Watches, antiques offer alternatives

In the current economic situation, in which bank interest rates are less attractive, tangible precious items like luxury watches, antiques and jewellery can be more lucrative alternatives.

Compared with current interest rates of 0.75-3 per cent, precious goods can generate profits from 15 per cent to as high as 70 per cent when resold.

"Investing in a bank savings account in this economic situation, combined with the present currency uncertainty, is a less-attractive option, while the value of luxury items keep rising each year," said Salisar Eiammanoch, Thailand country manager of Singaporean-based watch retailer Yafriro Boutique le Temps.

The company sells 18 luxury-watch brands.

Take for example Patek Philippe, a luxury-watch brand that is at an all-time high demand, with its value dramatically rising 70 per cent only a few years after purchase. The value of other brands typically increase 15 per cent.

In the antique market, prices can rise

20-40 per cent, depending on how difficult it is to obtain certain items. For example,

the price of antique Cambodian amulets, which one source said could be found quite easily, typically increase from Bt3,000 to Bt12,000.

Retailers in luxury watches and antiques agree that two markets have continued to show good growth despite the current unfavourable economic situation.

"The economy is not a major factor," said Narun Thamavaranukup, managing director of luxury watch retailer PMT The Hour Glass.

"It may slow down customers' decisions a bit compared with during a booming economy. But PMT has still experienced 35 per cent sales growth these past few years."

One antique-market source even said the value of antiques had never declined, no matter how bad the economy was.

Instead, in the antique market many pieces have become rare, which is a major factor that significantly drives up their value. Similarly, a shortage of watchmakers with the ability to create perfect luxury watches, in both decoration and mechanical works, is a major problem, because this leads to lower watch production each year and an eventual surge in value. Narun said 60 per cent of a watch's price now went to the watchmaker.

Salisar estimates there are a little more than 10 famous watchmakers left in the market, most in Switzerland, the top country for luxury watches.

"Producing a luxury watch requires watchmakers to sit and work on creating watches for more than 10 hours a day and at least three months to complete one. It requires great dedication, and not many of the new generation want to put in that much effort," Narun said.

Prices of jewellery in the resale market also keep going up, especially when decorated with many precious stones. The sources could not cite official market-value figures for luxury watches and antiques, but their experience was that the purchasing situation is good.

Although luxury items give a much better return than do savings accounts, not all retailers experience success.

Yai, an antique retailer for 20 years and who currently has a shop called Platina in River City shopping mall, said he had witnessed a 50-per-cent drop in sales since early this year.

"Potential buyers prefer to come and make a survey first, then wait for a better economic situation before making a purchasing decision," he said.

Narun said in the watch market, although the value of luxury watches tend to rise all the time, not every watch can guarantee a good resale price in the secondary market. This depends on brand, materials, machinery and the extent to which the watch models are available in the global market.

"From the retailers' perspective, we don't want people just to look at luxury watches as an investment. Of course, there are those who buy luxury watches for that objective, but the first reason of most customers is their passion for the watches they desire," Narun said.

Meanwhile, Salisar suggested people not just keep focusing on investing in antiques, jewellery and high-end watches. Instead, they should spread their investment to other choices, such as mutual funds, currencies, gold, property and bank accounts, the better to manage their risks.