Singapore, a dull El Dorado?

The Singaporean art market is going through tough times. But despite difficulties, experts express optimism and see a market grounded on healthy foundations that should enable it to ride through this period of disturbance by strengthening its connectivity. There are some signs that don’t lie. Just look at the closure of several museums in the country including the Singapore Pinacothèque de Paris and the departure of a few galleries, matched with lower museum visits and morose sales figures — that namely triggered the cancellation of the Singapore Art Fair and the Milan Image Art & Design Fair Singapore despite the great success of their inaugural editions. While the market’s global economic value has increased in the last decade, going up from $340.3 million to $528.7 million in 2013, the last two years have seen a correction of the market. The Singaporean art market is relatively young at around fifty years old. Bala Starr, director of the Institute of Contemporary Arts Singapore, makes the following observation: “The art scene here needs to be connected to the world. Commerce occurs in the context of the wider scene. The biggest advantage for Singapore is to form a positive and consistent reputation as a backer of the arts in Asia. That Singapore is a young market is a benefit to us because it gives us the opportunity to convert people into art...

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The 90s Crisis and Its Consequences

Alfred Marshall stated in his book Principles of Economics, “It is impossible to evaluate objects such as master paintings […] since they are unique in their genre, having neither equivalent or competitor.” Art has always been an ambiguous subject of study for economists due to its atypical characteristics. Works of art have an increasingly marginal utility (in which perceived satisfaction increases with consumption, which is not the case for other types of goods) and a strong degree of uncertainty in its value. One of the necessary elements to comprehend the art market crisis of the 1990s is that it revealed a change of view of art: art is no longer considered an independent field within the economy but as a sector of potential investment. The 1980s: a favorable macroeconomic environment for speculation The art market began to globalise after World War II. The United States became an important player, and prices began to increase. However, it was following the 1980s that the prices saw a significant increase. During this time, the financial markets profited greatly from cash-flow and the economy witnessed a period of growth after the post-oil shock recession. Now there is a link between the growth of the economy and the art market: an increase in GDP invites investors to place their funds in the art market with the purpose of diversifying their portfolios or out of pure artistic interest. Additionally, Japanese investors began to participate in the art market as buyers, favored by a strong yen and a flourishing economy. The amount of artistic imports to Japan during this time rose to nearly 20 billion francs, around €3 billion. Finally, it was during the 1980s that businesses began to collect artwork: which was the case for IBM and Philip Morris, for example. These elements created a strong demand in the art market, with...

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Athens Biennial or art crisis

Athens, 7 December 2011, Art Media Agency (AMA). The Greek capital is currently presenting the third art Biennial until 11 December 2011, organised by the trio XYZ (Xenia Kalpaktsoglou, Poka-Yio, Augustine Zenakos), along with curator and art theorist, Nicolas Bourriaud. The Biennial is being held around an improbable meeting which is the base of a reflection on sociopolitical and financial reality, through a universal and poetic narration on humanity: The Little Prince meets Walter Benjamin. The exhibition, called Monodrome is meant to be a commentary on the Greek crisis, however, the uneasiness created by the displayed works, resounds the reticence of the European project. The biennial is open to discussion around the subject “Crisis and Culture”, organised by Athens International Film Festival. Symbolically, the Biennial is installed in an abandoned school in the heart of the more underestimated areas of the city. It is an imposing abandoned building of the 1930s, where the painting flakes away and the walls are covered with graffiti scrawled by the school students. The soundtrack of an installation, representing crowds chanting slogans resounds on the floor surrounding the visitors. In one corner, marble sculptures representing distorted boxes are displayed as if they were old forgotten cardboard boxes. In another room, a television broadcast presents extracts of the great Greek sports victories with cheers of the public. Neither the artists nor the curator of the exhibition are paid for their work. The daily management of the Biennial is carried out by volunteers; there are no sponsors. It would be considered obscene to support such a “useless” event, when Greece was on the edge of implosion. Several artists will be presented, such as the Greek designer Kostas Bassanos, conceptual artist Julien Langendorff and filmmakers, Jean-Luc Godard and Anne Meville. In fact, the third Biennial of Athens entitled...

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Art market: first signs of instability?

Hong Kong, 4 October 2011, Art Media Agency (AMA). Is the art market escaping the crisis? This week numerous press articles tried to answer this question. Judging from some of the positions taken, we could point out some tendencies that currently could not be qualified as alarming or even disturbing. The recent Asian art auctions held at Sotheby’s in Hong Kong, as well as at Christie’s in New York, were victims of commentaries. When talking about these sessions, it is important to note that only the higher market and objects of certain quality are, according to many specialists, insensitive to the financial crisis. A Georgina Adam article, published in Financial Times, makes a recapitulation of American sales that, in her opinion, were successful in the context of the crisis with an average of 70-75% of lots sold. This percentage could go under the bar of 60% in the case of contemporary art, all the while reaching very positive results in the modern and ancient art market. We find the same percentage of unsold lots from the Asian contemporary art auction which took place at Sotheby’s on 3 October in Hong Kong: 176 lots were proposed, 27% of which were unsold. This provoked many analysts of the market who now believe that the demand for Asian contemporary art is dropping rapidly. An article by James Pomfret, published by Reuters clearly announced this with headline “Cracks appear in Asian demand for contemporary art”. For Marion Maneker, from the Artmarketmonitor website, this last affirmation is completely false and the Hong Kong auction was a success. According to him the percentages of unsold pieces is still weak and this manifests the good health of the art market. The last results are going in that direction as Sotheby’s have succeeded in selling 95% of the lots proposed...

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Artelligence: how to manage one’s art collection

New York, 25 August 2011, Art Media Agency (AMA). In a recent article, Bloomberg tried to decipher what the present mood on the New York art market is in these times of crisis. The agency interviewed former art trader and gallery owner Asher Edelman. He was not particularly reassuring. Edelman declared that on the secondary market, people are ready to sell for a loss of 20% of the price they had initially hoped to obtain. According to Edelman, this significant drop is linked to the fear and insecurity currently prevailing over the financial markets. He said: “I believe that people are very frightened. They are scared of what’s happening in the world and want to derive some profit out of their works of art.” Interviewed by the Journal des Arts in 2008 when Lehman Brothers went under, the business man had a similar point of view, indicating: “We are at the beginning of a fall in the art market, which always follows on from the movements of the rest of the economy. Suddenly, pieces will not find a buyer. Obviously, if you are selling a superb Malevitch, you will find someone to buy it. And if you sell pieces at 10 to 20% less than their last result in public auction, you will also find buyers.” For investors who do not want to sell at a loss but wish to recover a part of their money invested in art, another solution is possible: a loan guaranteed by using one or several of their works of art as collateral. It’s a way of anticipating the market’s volatility to obtain a certain amount of money. However, this option is not always the most profitable. As a general rule, the loan is never higher than half the actual value of the work, interest rates remain fairly high (approximately...

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