News

A Stable Market - Against All Odds

12th Jan 2009

Aushorse - Media release - Sunday 11 January 2009

The Australian breeding and racing industry has defied economic trends this week at the Magic Millions Sales on the Gold Coast and in tough financial times across the world, proven its long term sustainability. "This is a watershed moment for the Australian thoroughbred industry with this sale performing better than any other sales around the world in the last six months. Results prove how well our horses are regarded by the most influential buyers locally and internationally," said Aushorse Chairman Antony Thompson.

A drop of just 16% in the average price during the Select Sessions 1-4 of the Magic Millions Yearling Sale has given Australian breeders a much needed boost in confidence as they look ahead to remaining 2009 sales.

Early predictions in some quarters had been for a major downturn at the sales season opener on the Gold Coast. This speculation was fuelled by huge losses at major Northern Hemisphere sales late last year.

However, a healthy clearance rate of 80% and average price of $131,000 at Magic Millions was a gratifying result.

On behalf of Magic Millions, Aushorse Marketing was responsible for managing the highly successful Inward Buyers Scheme. This year through the Magic Millions IBS, more than 60 buyers from regions including Singapore, Hong Kong, South Africa, the UK and New Zealand attended the Magic Millions sales.

International buyers spent more than $19million during the first four sessions of the sale.

"Aushorse was vigorous in its approach, telling the world about the high quality yearlings we have to offer here in Australia and broaden the base of buyers. It has been pleasing to see such a diverse buying bench in attendance this week," Thompson said.

Hong Kong was the most active region, spending more than $5.3 million in the first session. The Hong Kong Jockey Club alone spent $3,410,000 on a total of 19 yearlings. Their biggest single outlay was $320,000 for an Elusive Quality colt from Edinglassie Stud in NSW.

International clients claim to have secured some "great buying" at the sale with the benefit of a favourable exchange rate at a sale where most of the world's leading sires were represented

South Africa's Lionel Cohen, who secured a Danzero colt and Flying Spur filly, said he felt the market had held up "remarkably well" in the current circumstances.

"It's very encouraging to see how well this sale has held up (in the current global climate). It gives one a lot of confidence to keep investing," he said.

Cohen said there was a couple of glaring reasons why the first major Australian sale of the year had held up so well in the face of such global adversity.

"Firstly, Australia has made huge strides genetically - it's as good as anywhere in the world now and there's great depth, with a lot more horses to choose from.

"Secondly, in my opinion, Australia has a very different racing culture to most centres around the world. The way it is promoted, marketed and the publicity it receives, means Australia is definitely among the leading racing and breeding centres in the world today."

Tom Goff's Blandford Bloodstock, one of the leading buyers in the Northern Hemisphere, was attending the Magic Millions for the first time, where purchases included colts by General Nediym and More Than Ready.

"As somebody who has attended all of the major bloodstock auctions in the Northern Hemisphere over the past six months and seen sales down anything up to 50%, it was very refreshing to come to a sale that has held up so remarkably well," Goff said.

"What is particularly striking is that the Australian industry's sustainability during a recession is due in part to the excellent way in which Australian racing is run and financed.

"The great racing product has helped support the market at a time when it really needed it."

Fellow European buyer Adrian Nicoll, of BBA Ireland, reiterated those comments.

Nicoll was taken back with the strength of the sale, but explained that with the more favourable exchange rates this year he was still able to secure some excellent buying.

Nicoll's four purchases were highlighted by the $1.1million Redoute's Choice-Twist My Heart colt.

For the European members of his syndicate, the strength of the Euro against the Australian dollar has contributed another 25% of purchasing value.

After purchasing the colt in the opening session, he described it as 'amazing' for the sale to have achieved such a high average in the current climate.

Singapore trainer Michael Freedman, whose purchases included colts by Fastnet Rock, Ferocity, Secret Savings and Dane Shadow, was part of a strong contingent of buyers from that part of the world, who collectively spent more than $3.6million in Sessions 1-4.

Freedman said the class of horses racing in Singapore was constantly on the rise and quality horses were now needed for it to continue to evolve as a racing centre.

"I took up 15 horses initially and those horses have given me a good barometer of what's needed," he said.

"You can't take an average horse up there and expect to win races. It's getting more competitive there now."

Freedman's early success has seen him pick up new clients who have been encouraged to test the Australian market in search of those better class horses.

"Given my background, clients are keen for me to hunt around in Australia. I bought on behalf of several buyers who had not previously invested here."

The Select Two Session of the Magic Millions Sales concludes at the end of today with Session Three commencing this Thursday.

While International involvement was pleasing, domestic buyers also competed strongly.

Champion trainer Gai Waterhouse was the sale's leading buyer, outlaying $7million on 28 lots.

The Hall of Fame trainer bought horses on behalf of hundreds of clients and said people are still investing in horses for the reasons they always have.

She said there was nothing like the thrill of racing a winner and pointed out horses bought out of this sale can come back and race for $2million next year as part of a $6million bonus series and then compete in a $3.5million Golden Slipper.