MONUMENTAL SALES – THE BREXIT FACTOR: 31 October 2016
SITTING at a laptop at the weekend is blessed re-lief from six days at one of the most intense sales in recent experience.
Selling sessions of 11 hours or more with all the befores, afters and durings mean walking about 10 miles a day (16km) with a bag of reference material over the shoulder. It takes a day or two to feel hu-man again.
Thank Heavens for 32% withdrawals as discussed last Monday. This – the Tattersalls Autumn Horses in Training Sale – was a monumental event. The average was up 35%. Median up by the same 35%.
Plus a clearance rate of 92% which is excellent and can be taken to being very close to reality, unlike some.
At the end of last week, Chairman Edmond Ma-hony’s post-sale statement included, “Every year we reflect on the extraordinary diversity of buyers, both domestic and overseas, who attend the Au-tumn Horses in Training, but the sheer number of people here this week has been almost overwhelm-ing‖.
Last year five lots made more than 200,000 guin-eas. This year there were twelve. Some of the over-seas spending on good (but not that good) race-horses was eye-watering.―Scary‖ was the comment of hardened Tatts professionals who support the auctioneers on the rostrum and can identify every bid from every country.
At AllanBloodlines we had a productive sale. In the local language we ―got six bought‖ at several levels which gets nods of approval in a market where ―getting anything bought‖ is an achievement if work-ing to proper valuations and not getting ―sucked up-wards‖. That being said, we are still short of one six figure colt. Another day….
Later in the sale, the extraordinary ―Juddmonte Ef-fect‖, very valuable to Tattersalls, persisted – held back until the Wednesday when in some weaker markets enthusiasm is waning before the traditional drop-off on Thursday.
The Juddmonte draft is awaited by many buyers. The ring fills as dusk falls. It is a spectator sport. Valuations that should be strict are thrown to the four winds. ―Chuck on a green sheet and add 50% to the price‖ is a regular observation.
Nearly 40 Juddmonte colts and geldings go through continuously, with just a few fillies of lesser pedigree but can be described as ―In Training‖ whether in full or light work.
The description on the page ―In Training‖ is part of the Conditions of Sale and is ubiquitous in the Horses in Training Sale. Wind-testing is permitted. ―Out of Training‖ (as is the case for most but cer-tainly not all fillies in the breeding stock sale), means no wind testing.
To put it another way, ―Out of Training‖ means ―Don’t spin this round a sound-proofed lunge ring‖ or ―Don’t gallop this up a hill‖.
We should look to the Breeding Stock sales for…well….breeding stock. But how will prices be?
Some of the massive spending might be attributable to the change in sterling fol-lowing the Brexit vote. Contrary to the dire ―Project Fear‖ predictions of the ―Remain‖ campaigners, now known as Remoaners‖, every economic indicator has risen since that vote and many grant funding assurances are made or in the pipeline.
The Nissan decision on Friday to increase its in-vestment in new models at the Sunderland plant – not quit altogether as constantly predicted -saluted the bravery of the voters of Sunderland who any-way voted 61% to Leave.
But the currency has reduced. Some say corrected. Some say dropped. What may this mean for the price in Rand of UK-sourced bloodstock?
Today it should be 25% lower than it was not long ago. But that was not the case at the Horses in Training Sales because sterling prices were 35% up.
Will sterling rise again? Surely it was previously too strong and is now heavily affected by the factor that financial markets most hate: uncertainty. Whereas the leaders of all the relevant nations (excluding the EU lawmakers) are now mostly being careful what they say, the posturing and uncertainty will reduce once negotiations start in the European Spring.
There may be a bit of inflation in the meantime (small as opposed to tiny now), but once the button is pressed, sterling should rise somewhat. The time in between may prove to be the best time to buy.
We are already looking ahead to the imminent breeding stock sales. Last week was for racehorses, not broodmares or fillies for stud. Soon we shall be looking at the effect of a return to potential overproduction at the coal face of the foal and breeding stock markets.
It is with great anticipation that we study the Goffs and Tattersalls breed-ing stock catalogues in search of pedigrees and conformation in which to invest ―At Home and Abroad‖.
South Africa may be ―Home‖ for most readers. Or ―Abroad‖ for a few. For a small number of us, it is both. – tt.