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3 October 2008








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The 1st European Conference COINS-2008 revealed: commemorative coins in Russia could and should be discussed, and the discussion

It happened for the first time. For the first time within the territory of Russia a conference dedicated to the commemorative coin market was organized and held. COINS-2008 turned out to be even more large-scale and respectable than the organizer the Watermark Publishing House had initially expected: 147 delegates of 24 countries arrived to Saint-Petersburg. There was a busy working program, active communication on the sidelines, and the major conclusion: the new discussion platform turned out to be in demand. And not a less important conclusion: there is interest in the Russian market in the world. And, finally, the prognosis: the Russian market will face changes, if for no other reason than the logics of its development demands changes.

Investment, collection, gift coins

An many countries the coin market exists under the law of the normal consumers market. Of course, the coin is not quite an ordinary product, it is more correct to say that the coin is a special product (after all, it is particularly but not exclusively the business card of the country), but with some toleration the laws of the normal market are certainly at work with the coin sales.

Fokko Knol, Managing Director of Modern Numismatics International (the Netherlands), emphasized three major market segments.

First of all, it is the market of investment coins (their main task is money investment and accrual thanks to the precious metal price increase). It is the most limpid and agile market. The investment coins should be easily available and have relatively low prices (in fact, the major part of the coin price is the cost of the precious metal used). The sales at this market are large-scale, and it is ruled substantially by the demand.

Secondly, it is the market of properly commemorative, collection coins. Such coins have high collection value and higher prices. These coins are not so easily available, and the market is not so limpid. Here the selective sales system on smaller scale is applied. And though the market is more and more ruled by the demand, the supply dictate is still in evidence here today.

Finally, the third segment is the market of gift coins. The collection value of these coins is low. Such coins need proper packing. They have relatively high prices, at the same time they should be easily available. In Fokko Knols opinion, such coins should be on sale in the gift shops. The market is ruled by the demand.

The market needs publicity

There are different points of view at the development perspectives of these market segments. Some specialists believe that more attention should be paid to the traditional commemorative coins, focused at collectors. Others emphasize the gift segment development (and original themes, effective designs using unusual finishing materials, amusing packing appear here first of all). Some concentrate on the investment coin direction, and the present situation at the precious metal market contributes to it. For example, the representatives of Tavex Gold (Finland) are sure that today every person should have 10‑25 per cent of gold in his case in the shape of coins or ingots, and propose to use special departments of hypermarkets for gold coin sales as well.

But in any case there are some rules based upon the existing experience, which help developing the coin market taking into account the fact that besides the properly commemorative function, commemorative coins are also an instrument for receiving profit.

First of all, there should be the advanced sales infrastructure at the market. Nowadays many mints have the right to sell commemorative coins independently, and they are actively engaged in it, also through their internet-shops. Special distributing companies also sell coins. Moreover, it is not necessary to go to a shop or an office there are mailings. Besides, as the specialists assure, coin sales using television have been developing more and amore actively lately.

Secondly, there should be a secure secondary market (for a person not only to buy a coin, but to know for sure where and how to sell it should the necessity arise; it is of high priority for the investment and commemorative coins of the collection direction first of all).

Thirdly, coins, like any other goods, need information and advertising support. On the one hand, such companies should inform of the issued (or to be issued) commemorative coins. On the other hand, it is possible to bring up the potential collectors (namely, the prospective buyers) with their help.

Who wants it?

The Russian coin market lives under other laws today. First of all, practically only one channel of coin sales The first European Conference COINS-2008 took place on June 25-26 in Saint-Petersburg (the Park Inn Pribaltiyskaya hotel). 147 delegates from 24 countries took part in it. Those were representatives of the national banks, mints, commercial banks, distributor companies, equipment manufacturers.

Among the COINS-2008 participants were: the Bank of Russia, VTB Bank, the Eurasian Development Bank, Sberbank of Russia, the National Bank of Ukraine, the National Bank of Belarus, the Central Bank of Armenia, the National Bank of Kirgizia, the National Bank of Kazakhstan, the Saint-Petersburg and the Moscow Mints Branches of Goznak, the Mint of Finland, the Mint of Kazakhstan, the Austrian Mint, the Mint of Poland, the Royal Spanish Mint, the Royal Dutch Mint, the Mint of New Zealand, Coin Invest Trust Company etc.

The Conference was organized by Watermark Company (the editor of The Watermark and The Gold Chervonets magazines).
The Eurasian Development Bank was the co-organizer of the Conference.

VTB Bank was the golden sponsor of the Conference.
The informational partners of the Conference were The Analytical Banking Magazine, The Banking Review, InterCrim-Press Publishing and Printing Complex and The National Banking Magazine.
An exhibition was held within the framework of the Conference, where the products of, in particular, the Saint-Petersburg and the Moscow Mints of Goznak (Russia), Coin Invest Trust (Lichtenstein), Travex Gold (Finland), PAMP (Switzerland), the Universal Mint (Hong Kong), Roesler (Germany), EMK (Germany) were presented.

