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CMBC Exploring Artwork Banking Business

2007-8-13

 

Securities Daily  Zhang Shengnan

Recently, the reporter learned from the Beijing Administration Department of CMBC that CMBC has launched three innovative financial products – artwork investment plan, “Taste of Life” financial plan, and Gook Luck Package 4, each with annual return rate of 3%-20%, fully reflecting the major trend of diversified investment for the financial products of banks. The artwork investment plan is a high-end financial product leading the market that is first introduced by CMBC, investing in the “Contemporary Chinese Paintings” sector with huge appreciation potential, with expected annual yields of 0%-18%. This unique perspective caught the attention caught the attention of the reporter.   　　

In the past two years when the Chinese artwork market is experiencing a double-digit growth era, more and more investors are no longer satisfied with participation as a layman, but requiring comprehensive, multi-angle and wide-scope artwork investment service. After research CMBC found that in a mature international market, artwork banking business can fully meet customer demand for asset management. With intensified competitions between domestic banks and the development of business innovations, the artwork banking business has unlimited potential for development.
　　
Studies show that a huge high-income class has emerged in China, taking the contemporary artwork market as example, this sector occupies at least 20% of the entire artwork market. Currently in the domestic market the trading volume of the public auction market should be less than one billion yuan, and the overseas part should not exceed 1.5 billion yuan, and the trading volume not known to the public should be 3-5 billion yuan, hence we can calculate that the approximate scale of the entire artwork market should be 5.5-7.5 billion yuan, which means many investment opportunities.   　　

However, considerable technical difficulty exists in artwork investment; hence collective investment by leveraging the strength of experts is an effective approach.  

　　Foreign Banks Are Influential Because of Early Involvement

As early as in the last century the foreign banks have participated into the artwork investment sector, so they are influential in the artwork investment market. UBS searches the best artworks around the world, engaging in collection transactions, and thereby influencing the prices of artworks and customer transactions. Citibank and JP Morgan also started very early to establish their own collections. 　　

Foreign banks involve in the artwork market mainly through two methods – one, purchase artwork with growth potential as investment or collection of the bank; two, integrate artwork transaction into private banking business and wealth management plan as a service provided to the clients.　　

UBS is a global leading institution for wealth management that is a comprehensive service mainly customized for the high-end clients, covering asset management, heritage planning, enterprising financing consultation, and artwork investment service etc. Artwork banking is a sophisticated service offered by UBS to the high-end asset management clients who love art. At the request of a customer, UBS will identify and study the opportunity to buy and sell artwork, and proposing goal-oriented investment strategy.

 

 

 

 

 

 

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