Can a bear equity market ignite interest in fine wines as an alternative investment in China?
China’s rise as the world’s second biggest wine market will also benefit Hong Kong, which is the region’s auction and trading centre for fine wines
With China set to emerge as the world’s second largest wine market by 2021, industry observers expect an increase in the number of investors in the mainland who value fine wine as an alternative investment.
The current bear capital market in the mainland might make the point even more apparent for Chinese investors, according to UK-based fine wine investment company Cult Wines.
This week, Shanghai’s benchmark stock index plunged to its lowest level in two years. It entered bear territory this week after losing more than 20 per cent of its value since its peak in January.
“The current bear market in China is actually supportive of Chinese investors looking to diversify their portfolios globally and considering an allocation to the fine wine market,” said Lu Yijun, research analyst at Cult Wines, adding that the subsequent impact of increasing market anxiety will continue to support positive trends in the fine wine market over the long term.
The company’s latest study showed that fine wine investments were less volatile than global equity markets and is also little correlated to the traditional financial markets.
