Has Stability Arrived For Fine Wine Market?

January 26, 2016

For the first time since July 2010 the bid:offer ratio on Liv-ex (the total value of bids on the Liv-ex exchange divided by the total value of offers) has risen past 100%, a positive sign for fine wine prices as, historically, a bid:offer ratio of over 50% indicates an uptrend in the market – and price stability.

The last time the 100% ratio was seen was when the China-led bull run pushed Bordeaux prices to such terrifying heights.

But with the ‘Chinese-factor’ now largely removed from the market, what’s causing the current movement?

There are a number of factors helping the fine wine market at present. Liv-ex noted: “Recent currency movements have definitely been a driver behind trade on the exchange with the euro strengthening against sterling from November, helping to push the Liv-ex 50 index higher.

“The average bid:offer spread is also at a wide 20%. Historically a level below 15% has been an indicator of sustained price rises. In addition, anecdotal evidence suggests the majority of sellers still remain on the sidelines, having just returned from the seasonal holiday.”

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