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market report

Liv-ex is an electronic exchange for fine wine used by professional merchants and collectors. Each month Liv-ex publishes a detailed Market Report analysing fine wine prices and trends in the marketplace. The Market Report is part of a package of data and services offered to subscribers of Liv-ex, with subscriptions starting at £39.95 per year.

Below is just a brief extract from the latest Market Report. An extract will be offered on wine-pages as soon as it is published each month, but for the full report and Liv-Ex's extensive services, sign-up with them at www.liv-ex.com

Liv-Ex Market Report
by Liv-ex.com, October 2005

Trading
Activity in October, whilst down on the record set in September, remained fairly robust with follow through buying from around the globe. While volumes dropped off, we continued to see prices push higher. Yquem 2001 featured again as the secondary market developed further. Exchange turnover was up 40% year on year. Stock held by the leading UK merchants rose 4.5% for the month as a handful of the larger merchants added significantly to their red Bordeaux holdings. The Liv-ex 100 gained a strong 5.5% for the month, driven almost entirely by top Bordeaux names.


(more analysis by region in the full report)


Breaking down October's trade by region, Bordeaux retained its above average share. This was a continuation of the previous months theme surrounding investment grade wines but there was also an Yquem effect. Sauternes again took a big share of the market- 11.7% of the total- but it was not all about Yquem 2001. 40% of the Sauternes trade was in Yquem back vintages and other chateaux. The other area of significant activity was, not surprisingly, Champagne- 'tis the season after all.
(French regions, and Yquem pricing analysed in the full report)

Major Movers
The table below shows the major movers, month on month, in October. A quick look at the steepening curve of the Liv-ex 100 suggests that it is amongst its constituents that the star performers are to be found. Petrus features strongly, having been a laggard during the September price surge. Of the decliners, young ports continue to find the going tough.


(Petrus and featured wines analysed in detail in full report)

Critical Corner
There have been many accusations levelled at Australian wines, most commonly that they are one-dimensional, will fall apart with age and all taste alike. One thing is certain however, Australia has been at the forefront of viticultural and vinification advances for many years now. They also lead the way in the experimentation of Stelvin closures (some 60% of the 3000 Australian wines tasted by Robert Parker recently were in screw caps).

Indeed, these qualitative myths surrounding Australian wine are laid bare by Parker in his most recent edition of “The Wine Advocate, Issue 161” where he freely admits: “given the fact that I am an undeniable Francophile, Eurocentric elitists must be shocked to see the lofty ratings and high praise bestowed on many Australian wines.” Please see below for his latest Top Ten scores:



(more analysis of Oz, and Port 2003, included in full report)

Final Thought
This month we have made some wholesale changes to our benchmark Liv-ex 100 Index. The components of the index have been selected on the basis that the wines are both sought after and relatively liquid. For this reason they do not just contain the best wines from the best vintages (the average Parker score of components is 95 points) but also have a bias towards wines that are regularly traded on Liv-ex. The index is calculated from the mid price in pounds per case between the best bid and offer on the Liv-ex trading platform.

As the table below shows, the best performing wines in 2005 to date have been concentrated in the most liquid names (read Bordeaux) as speculators have sought to front run the changes in the Sipps rules in April 2006. (this is just a snippet from detaled analysis of 2005 trading so far)


To trade on Liv-ex or subscribe for price information, visit www.liv-ex.com
Liv-ex Limited, Tel:+44 (0)207 228 2233