News

Prices down, prize money up

29th Mar 2009

Herald Sun (Business News) - Karina Barrymore - Monday, 30 March

PRICES are down and prize money is up. Horses - the original trading stock - could be about to benefit from the financial downturn.

The plight of the financial share market looks set to reignite interest in the thoroughbred industry, according to Inglis managing director Mark Webster.

A spate of first-time investors has already hit sales, as the popularity of racing syndicates surge, according to Mr Webster.

However, the company has started operating its own share market to further boost the industry.

The market allows people to buy and sell shares in horse syndicates.

"Racing syndicates have become far more sophisticated over recent years with businesses setting up to pull new owners into the industry," he said.

Like the financial markets, prices in the horse market are also down at the moment.

At the same time rising prize pools (dividends) were providing a further drawcard.

The Inglis Sharemarket lists racehorse shares that are for sale by licensed syndication companies.

It set up the market in January this year to help syndicators on-sell shares in horses to public investors.

And, like any investment, the horses come with the obligatory Product Disclosure Statement, which is mandatory for all listings.

Since 2003, racehorse syndication has been governed by the investment watchdog, the Australian Securities and Investments Commission.

Syndicators who meet ASIC requirements are given an Australian Financial Services Licence. Only licensed syndicators are allowed to list on the Inglis Sharemarket.

About 40 horses are currently listed on the horse market, with shares ranging from $19,500 to about $2500.

The biggest syndicate listed was a total of $195,000, with only one of 10 shares still available for sale at $19,500.

Millions of dollars are expected to change hands at the Easter yearling and brood mare sales starting next week as more than 1200 thoroughbreds are put up for auction.

However, prices are expected to be down.

Turnover last year at the Easter sales totalled about $193 million, but Mr Webster said prices could be down by about 30 per cent this year.

"We are not immune from the economy and other sales have already been down about 30 per cent in value," he said.

"We hope to do better than that but we won't be surprised if we are consistent with the other sales.

"However even if it is down 30 per cent our market is at least still stronger than the share market which has fallen 10 or 12 years," Mr Webster said.

"People are drawn by the entertainment and the emotion, the art and science of horse breeding and the promise of finding a pot of gold at the sales.

"Apart from the obvious thrill of the sport of kings, it can offer a pretty good return," Mr Webster said.

"One of our graduates, the ambitiously named Racing To Win, was bought for just $40,000 in Easter 2004.

"Since then he has won more than $3.5 million and is still living up to his name."