Eternal Values
UNDERVALUED SHARE CERTIFICATES
The sketches of securities were once made by famous artists. Now paper share certificates are hardly produced at all. And that’s a pity
The Russian Auction House has been collecting and selling rare securities – share certificates, promissory notes and bonds – for several years. They are sure: antique securities are not only an original gift. They are a possibility to come to know and feel the financial history of the country. Who is collecting the rare securities today? With what purpose? And will the present leave a collection of share certificates and bonds to remember it with? Alexander Kuranchev, Director of the Russian Auction House CJSC, told the Watermark about it.
A small but cozy niche
— Due to the fact that we are talking about historical securities, the following comparison is natural — we develop as unhurriedly as the history represented by the securities. We have attracted very many new clients within the recent years. But our main and essential clients are the collectors. To our satisfaction, there appear more and more of them. As a rule, people who understand what the securities are, usually those close to the world of banks, finance and capital, become collectors. These people know the difference between the ordinary and privileged shares, as well as the promissory notes and bonds. They are the most challenging, grateful and consistent of our clients. They look for certain papers for their collections formed as a rule depending on their sphere of activity. Those may be collections of securities of banks, railway companies, trading organizations, public loans, the Russian gold loans etc. It is difficult but interesting to work with collectors because they see into the matter and are practically our competent colleagues.
Another important, and, I would say, propagandistic aspect of our activity is offering remarkable and extraordinary gifts. More and more of our clients are interested in purchasing rare securities for presents. Such gifts are usually purchased for those who see into the historical security papers and know their cultural, historic and collection value — for financial officers, bankers and employees of investment institutions.
Those who purchase our securities for presents often become our regular customers and show their interest in our novelties. We try to find something interesting and unusual for them.
A certificate instead of Aivazovskiy
— Another trend, which, in my opinion, we have not completely mastered yet, is the sales of historical securities for the interior decoration of financial institutions and organizations close to the stock market in their activities. I suppose it is a very promising trend. It is no secret that a lot of our financial institutions are decorated like museums — Aivazovskiy, Perov, Shishkin. The more expensive the picture, the heavier the frame, the wealthier and more advanced the company is…
Now in Russia there has appeared a stable tendency, which is already a tradition in the West, that there should necessarily be the profile emphasis in the institution decoration. If it is a bank, there should be bank stocks; if it is a trust or an investment company, there may be bonds, antique certificates for example. And it is especially important, if there is the moment of continuity of the organization and the institution which produced the antique securities placed on the wall. It bespeaks the interest of the organization in the financial activity history.
It is important for the client, and such decoration serves as a part of the company image. Per example, the leaders of MOSNARBANK are our frequent guests. It exists today under the name of MOSNARBANK — EUROFINANCE. They are pleased to receive the famous bond certificates of the Moscow National Bank for holidays or corporate events, and we do our best to find these certificates all over the world, although there remain precious few of them.
LUKOIL has collections including very interesting “profile” papers, NIKOIL (URALSIB) also has an attractive collection; it is interesting not only because of its size. Beside Russian securities, it also consists of foreign ones. And there are a lot of foreign oil securities. The most expensive of them and, I would say, the most challenging are the first American oil securities.
Many banks gather corporate collections and consider this activity an interesting and perspective money investment. And, as a matter of fact, the expenses are not so high, because the rare securities market is undervalued today, though it grows every year, according to various data, by 20–30 %. People always treat the new kind of collecting somewhat suspiciously at the beginning. Due to the fact that banknotes, stamps and coins have been sold and bought more than once, their approximate price is known; but the rare securities sales are in embryo at the moment, and there are more questions than answers.
We certainly have a number of experts and in case we need to evaluate the security which has appeared in the market for the first time, we do it quite sufficiently.
Mr. Weingarten from Germany, Head of the largest auction house in Europe specializing in historical securities only, visited us recently. His collection numbers about 50 thousand items now. He was interested to have a look at our work.
We are Mr. Weingarten’s clients; he helps us to look for Russian securities and has almost a thousand of them in his collection.
Our negotiations resulted in the decision that we will promote his auctions, which take place 5 or 6 times a year, in our market. As for us, we are not able to hold more than one or two auctions a year yet, for the collectors’ interest is not enough for more.
Our co-operation seems the more interesting because of the fact that our German colleagues have an international collection consisting of not only German but also French, English, American, Yugoslavian etc. securities. And I believe that the future will offer remarkable opportunities for such collections, because now the collectors in Russia gather mostly Russian securities, but in the future there will appear collectors interested in the American security market and other foreign securities.
