As Jade Becomes Rarer, a Thirst for More

May 15, 2013

As Jade Becomes Rarer, a Thirst for More

By SONIA KOLESNIKOV-JESSOP

To judge by auction prices, the appetite of collectors for top quality jade jewelry remains unsated, despite recent talk of slowing demand for luxury goods in China, where jade has traditionally been held in near-mystical reverence.

At Christie’s London last month, a simple necklace featuring two rows of graduated jadeite beads with an Art Deco diamond clasp realized £49,875, or $77,625, far exceeding its pre-sale estimate of £5,000 to £6,000. At Sotheby’s New York, also last month, a suite of gold, jade and diamonds, comprising a necklace, brooch, ear clips and ring, estimated at $30,000 to $50,000, sold for $149,000.

At Sotheby’s Hong Kong, a jadeite bangle estimated at 200,000 to 250,000 Hong Kong dollars, or $26,000 to $32,000, sold for 1.12 million, and a jadeite and diamond ring estimated at 350,000 to 500,000 dollars sold for 1 million.

Yet, not all the jade on offer at recent sales has fared so well. Some lots have barely made their estimates, and others have remained unsold.Novice buyers face particular challenges in judging the value of pieces: While there are international standards for grading diamonds and gemstones, for example, jadeite, the most precious form of jade, lacks such a standard — and every piece is different.

“It’s much easier to estimate a diamond or a ruby, comparing its size and clarity,” said Terry Chu, deputy head of jewelry at Sotheby’s Asia. “But it doesn’t work like that with jadeite. We don’t have carat, and it really takes a very experienced eye to be able to value the stone. It takes years of practice.”

Experts talk about an “optimal color” of green as the most prized and valuable — but what that is remains unclear.

“There is no formula to value jadeite,” said Vickie Sek, head of the jewelry department at Christie’s Hong Kong. “Obviously, there is the color and shade, but you must also factor in the translucence and the material. It’s really a combination of the three.”

“What is considered a good green color is very hard to explain,” Ms. Sek said in a telephone interview. “At the top, we have what we call ‘vivid emerald green,’ then there is ‘brilliant green,’ ‘intense green’ and ‘apple green.”’

“This is an internal grading, which I think most auction houses will use,” she said. “But still, it’s not an international standard.”

Jade also comes in other colors: lavender; red and yellow (the result of oxidation and color-inducing impurities); black (actually a deep green, the result of high iron content); and white (lacking coloring impurities).

“Lavender jade has been quite in demand of late at auction and is getting more expensive,” Ms. Chu of Sotheby’s said by telephone, “but green jadeite remains the most sought-after.”

Translucency is also very important, Ms. Sek said, and this, too, has different terminologies that buyers need to decipher. “When it’s very good, we will say ‘highly translucent’ or even ‘glassy translucent,’ and that’s the best,” she said. “When it’s labeled as ‘opaque,’ it means you can’t really see through the stone, and so the quality of the jade is not as high.”

Russian buyers have started to emerge as collectors of high-quality green jadeite, though most buyers are still Chinese.

“Jade is getting rarer and we have more demand from China, so it’s really a question of demand and supply,” Ms. Sek said. “Prices are going up. For the past two years they actually went up very fast, because the buying power of the Chinese went up so quickly. This year, the market is steady. It’s just stabilizing, and there is still a very strong demand.”

Graeme Thompson, head of jewelry for Bonhams Asia, said by e-mail that “dramatic” price increases in the past two or three years were “a direct result of auctions’ becoming more and more popular, as collectors seek professional advice and an objective opinion.”

Jadeite is often cut and polished without facets. This cabochon style, usually flat on the bottom, maximizes its color.

At its next Hong Kong jewelry sale on May 28, Christie’s says top lots will include a necklace, ring and earring set of jadeite cabochon and diamonds, estimated at $2.3 million to $3.5 million, as well as a piece of carved jadeite in the shape of Guanyin, the Buddhist goddess of mercy, that can be worn as a pendant and carries an estimate of $1.9 million to $3.2 million. “This is an exceptional piece because the material is so thick, and it has a very good translucency,” Ms. Sek noted.

Other lots include a pair of jadeite earrings with lapis lazuli, yellow diamond and garnet by the master Hong Kong jeweler Wallace Chan, estimated at $100,000 to $150,000, and a jadeite cabochon and diamond ring by Cartier, estimated at $250,000 to $380,000.

Meanwhile, Bonhams will offer at its Fine Jewelry and Jadeite Auction on May 25 in Hong Kong a simple lavender jadeite bangle that is valued at $240,000 to $371,000. “Jadeite bangles are difficult to price, and a bangle of good material is often sold for astronomical prices,” Mr. Thompson said. “This bangle, in lavender color, has a very even crystalline structure and evenly distributed lavender color with bright green patches.”

Another highlight of the forthcoming Bonhams sale is a jadeite double cabochon diamond ring with an evenly intense green color throughout and a jelly-like translucency.

Ms. Chu of Sotheby’s said jadeite jewelry was usually worked simply, without elaborate detail, in order to highlight the quality of the jade. “Cabochon is the most important form of jadeite in the market for the true connoisseur,” she said, “because despite being a very simple form, it is actually one of the most difficult ones to achieve, as it really exposes the quality of the jadeite.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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