when the right item comes along, the money is there -- especially from China.”

The strength of Chinese bidding at the antiques sale defies a decade-old trend of Western dominance at the priciest end of the market. As recently as June, Sotheby’s rival, Christie’s International, said Americans were its top clients in this category, followed by the Chinese and Hong Kongers. Of the 2,400 lots offered this week, 88 percent found buyers. The focus at Sotheby’s was mostly on antiques and old paintings by Chinese masters, while contemporary works attracted less attention.

With the sale of the throne, whispers grew louder, backs straightened and cell-phone conversations gained urgency as dealers gave their clients last-minute tips. A flurry of paddles greeted Howard-Sneyd’s opening bid of HK$13 million ($1.7 million), driving the price of the Zitan-wood antique to HK$20 million in seconds.

Jostling Bids

The jostling carried on at increments of between HK$1 million and HK$5 million. The final price of HK$85.8 million, a record for Chinese furniture, came from the posse of Chinese stock-investor Liu Yiqian.

Host Sotheby’s Asia Chief Executive Kevin Ching wouldn’t confirm Liu’s identity as buyer. Liu declined to comment.

Yesterday’s Chinese antiques sale was “the best of its kind in the world this year,” according to Shanghai-based dealer Lu Feifei, who paid HK$59 million for Emperor Qianlong’s jade-hilted saber and scabbard at Sotheby’s event last year. Antiques accounted for nearly 40 percent of Sotheby’s total take. Christie’s will hold its Hong Kong sale in late November.

Yesterday’s standing-room-only event was attended by the biggest names in the multibillion-dollar Chinese antiques business, such as collector Robert Chang; the Chak family of dealers; and buyers such as Lu, Shanxi and New York-based James Hennessy, whose dealership bought the priciest Chinese antique at Sotheby’s Spring auction in the city six months ago.

‘Hard to Beat’

“The Chinese bidders are so strong,” said Kevin Li, a Taiwanese antiques dealer, in an interview at the venue. “It’s hard to beat them when they set their sights on something.”

The Chinese also bought the priciest wines and oil paintings by masters and contemporary art. Over the weekend, a Chinese buyer paid a record $94,000 for a 6-liter bottle of Chateau Petrus 1982; another spent HK$7.3 million for a 1984 oil-and-color on paper by Li Keran at the auction of classical Chinese paintings; while a third spent HK$36.5 million on a mid- 1950s oil-on-board painting, “Lotus et Poissons Rouges” (“Lotus and Red Fish”) by deceased Chinese master Sanyu.

Contemporary art, the auction favorite for about for two years before Lehman collapsed, is still out of favor, with top pieces by the biggest names such as Cai Guoqiang unsold. The top-selling lot by young artists was Zhang Xiaogang’s 2005 diptych “Comrade” -- gray oil portraits of an unsmiling, Mao- styled couple on 130-centimeter-by-110-centimeter canvases -- which fetched HK$8.5 million. At the market’s peak in May 2008, buyers offered up to 10 times more than that for the top lot.

Antique Investments

In unsettled economic times, speculation recedes and buyers choose antiques because they are seen as better investments, dealers say.

The region’s benchmark Morgan Stanley Asia Pacific Index has risen 40 percent in the past six months as economies such as Hong Kong emerged from recession and growth in China accelerated. Still, concerns abound in Asia that rising debt and joblessness in the U.S. might hamper recovery.

“No one knows what’s going to happen to the economy or currencies,” said Fyzee Thambi, a Hong Kong-based gem dealer, in an interview on Oct. 8. “So it’s better to buy an asset.”

Sotheby’s buyers’ commission was 25 percent of the hammer price for the first HK$400,000; 20 percent for an amount between HK$400,001 and HK$8 million; and 12 percent for any amount above that.

To contact the writer on the story: Le-Min Lim in Hong Kong at lmlim@bloomberg.net