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| Sunday, 30 October 2005 |
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Junior Observer |  |
| News Business Features Editorial
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From Abroad Coin collectors face rough times Coins superseded (replaced) the barter system (exchange of goods and services) of yore and for many centuries have served as an exchange medium for trade. Their monetary functions aside, they bring pleasure to coin collectors for both their aesthetic and financial allure (attraction). Coins and banknotes have long been popular collectibles locally alongside stamps, pens and amulets. But in the past few years, the popularity of coin collecting in Thailand has greatly declined. According to coin dealers, over 80 per cent of the business has evaporated since the 1997-98 economic crisis and it has not yet picked up. The doldrums (state of depression) have been even more pronounced in the past two years, they say. "The reason is that people have ceased to spend, especially on any non-essentials. And coins are considered something that is not needed," says Veerachai Smitasin, owner of Sio Siah Kee, a store selling rare collections of stamps, coins, banknotes and other items in Bangkok. However, collecting coins and banknotes is still considered attractive for those who can afford to devote some disposable cash to the hobby, though the returns may not be as exciting as other asset classes sometimes bring. Basically, coins can be classified according to their metal composition: copper, tin, nickel, silver, and gold. The face values vary from 10 baht (Thai currency) to 20 baht for copper-nickel, tin, and nickel. For silver, mostly commemorative coins issued on special occasions, the prices range from 50 baht to 600 baht. Polished versions will be priced higher, up to 1,200 baht. Gold coins, which are also mainly issued during special events, are priced between 400 and 9,000 baht for the face value and up to 12,000 baht for highly polished ones. Veerachai explained that the prices of these special coins can rise by 20 per cent within one or two months. However, according to an official at the Bureau of Grand National Treasure at Treasury Department, a collection issued for the fifth-cycle (60th) birthday of His Majesty the King was one that was highly in demand, with prices rising by 300 per cent within a few weeks of its issue. Additionally, the value of old collections that are difficult to find can also grow spectacularly. For instance, one baht coins produced during the reign of King Rama V can fetch several thousand baht due to their rarity. There are also times that the prices of newly launched coins, particularly silver and gold, rise promptly to even double their face values within a few weeks when speculation is heavy in the market. "This kind of speculation sometimes spoils the real market value and hinders the functioning of the market mechanism," Veerachai said. As with any collectible, how much a coin is worth depends on what someone is willing to pay for it. Prices vary according to the original quantity of coins produced, demand in the market, timing, and condition of coins. Limited editions tend to gain steadily in value as their availability inevitably shrinks over time. Usually, the older the collection, the higher the value, though that is not always the case. No matter how old or recent a coin is, the returns could disappoint a collector if no one in the market wants that particular item. And coins are no different from any other investment in that they have a certain level of risk. Those pursuing the hobby for investment purposes should understand and be prepared for the risks. Specifically, counterfeit (fake) and altered coins are not uncommon, and most amateurs would be unable to spot the differences. Therefore, it's necessary to seek knowledge beforehand, either through self-help guidebooks and catalogues or professionals. Most counterfeit items are crude in their design compared to the genuine versions and are clearly uneven when placed on a flat surface. The quality of materials used is lower and usually the coins are lighter when compared to the genuine ones. Therefore, it's necessary to make an effort to study the hobby and the market in order to avoid losing money on overgraded or counterfeit coins. The places that one can find collectible coins include coin shops, dealers, web sites, mail order, auctions, flea markets and through other collectors. Bangkok Post |
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