Bloomberg News

Coins Lure BRIC Bidders to N.Y. as Hobby Becomes Investment (1)

January 10, 2014

Pedro I gold 6400 Reis 1822-R

Pedro I gold 6400 Reis 1822-R, the first coin struck in independent Brazil, fetched $499,375 in New York this week. Heritage Auctions, which sold the piece, said the price was an auction record for an Brazilian coin. Source: Heritage Auctions via Bloomberg

Never mind the Bitcoin craze. Gold and silver (PZG:US) coins starring Russian czars, Chinese leaders and Roman emperors are igniting bidding wars as numismatic buffs compete with investors and wealthy collectors from emerging economies for the tiny relics.

Heritage Auctions set a record this week for a Brazilian coin sold at auction when a gold 1822 piece depicting the country’s first Emperor, Pedro I, fetched $499,375 in New York, said Cristiano Bierrenbach, the Dallas-based company’s head of world coins. Six of the 10 bidders were from Brazil. A 1711 Mexican Felipe V gold royal cob 8 escudos brought $293,750.

The sales were part of the 42nd annual New York International Numismatic Convention, the largest international gathering of dealers and auctioneers in the field of ancient and world coins. The event, running through Jan. 13 at the Waldorf Astoria Hotel, showcases an increasingly global market for the collectibles. In addition to a series of auctions, it includes 120 dealers hawking coins dating back to ancient Greece.

“Collecting coins used to be more of a hobby,” said Kevin Foley, the convention’s bourse chairman. “Now it’s an investment area, with people paying millions for coins.”

The most expensive coin at auction, a 1794 Flowing Hair silver U.S. dollar, fetched $10 million at Stack’s Bowers Galleries last January in New York. In 2012, an anonymous collector paid $4.4 million for a 1740 Russian coin at Zurich-based Sincona AG, the auction house said.

“There is an increasing pool of bidders and buyers from China, Russia, Eastern Europe, India and Latin America,” Bierrenbach said. “It’s people who are coming up in the upper middle class and have more disposable income.”

Easy Storage

Heritage Auctions sold $37 million of world and ancient coins in 2013, a 131 percent increase from 2008. Its sales of U.S. coins fell 7 percent during the same period.

Historic significance is one appeal of rare coins; size is another. Unlike such larger collectibles as fine art, antiques, wine and automobiles, coins are easy to store and transport.

“You can have tens of millions in rare coins and keep them in your safe deposit box,” said Brian Kendrella, president of Irvine, California-based Stack’s Bowers.

Numismatic Guaranty Corp., headquartered in Sarasota, Florida, will authenticate, grade and encase any coin for a fee of $14 to $600, according to Max Spiegel, the company’s vice president of sales and marketing. If it turns out to be a fake, the company will buy the coin for the current market value.

Bierrenbach said Heritage Auctions sold $14.6 million of ancient and world coins earlier this week and expects more than $5 million in transactions at the Jan. 14 sale of 1,900 world coins from the trove of Eric P. Newman, a 102-year-old collector from St. Louis.

Czar’s Son

Russian and ancient coins brought $6.5 million during a two-day sale that ended at 1 a.m. today at the convention, said Dmitry Markov of New York-based Dmitry Markov Coins & Medals, which organized the sale with London-based Baldwin’s Auctions Ltd. and M&M Numismatics Ltd. in Washington.

The top lot was an 1876 gold 25 rubles coin commemorating the 30th birthday of Russian czar Alexander II’s son Vladimir, Markov said. It fetched $325,000, surpassing the presale estimate of $200,000.

More than a half of all lots went to Russian buyers, Markov said.

Roman coins are popular with international collectors, including those from Russia and China.

‘Wider Acceptance’

Classical Numismatic Group Inc., which has offices in London and Lancaster, Pennsylvania, said it sold $6.35 million of classical and ancient coins in a four-part sale that exceeded its presale target by 63 percent. The top lot was a gold coin from the reign of Roman Emperor Probus (276-282 A.D.) that fetched $190,000 against the presale estimate of $75,000.

Four live auctions by Stack’s Bowers Galleries begin today at the Waldorf Astoria. One highlight is a machine made, 1755 Colombian coin estimated at $100,000 to $150,000.

“In the past five years there’s been a wider acceptance of rare coins as a collectible,” Kendrella said. “Anybody who is our customer looks at investing as a component of their purchase.”

To contact the reporter on this story: Katya Kazakina in New York at kkazakina@bloomberg.net


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