Another auction of rare securities purchased in Germany will take place in Moscow this November. The securities will be inexpensive but very interesting. First of all, they are really antique, for they mostly refer to the 1830s. Secondly, most of them were issued by the Russian railway companies during the Russian railway construction. Practically all the railroads were built with the help of foreign, mostly German, investors, and that was how the securities appeared in Germany.
We’ll strike the ignorance with bond certificates
— In the future we are planning not only to sell securities, but also to popularize the financial knowledge among the people. Now the Ministry of Finance of the Russian Federation is developing a special program of financial ignorance elimination. It should be accepted before the end of the year after the approval of the State Duma.
The majority of the Russian people does not follow the development of our stock market. There appear a lot of bank products, but the peopele are not able to “digest” the new financial information and make a lot of mistakes in the process of mastering the new financial tools.
There are a lot of blames laid to the consumer’s credits. A few “people’s” primary distributions of shares of “Rosneft”, “Sberbank” and “Vneshtorgbank” have taken place recently. What is going on? The people invested their money into the shares, and now they believe that they should draw income the same way as from the time-deposit. But that is not so. For example, today the stock market has faced difficulties, and the shares are sold at a loss. The person who has bought the shares does not understand: “What’s the matter? I’m cheated!” In fact, private investments are not taught anywhere… The educational program is aimed to eliminate such vacancies on the state level. We would also like to take part in it, and have translated into Russian a small book by an American author for the children 12‑14 years old — “My first share”. We believe it is necessary to start plying with financial knowledge at this age. The book describes share or bond certificates, investments… After the approval of the American publishing house, we would like to introduce this book to our book market. And every book will contain an original antique Russian share certificate as a gift. The gift will be called “My first share certificate”. It is to call the teenager’s interest to the world of investments, stock market and other financial institutions and tools. And this share certificate may become the first collection item. Thinking about what share certificate should be the gift, we contemplated what shares could interest the youngsters — shares of McDonald’s, Coca-Cola? We have these share certificates. But as a result, we decided to give Russian securities — bonds, railway share certificates… In other countries up to 70 per cent of population invest money this way or another — it may be mutual investment funds, fiduciary management, work at the stock market. Moreover, everybody has a bank account or a deposit. Russia is still a long way from it, but it will happen one day anyway.
Within the framework of the historical securities popularization we are planning to issue a wall calendar. An original security will be carefully attached to its every page. After the end of the year it will be possible to take the securities out of the used calendar and start a collection with them. We very much hope to find an investor for this project.
Bilibin did not consider it shameful
— Before the revolution all security emissions, printing and placements were controlled by the Ministry of Internal Affairs. And the Russian Auction House has not found a single counterfeited security yet.
The printing and security technologies of the security papers in our days have advanced dramatically in comparison with the 18th and 19th centuries, as well as the beginning of the 20th century. But the experts still admire the skill of the artists who designed the securities.
We can use the classical example — the share certificate of the Moscow National Bank drawn by Ivan Bilibin. The artist did not consider it shameful to design shares, and there is the artist’s signature on this security, the same as on his paintings.
And the rest of the shares and bonds were designed in such a way that they represent not only historical, but also artistic value nowadays.
Every security was treated as a work of art. The sketch was approved by the important statesmen.
Today there are practically no paper securities in Russia. Though it still remains a secret, in contrast to the American stock market, why our large emitters do not issue papers for their own promotion?
At the stock market of the USA, all shares have certainly been only electronic for a long time. But in spite of that, one can always buy paper share certificates of Coca-Cola, General Motors, General Electric or Microsoft — any company existing in the market.
These practically souvenir share certificates, being original, are not the stock market tools and have the face-value of 1 cent. But it is a very good thing for the brand promotion, gift, interior design or a start of the child’s collection.
Why don’t we have, for example, paper share certificates of GAZPROM, RAO EES, Sberbank — our largest emitters forming the system at our stock market? As a shareholder of Sberbank, I would very much like to have its share certificate. I would probably place it on the wall or pass it to my grandchildren, and it would become a historical security.
In a few decades the financial history of Russia will be poorer than today, because there will not be such material evidences as securities left by the famous and tiny companies of the previous centuries.
And, besides, psychologically it would be more interesting for our people to have a paper certificate or a share in their hands, if they invest money.
