We have commented recently on the positive rise of the Liv-ex 50, up 6% in the last month. The LX50 monitors the performance of the last ten physical vintages of the First Growths; Margaux, Lafite-Rothschild, Mouton Rothschild, Haut Brion and Latour. As a barometer of the market this is a particularly interesting index as major market moves are generally led by the fortunes of these blue-chip wines, whether up or down they act as a distinct ‘weather vane’ on the sector.
Certainly Brexit has had an effect, with many in the trade reporting a surge in activity in the days post June 23rd and the Exchange reported its highest weekly ‘trade by value’ in three years, three weeks ago.
This morning Liv-ex reported that the Index has continued to firm and closed Tuesday 19th July at 304.05, its highest level since October 2013. As a background to this global equities have been on a bullish run; the S&P 500 Index and Dow Jones Industrial Average have hit new all-time highs and in spite of Brexit the FTSE 100 Index struck an 11-month high this week.
A weaker Sterling does create energy in the fine wine market and there has been strong Euro and Dollar-based buying that was boosted in the aftermath of Brexit. The total value of firm bids and offers has hit a new all-time high of £34.5 million and the number of active markets – wines with a bid or offer against them – has also reached a new record of 6,500.
Taking the microscope to specific First Growth performance, examples of strong growth can be seen with Chateau Margaux 2012 up 26% year to date, rising 10.5% in June on the previous month and 8% up on its release price.
Haut Brion 2012 scored in barrel by Parker at 93-95 and upgraded to 98 in bottle in April 2015 has seen its Market Price increase 31% since the upgrade and 13% year to date.
Once again we see “off-prime’ vintages performing well. No doubt, stellar vintages such as 2005, 2009 and 2010 add cachet and value to wine but outstanding, well-scored wines in vintages with less consistent quality still offer great value and potential upside to investors.
There is a great deal of vibrancy in the market right now, for current valuations and the latest information call us now on 0203 384 2262.