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5. Investing in South African rare coins
Today we live in a world of globalization, where more and more investors are turning to an increasing number of foreign investments to get higher returns. South African rare coins are exciting international collectors and investors with their very attractive annual returns and we are seeing a greater number of international investors enter and heat up the market place. What we have begun to witness is the beginning of a very long extended bull market where collectors and investors are going to make very significant returns on their capital in dollar terms. The South African rare coin market is hot, hot, hot!
South Africa has with the ‘Single 9’ the rarest coin in the world, it is the ‘King of world coins’
South African rare coins have a long history of giving some of the highest financial returns in South Africa. A 1902 Veldpond with a mintage of 986 pieces was worth £1 in 1902 and a year later, was worth £11. This shows an enormous increase of 1 000% in one year. To read more about the Veldpond click here. They are getting even more attention now, by giving some of the largest financial returns of any investment sector globally. Our country’s rarest coin, the 'Single 9' with a mintage of 1, has done the almost unimaginable and converted its value from R1 500 000 (US $326,087) in 1996, to US $3,000,000 (R18 000 000) today. This is a staggering percentage growth of 820%. It also makes this coin the most valuable private rarity in the country, far exceeding the value of all our country’s most expensive paintings. Today we live in an increasingly shrinking world of globalization. International investors and collectors are starting to have a significant impact on our market. There are two main benefits from this. Firstly, the overall value of our coins is increasing and secondly, our coins are starting to make waves overseas as a hot investment. This can only assist in expanding our market.
A 1902 Veldpond, with a mintage of 986 pieces was worth £1 in 1902. One year later in 1903, it was worth £11. This showed an enormous increase of 1 000% in one year. Today most of these coins average performances of well over 50% per annum, making them one of the highest performing rare coins in the world.
The ‘Single 9’ can be considered a ‘comet’ to the rest of the South African rare coin market. Where it goes, ultimately all other South Africa coins will follow closely on its tail. We are very fortunate to be the only country in the world with a coin that has an official mintage of one. Because we have the world’s rarest coin, the ‘king of world coins’, our coin market will attract more and more international attention. It could reach a value as high as US $50,000,000 in the future, which will cause even greater world media interest. To read more about the Single 9, click here. This means that its increasing value will have a powerful effect on other South African coins. A low mintage figure is the most powerful fuel for the growth of a coin. It is easy to imagine that the ‘Single 9’ has the rocket boosters of a space shuttle, driving its growth upward! A mintage of only 1 is regarded as the Holy Grail of rare coins around the world.
Our country’s rarest coin the ‘Single 9’ with a mintage of 1 has done the almost unimaginable and converted its value from R1 500 000 (US $326,087) in 1996 to US $3,000,000 (R18 000 000) today. This is a staggering percentage growth of 820% and also makes this coin the most valuable private rarity in the country, far exceeding the value of all our country’s most expensive paintings.
It was recently reported in a publication from New York, that most of the ZAR coins (coins dated 1874 - 1902) from South Africa had effectively doubled in value over the past year. It is an observation that has caused keen interest across the Atlantic in the United Kingdom. More and more independent observers are saying that South African rare coins are fast becoming some of the hottest performers in the world rare coin market. What international investors like about our coins, is the long-term opportunity that our market offers, as it has been dormant for so long.
As far a field as New York City, the activity created South African ZAR rare coins has been noticed.
International investors and dealers are having an increasing influence on our rare coin market.
In the past, there was virtually no international participation.
We are now becoming more exposed to international influence. South African’s are locating lucrative overseas and international investments, while international investors are focusing on South African investments. One of the greatest investments that South Africa has to offer local and overseas investors is South African rare coins. South African rare coins are fast becoming the Clifton properties of the international rare coin market. They are very sought after locally and internationally and give attractive return rates year after year.
The picture above is of Beach 2 Clifton, Cape Town South Africa. Properties in Clifton are some of the most
sought after in the world. Cape Town has been listed time and time again as one of the ten most
beautiful cities in the world. In a single word, Clifton’s beauty is ‘captivating’!
Although South Africans are often concerned about the high rate of crime, there are a lot of positive attractions that are taken for granted. Visitors to South Africa are usually astounded by the variety of wild life, such as elephant, lion, rhino and hippo. North Americans are particularly surprised at our biodiversity and astounding size of our wildlife, as compared to the mountain lion and grizzly bear. America may be the largest country in the world, but when it comes to the sheer size and numbers of our animals, we win hands down!
