Business & Economy

Tuesday, 30 September 2008 12:02

The allure of rare coins

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{pp}A set of rare South African coins sold for R325,000 on bidorbuy confirms that rare coins are an attractive investment venue, especially in times of economic downturn

South African auction site and online market place recently recorded another major successful sale of rare coins. A set of rare South African coins was sold for R325,000. The set includes thirty two coins dating from between 1892 and 1900. The collection is however not complete. That is why, the seller says, the set was offered at a discounted price. The jewels of the collection are the 1893 half pond and 1892 single shaft pond coins. The seller, who prefers to remain anonymous, as in usual in this type of transaction, says that the thirty two coins date from the Kruger Republic.

“There is a rich and interesting history behind the ZAR coins from this period, and that is important for the people who collect them”, he adds. “This particular set does not have any coins from 1899, and only a few from 1900”. However, what the set does have are two very rare specimens, the 1893 half-pond and the 1982 single shaft.

The seller estimates that those two coins make up half of the R325,000 price tag: “There are only a handful of the graded ZAR 1893 half pond coins in the world and it is very difficult to get one and complete a set”, says the seller. And completing a set is of crucial importance for any collector. It is also important for investors, because a complete set ups the price significantly. In order to be considered a good investment, it is not enough for a coin to be merely rare. It must also be in a good condition. For that, collectors and investors rely heavily on grades assigned by reputable USA companies.

After grading, coins are sealed in a transparent holder and placed into a box with a “stamp of approval” that states the basic information about the coin (face value, year of issue, grade assigned, the name of the grading services). Seals are not hundred percent airtight and oxidation can continue after encapsulation, adversely affecting the condition of the coins. That is why coins are best stored in a temperature-controlled, low humidity area such as a bank safety deposit box. The rise of web sites that enable collectors to buy and sell rare coins has popularised coins as an investment vehicle.

Coins are consistently among the top performing categories on bidorbuy. In July last year, a rare 1892 ZAR coin was sold for R210,000 on the site. Another outstanding transaction recorded was the sale of a set of eleven 1892 ZAR coins for R170,000 in July 2008. An online market place like bidorbuy is especially convenient for trading in collectible items, because it has the ability to connect buyers and sellers that may be geographically distant. The buyer and seller in the R325,000 transaction are from two different South African provinces. During the three years of trading at, the buyer of the R325,000 set, who wishes to remain anonymous, has bought over three hundred product, mostly rare coins. He says that out of all those transactions he has had only one unpleasant experience: “I received a coin that was different from what I expected, but that was mostly my own fault”, he says. The buyer says that he has been collecting coins for thirty years, exclusively for their investment value.

The conventional wisdom has it that rare coins are a long-term investment, especially attractive in times of economic downturn. It is believed that an investor can expect to hold onto a rare coin for at least three to five years in order to maximise the return. However, there are always exceptions to the rules and much depends on the current supply and demand situation. In the case of the R325,000 bidorbuy sale, the seller says that he realised a profit of two hundred percent in only a couple of years. “Coins have actually made my golden nest, although I have been trading in them only two or three years. I bought coins online from bidorbuy and from eBay, as well as off-line. I was also lucky, for some of the sets I acquired contained several rare coins.” He adds that he fully expects that the buyer will be able to get similar returns: “Not only because rare coins regularly bring huge profits, but also because in this particular transactions the price was actually discounted. The estimated value of the thirty two coins is about R400,000. However, since I have my eyes on some other investment venues and since I was quite happy with the two hundred percent return, I agreed to let the collection go for R325,000.” Many of the South African coins dating between 1892 and 1902 provide particularly good returns, because they were minted in small numbers and later lost or melted to be made into jewellery. And since early South African coins were never shipped, there is no risk of someone finding a heap of them in a shipwreck.

About bidorbuy:
bidorbuy is South Africa\'s largest online marketplace. Established in 1999, the company has created a safe and convenient way for people to buy and sell goods online. As a virtual trading place that brings buyers and sellers together and allows them to buy and sell virtually anything in an exciting auction format, using the Internet, bidorbuy has created a thriving online marketplace.

Contact Information:
Lana Stevic, Marketing Coordinator
bidorbuy (Pty) Ltd.
Tel. 011 706 1629
Email This email address is being protected from spambots. You need JavaScript enabled to view it.

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