Of course the certificate existence does not guarantee anything itself, but it is much more pleasant than the extract from the registrar which the shareholder has today to confirm his property rights. The extract represents an ordinary sheet of paper with printed data… And compare it with securities… What prevents giving a person who has brought his money a beautiful certificate stating that Ivan Ivanov owns 100 shares of Sberbank, together with the necessary extract from the registrar? And there are no special difficulties for that. No additional emissions are necessary, it is just enough to transfer a part of the electronic shares to paper. Moreover, it will pay off! Because people will buy such shares, as works of art as well. GAZPROM or LUKOIL could commission good artists to design the sketches of such shares. And the artists would gladly accept such unusual and grateful work. And with the present high level of printing, a real work of art could be created, both secure and splendid!
I don’t understand why our emitters do not value themselves so…
When the paper rarities come back to our economic reality, and this will certainly happen one day, the rare security market will become both wider and more interesting.
Russia of the 1990s — the last security papers
— Today we and our collectors live only with what once was. But there is less and less of that. The rarities get lost, fray, burn — that is a paper characteristic…
Numismatists and bonists always receive something new. And if today nobody is really interested in a commemorative coin, it will be demanded in a hundred years; in a thousand years it will be as greatly valued by collectors as the most ancient and expensive coins are valued today. New series of stamps are issued for philatelists. Life goes on!
It happens all over the world — German, French, English share certificates are continuously printed. But we have only the past… Our present was over with the security papers of “MMM”, “Hermes” and “Olbi-Diplomate”. We are grateful to those who were on the top of these financial pyramids for the last samples of the Russian security papers. These papers sometimes look funny because of their artistic or polygraphic execution, but this is our history. Yes, it is sad and shameful, but when one looks at these papers, he remembers the epoch in all detail.
We also have a privatization voucher with the signature of Anatoly Chubais. It is designed accordingly — with high-class artistic solution, printing security — all that should be on the modern security paper.
Today such securities are not expensive, because their time has not come yet. But these are the last papers left of the Russian stock market.
New specimens of historical security papers still appear in the Russian market. But it happens more and more seldom. The source is foreign collections and… “coffers”. The collectors sometimes find access to those taken out of Russia by the first emigrants, or stored in the garrets and basements for some time. As a result, we witnessed the following incident: a case with securities was put up at the German auction.
The owner had planned to throw it away thinking it had no value. It was very difficult for us to get this case at the auction.
Often the securities are lost because the people sort out the things and throw this “paper garbage” away, having no idea that it is valued and collected. It is great luck when we manage to intercept something on its way to the scrap-heap.
We once received a call from some people in Tashkent. They found about thirty antique Russian security papers there. They promised to bring them to us. It happened a long time ago, and we still have not seen these securities. But we are still waiting. And we will purchase everything. In case they bring them.
Numismatists do not know what real “poverty” is
— I don’t accept the numismatists’ complaints that there is less and less material, and no new literature is published. The numismatists have no idea what real informational and material poverty is! I think if they gather all their books and catalogues, there will be a lot of bookcases. All that’s published about the rare securities is here, on this one shelf. The rare security fanciers publish at their own expense small catalogues, which attract great interest.
We do our best to promote our security papers, and are very grateful to those authors who use them in their editions. A wonderful book by Lifland and Petrov “The century of shares, revenues and bond certificates” was published not long ago in two languages. The security papers possessed only by the State Historical Museum were published in it. And the edition itself was dedicated to the history of the security papers. The book was published thanks to URALSIB financial corporation.
Such editions as “The history of the Bank of Foreign Trade” and “The history of Sberbank” also contain illustrations — security papers. But these books are aimed to show the history of the bank, therefore not much attention is paid to securities there.
The book “The trade market of Russia before the revolution: outline of history” by Y. Golitsyn is a very good one. The book is generously illustrated with papers besides ours, and there are a lot of our securities in it.
The wonderful book “The capital protection” also contains replicas of the security papers. It tells about the capital as private and family property, saving the capital during the lifetime of a few generations of owners, and about the financial clans’ creation.
The rest of the literature of our only shelf is foreign catalogues of the securities auctions. Here is an American catalogue which itself is a work of the book-publishing art. It contains the description of security papers of many countries of the world. One day we will also have such great interest in Russia, which will allow holding regular auctions, publishing catalogues, and carrying out scientific research in the field of the historical securities. Security papers reflect the stock market development in the country. The better it is developed, the more active the interest to its history, and consequently to the historical securities, is.
Elena Kiseleva