The distribution of awards of the 2nd International Commemorative Coin Competition Coin Constellation-2008 became one of the events of COINS-2008.the commercial banks operates in Russia so far. Commemorative coins are struck under the order of the Bank of Russia at the Mints of Goznak in Saint-Petersburg and Moscow. The customer receives the edition, and later it is distributed by the financial establishments of Russia. Today they are over 100 commercial banks, but the major part of the issue is distributed by the offices of Sberbank of Russia.

The Russian Mints are not related to the commemorative coin sales. There are practically no specialized distributing companies focused at the Russian coins in Russia. There are no advertising campaigns either. Having obtained an interesting coin, one or another commercial bank may send a press-release describing the coin, may inform its clients, but there are no campaigns aimed at extensive audience. There are no campaigns on promoting commemorative coins as a whole as an investment instrument, a collectible object or an original gift.

Perhaps, the reason is that at the market today there are no structures for which the commemorative coin sales would be not just a business but the major one (for the commercial banks the commemorative coin sales are only one and, moreover, not nearly the most remarkable of the multiple areas of their business). For the Bank of Russia commemorative coin issue is not a commercial enterprise, but, as The Watermark already wrote with reference to representatives of the Central Bank, a means of popularization of the history of the country, its cultural values, scientific and technical achievements.

Investments or gifts?

Nevertheless, there are all the three segments at the Russian market today there are investment coins (these are both Russian coins, first of all, the gold 50‑ruble George the Victory Bringer, and foreign coins), there are coins bought by collectors (these are mostly commemorative coins) and there are coins playing the role of a gift. The last category includes, for example, foreign coins the themes of which refer to the history of Russia or the USSR (we described them in the latest edition of The Watermark). Coins with the Zodiac signs as well as those dedicated to The Moon Calendar, i. e. those with the images of animals symbols of the year, are conventionally used as gifts. Plus there are coins dedicated to St. Valentines Day in the shape of a heart, New Year coins with fur trees and snow flakes there are Belarusian coins dedicated to wedding, Easter, house-warming and so on. Besides, practically any Russian commemorative coins may be used as gifts or souvenirs.

On the whole, according to the evaluation of the experts of MDM Group (Germany) the market in Russia is growing very rapidly. Moreover, the experts of MDM believe that the majority of the Russian clients nowadays buy coins as investment, and therefore more attention should be paid to forming up of the concept for the medium term, which would be designed for the collectors. But the representatives of Sberbank of Russia and, as has already been noted, this is the major participant of the Russian commemorative coin market have mentioned more than once, that in their opinion the souvenir and gift demand now makes up 65 or 70 per cent of the market now. Nevertheless, according to their prognosis, the part of the numismatic demand will grow in the future.

At the same time, it is very difficult to draw a distinct boundary-line where the investment demand ends and the numismatic one starts, as well as between the numismatic and gift demand in Russia now. Somebody having bought a coin by chance or having received it as a gift may begin to enjoy it and start his own collection. Somebody may buy an investment coin as a souvenir and realize that it is quite a good way of money investing. In the future the market may become more structural, more predictable and, most importantly, more active.

Own way

There is nothing surprising in the fact that the Russian market is different from the Western markets. In fact, the available market of commemorative coins in Russia is a little more than 10 years old. The Russian citizens got the chance to purchase precious metals (we are not speaking about jewelry) only in 1997.

And if in many Western countries the coin markets were formed gradually (the process became active in the middle of the 1960s), in Russia everything is happening at a rapid pace. Therefore there are problems with the infrastructure, there is almost no civilized secondary market (perhaps, only Sberbank offers the buy-back opportunity). Therefore the legal basis does not always favour the Russian market development nowadays.

But to solve a problem, it is first of all necessary to formulate and define it. It is necessary to draw all the interested parties to the discussion. And the very fact of holding a conference on commemorative coins COINS-2008 in Russia has already contributed to solving this problem.

There will be changes

COINS-2008 Conference has demonstrated that the Russian commemorative coin market is ready for changes. Including the changes in the appearance of the Russian coins.

Traditionally the Bank of Russia as the customer of the Russian commemorative coins has kept to the classics. The Russian coin have always been round in shape, always of the traditional metals (these are now silver and gold, plus non-ferrous metals alloys), always quite austere in design and without decorative extravagances.

But the sketch of the first Russian commemorative coin with colored fragments was introduced at COINS-2008. It is a silver coin of the Outstanding Personalities of Russia series, dedicated to the 100th anniversary of birth of Nikolay Nosov, a juvenile writer.

According to the plan of the Bank of Russia, it should be put into circulation in the second half of 2008. It is a new stage in the history of the Russian commemorative coins without exaggeration.

At the same time, the world of commemorative coins is extremely variegated today. Both very small, with the weight of only 0.5 g, and very big ones, weighing a few kilograms, are minted in the world.
The coins are not always round there are triangular, rectangular, square, polygonal and figured ones (for example, the already mentioned coin in the shape of a heart).

And there are puzzle coins. Coins with holograms, colored coins, coins with precious gems, with non-traditional metals application niobium, tantalum, titanium have become a common occurrence. All this helps drawing the attention of those who have never been interested in the market, to the coins. As a result, both those devoted to the classics and adherents to all possible novelties are able to find their coins.

And this is what the modern coin market is remarkable for.






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