How a lot would you pay for time?


ALTHOUGH this occurred to be an information heavy week with the Securities Fee (SC) and Financial institution Negara releasing their 2021 annual report, do indulge me by letting me focus this week’s column on a lighter subject of an alternate universe, which occurs to be an curiosity of mine – watches.

It’s in any case, the time of the yr once more, the place Watches & Wonders in Geneva, takes centrestage on the planet of horology.

For the uninitiated, Watches & Wonders organized by Fondation de la Haute Horlogerie (FHH) is without doubt one of the main worldwide watch exhibitions of the yr.

That is the place corporations of long-standing heritage and outstanding manufacturers showcase their new assortment for 2022. Prior to now, Watches & Wonders was often known as Salon Worldwide de la Haute Horlogerie (SIHH) which along with Baselworld, have been a “mark your calendar” occasions.

Following a few of the large manufacturers like Rolex, Tudor and Patek Phillipe pulling out of Baselworld in 2020 to host their very own truthful, Watches & Wonders stays the primary occasion. In 2020, as a result of pandemic, Watches & Wonders was transformed to an internet format.

This yr marks the primary time it hosts a primary in-person version since then.

Therefore, the joy is out of the world, no much less due to the precursor of the latest Omega x Swatch Moonswatch collaboration international launch on March twenty sixth, 2022.Within the post-pandemic actuality, many companies are struggling attributable to extended border closures and financial shutdowns.

Many resilient and long-standing companies shuttered, by no means to return.

Industries have been disrupted and the panorama modified throughout sectors. But one market particularly has remained evergreen amidst the tumultuous financial cycle previously a number of years. That occurs to be the posh watch market.

To place it in context, international retail and client spending dipped in the course of the pandemic.

Nevertheless, demand for luxurious items (watches, purses) has been stronger than ever.

The luxurious watch market not solely outperformed different retail or client segments on the major market however extra astonishingly, the secondary market went completely berserk.

Taking the basic barometer for the posh watch market, the Rolex Submariner Date Stainless Metal (Sub), its promoting value for the previous 5 years paints the image for a lot of the sought-after watch manufacturers and fashions.

In actual fact, trying on the value development within the chart, it’s thought of fairly modest, relative to precise broader conditions ongoing within the watch market.

If one have been to check to the “grail watches”, just like the discontinued stainless-steel Patek Nautilus 5711/1A blue dial, which final retailed for round RM130,000, the secondary market in the present day is in truth asking for above RM1mil.

The Audemar Piguet 15500ST blue dial which was retailing for less than RM74,000 has a secondary market price ticket of RM500,000 on common.

Many blame the overwhelming demand and low provide that’s at the moment plaguing the trade ensuing from the manufacturing interruption in the course of the pandemic.

Some attribute it to the upper price of commodities, which types a part of the price construction of the watch and inflationary strain.

There are even claims that new wealth acquired from cryptocurrency and non-fungible tokens (NFTs) are driving the demand.

Others merely imagine it’s solely due to the surplus liquidity of cash provide within the financial system which is the direct consequence of unfastened financial insurance policies by central banks around the globe.

Social media and burgeoning higher center class

The reality of the matter is the posh watch market, particularly the stainless-steel sports activities fashions, have been on an upward development for the previous decade. Whereas it’s predominantly inside the manufacturers of Patek Phillipe, Rolex and Audemars Piguet, we see the spillover impact slowly transferring to different manufacturers as properly. The rationale why these three manufacturers particularly are in a position to maintain its value is their worth proposition by way of distinctive craftsmanship, lengthy standing heritage and finite provide. They don’t seem to be owned by conglomerates or listed corporations the place gross sales goal is the primary driver of the enterprise. High quality trumps all the pieces else.

Social media, a product of development in know-how is one other issue that drives demand for the posh watches. Prior to now, we solely see the excessive society and gala occasions the place folks don such costly wrist watches. At this time, on social media, it turns into an on a regular basis put on. Some even change their wrist watch throughout varied manufacturers and fashions each day. It creates a hype and units a development amongst the folks, no matter one’s monetary means. In maintaining with Joneses, value is hardly a deterrent for one who needs it badly.

In the end, the burgeoning higher center class in society contributes to natural progress in demand. We should perceive that as society progresses, earnings will increase and extra wealth is unfold the world over, the demand naturally grows.

Take Rolex for example. The annual manufacturing is claimed to be round a million items, whereas Audemars Piguet delivers 50,000 items each year. With the inhabitants rising and the prosperous rising by the day, naturally the demand would far outstrip provide.

Watches to turn into a viable asset class?

If we have been to trace historic knowledge, there may be sufficient proof to substantiate sure luxurious watch fashions really hedge in opposition to inflation. There are watches that even multiply wealth over time. Most Gerald Genta designed metal sports activities watches within the Nineteen Seventies have been in a position to fetch astronomical costs by public sale homes reminiscent of Sotheby’s or Philips. So it’s not in any respect farfetched to contemplate watches as a possible asset class to the same old funding belongings that are conversant in in the present day. Assuming one has the means, I imagine most wouldn’t hesitate to buy a Patek at retail value over say, gold at any given time. Moreover, if cryptocurrencies or NFTs which in my opinion, holds no intrinsic worth and serve no utility aside from hypothesis, may be handled as a possible funding asset class, what extra luxurious watches. I for one would select a Rolex as a substitute of bitcoin or dogecoin.

Totem of human endeavour and achievements

Be that as it could, not all the pieces needs to be measured in {dollars} and cents. Many a time, worth derived can’t be immediately measured in financial phrases. Writing for a column in a enterprise paper weekly could in all probability mission the impression that the columnist is one who’s fixated on cash, however I want to take this chance to share a private tackle my ardour for watches.

Quoting Hans Wilsdorf, the founding father of Rolex, it’s his perception that watches should not a standing image or reflection of wealth however a totem of achievements for mankind. With each human endeavour, Rolex aspires to be part of it. This is the reason we see the Rolex Explorer accompanied Sir Edmund Hillary and Tenzing Norgay after they first conquered Mount Everest in 1953. One other instance could be when the Rolex Deepsea was a part of James Cameron’s expedition to the world’s deepest level, for the primary time in 52 years and solely the second time in historical past. Moreover, it’s not simply Nike who constructed its model sponsoring the best of all time. Rolex celebrates the achievements of many legends by the course of historical past such because the likes of Jack Nicklaus, Roger Federer and Dame Kiri Te Kanawa.

Personally, an ideal watch symbolizes extra than simply standing or wealth. It’s a totem to mark milestones in life, an heirloom for the following technology and easily an exquisite technique to protect treasured reminiscences. In essence, to me, proudly owning a watch is the closest factor to purchasing time. So how a lot would you pay to purchase time?

Ng Zhu Hann is the CEO of Tradeview Capital. He’s additionally a lawyer and the writer of “As soon as Upon A Time In Bursa”. The views expressed listed here are the author’s personal.

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