Exposure_2016

Last week exposure on the Exchange – the total value of firm bids and offers – reached a new high of £29,214,515. This figure has been climbing steadily since 2007 when exposure was at £3.3m.

As the chart above shows, this push has been boosted by an increase in bids since June 2014, the market’s low. Last month, the total value of bids overtook the total value of offers for the first time since July 2010. The bid:offer ratio – the total value of bids divided by the total value of offers – is currently at 1.07. A bid:offer ratio of 0.5 or higher has historically indicated an uptrend in the market, or at least acts as a signal for price stability.

As highlighted this morning, recent purchasing has been stimulated by currency moves: the weaker Sterling is making prices more attractive to Euro and Dollar buyers, driving demand from Europe, the USA and Asia.

Yet the surge in bids certainly appears to be a longer term trend. Demand has already impacted prices – the Liv-ex Fine Wine 50 is up 2% year to date. Going forward, the question will be whether this is sustained.