#221 ~ Coronavirus and the watch market

Hello! This is Kaneko from Commit Ginza. Thank you to all our readers for always reading our magazine. Thank you again for your encouraging words. This is very encouraging. Everyone is feeling very anxious about the coronavirus. At Commit, we are also taking every precaution to prevent the spread of infection. Please be extremely careful. The spread of the coronavirus has led to a drop in global stock prices The economy is in complete chaos and it looks like we are heading into a recession with no end in sight. So, I would like to share my personal views on the state of the watch market during the Lehman Shock. I would like to consider the future market price of watches. First of all, the important thing to consider when thinking about watch prices is, The luxury watch market is not based on domestic prices, but on global prices. The premise is that prices are determined by supply and demand. For that reason, there are some that are produced every day like the current products and the number of individuals increases, Even if an item is discontinued and the number of items remaining in the world is fixed, the rate of decline and market price will vary. In addition, global prices are denominated in US dollars, so this relationship is also important. In the few years following the Lehman Shock in 2008, the exchange rate fell to the 70 yen to the dollar range. At the time, the Reference 16520 Daytona was trading for over $10,000 overseas. Domestically, the market price in Japan was around 800,000 yen, plus import duty, which was around 900,000 yen. As you all know, Abenomics then saw the exchange rate rise to the 120 yen range. The economy is also showing signs of recovery, and overseas, the price of oil is expected to increase by about 10% to $11,000-12,000. It was being traded, but with the yen weakening to 120 yen, this would be equivalent to 1.5 to 1.6 million yen. In fact, even though the price hasn't increased that much, It is not uncommon for prices to rise due to these external factors. After that, the Ref. 16520/El Primero became increasingly popular and its price soared even in US dollar terms. At first, as prices rose overall, the final model number P serial number, then the A serial number It was particularly popular, but as I said before, even if it was exchanged in terms of the absolute number of individuals, A tritium dial that will never be available again is better than a Luminova dial that is available. It added value. We talked about supply and demand, but the Paul Newman Daytona costs over 20 million yen, Currently, if the condition is such that it is rare, it can go for hundreds of millions of yen. Speaking of rare watches with limited stock, the Ref. 6541 Milgauss and the Ref. 16610 Panama dial are some examples. Even though there are less than one-tenth as many of them, the Paul Newman is more expensive. This has value in terms of absolute numbers, but it can also be said to be a balance with demand. The value and price of a watch is always determined by the demand - the number of people who want it - and the supply - the number of people who want to sell it. Next time, we will talk about price falls and rises during economic downturns. Commit Ginza Executive Advisor Tsuyoshi Kaneko