What’s happening in the market?
So far this week, Burgundy has led the market, taking 33.3% of traded value. The region has been buoyed by trades of high-value wines, including Domaine Armand Rousseau, Chambertin-Clos-de-Bèze Grand Cru 2005 and Domaine de la Romanée-Conti, La Tache Grand Cru 2006.
Champagne has increased its trade share from 12.5% last week to 18.6% this week. Since its release on Monday, Dom Perignon 2015 has driven trade in the region. It last traded at £1,590, 9.1% below is original recommended selling price. The 2008 and 2002 vintages have also changed hands.
Today’s deep dive: buying the Bordeaux dip
In our June market report, we conducted a technical analysis of the Liv-ex 1000. While the 19th consecutive negative month for the index may not sound immediately promising, low prices could provide an opportunity for current buyers.
In June, wines have been trading on average 4.68% below Market Price. In today’s deep dive, we use the Bordeaux 500, the most liquid of the Liv-ex indices, to highlight where buyers may find discounted opportunities.
For the first time since mid 2014, the Bordeaux 500’s Relative Strength Index has dipped below 30, indicating that we are firmly in oversold territory. In other words, prices have been driven down low enough to generate a buy signal.
With the market forcing offers down, participants are presented with opportunities to buy wine at significantly lower prices than in upward moving markets – buying the dip is already proving profitable for some.
Undervalued wines in the Bordeaux 500
The table below shows the Bordeaux 500 wines trading furthest below their Market Prices. The Liv-ex Market Price is defined as the best listed price for a wine in the secondary market.
*Taking into account only SIB (Standard in Bond) trades in 6×75 or 12×75 format
Of the Bordeaux 500 components, Château L’Église Clinet 2014 has traded furthest below its Market Price in June. It’s recent trade at £850 is the lowest transaction price recorded for the wine since its entry into the market at £1,300. As shown in the chart below, while the wine last traded below market, it remains listed online at £1,080. Buyers with capital to spare need not resell at a discounted price. Awarded 94 points by both Jane Anson and Neal Martin, L’Église Clinet 2014 is just entering its drinking window.
For buyers seeking to capitalise on the current state of the market, the largest sterling returns will likely be found amongst the wines with the highest price tags. Chateau Lafleur 2019 and Petrus 2018, for example, last traded £2,200 and £5,550 below their respective Market Prices.
Of the Bordeaux 500 components, 182 are currently on offer under Market Price. The table below lists the wines offered furthest below market. Topping the list are Château Troplong Mondot 2018, Château Léoville Poyferré 2011 and Le Clarence de Haut-Brion 2015.
Log in to the exchange to view these opportunities and trade.
Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real time activity of Liv-ex’s 620+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £100m of bids and offers across 20,000 wines.