South Africa has some of the most exciting animals in the world. The Kruger National Park also boasts a large number of elephants with enormous tusks. Above is a picture of the African bull elephant Shingwedzi,
with a pair of some of the largest tusks ever recorded. Being in close proximity to these majestic
animals literally takes your breath away. A visit to the world famous Kruger National Park will
undoubtedly prove to be one of the greatest experiences of your life.
This is a picture of President Paul Kruger, one of South Africa’s most famous Presidents. He was most admired for the trait of having the courage of a lion. He was also a conservationist and founder of the Kruger National Park. His face appears on the rare South African coins, the Krugerponds and the bullion coins, Krugerrands.
A head shot of the ’king of the beasts’, a male lion in Kruger National Park. The lion was President Kruger’s favourite animal. He did everything in his power to be lion-like. Stories of his great courage are legendary,
such as the day he amputated his own thumb when his hunting gun exploded in his hands.
South African rare coins are rarer than most countries’ coins, due to their small mintage numbers.
In the global rare coin arena, one law supercedes all others. Collectors and investors realise that rare coins are only as rare and as valuable as their numbers are small. There is nothing that has a greater influence on the value of a coin than its numbers. It is due to this fact that South Africa has a great competitive global advantage. Many of our coins have extremely low mintage numbers compared to those of other countries. Our nation’s rarest coin, the ‘Single 9’, is currently valued at US $3,000,000. It has this astronomical value, as only one of these coins was ever minted. To our knowledge, it is the only coin in the world that was ever officially minted by a government with a mintage of 1.
Whilst there are several coins that can be found throughout the world that have only one surviving specimen, they did not at any time have an official government production figure of only one. That means that South Africa has the world’s rarest coin. South African rare coins are rarer than any others in the world when calculated on a relative ratio basis according to their mintage figures.
All countries have their share of rare coins, but most of the time their rarity is based on the fact that only a few coins have survived over the years from the original mintage. Not all of these coins had small mintage figures to start with. Many international collectors and investors participating in our rare coin market are stunned by the low mintage figures of these coins. This is a huge advantage for collectors and investors in our rare coin market, as the smaller the number of coins available, the faster their value grows and appreciates. South African coins have low mintage numbers and therefore have the potential to appreciate to significant dollar values in a relatively short space of time.
Our first coins were not struck for the entire country, but for the individual colonies that were later to become provinces of South Africa. This is why they are so rare today.
The reason for our first coins having such small mintage figures is due to our unique history. When the first coins of South Africa were struck, they were not struck for the country as a whole, but for the separate colonies of the time. Unlike the United States which was made up of 13 original states, South Africa consisted of individual and separate colonies. The first coins that were struck for South Africa were the Burgers pounds. They were struck in the Transvaal and had mintages of 695 for the ‘fine’ variety and only 142 for the ‘coarse’ variety. These coins were never actually used as currency, as there was fear that there would be reprisals from British bankers at the Cape Colony. The Volksraad (leader’s council) feared that the British would view the production of coins as a challenge to Britain. President Paul Kruger of the Transvaal went on to strike coins that, even at their time of mintage, were rare. He struck 15 650 double shaft ponds in 1892. The population of the Transvaal at that time was over 80 000 people. He also had the ‘Single 9’ struck with a mintage of only 1 and the 99 Overstamps struck with a mintage of only 130 pieces. Overseas numismatists (coin collectors) are usually astounded by their low mintage figures.
A map of Southern Africa showing the British Colonies and Boer Republics in 1892. The orange part of the map shows the area for which the first coins were minted.
A modern map of South Africa today, showing the incorporation of the original colonies.
President Kruger struck the first commercially used currency coins for South Africa, largely as an effort to introduce an indigenous currency, but not for the total currency needs of the Transvaal. President Kruger also struck these coins because he was up for re-election and felt that his image on the coin would affirm him to the voters. At the time these coins were minted, Britain was the predominant ruler and British currency facilitated most transactions in the colonies. This has made many of our original coins extremely rare.
Coins that were struck for the original colonies were already rare at the time. They became even rarer when all the colonies were combined as one country - South Africa. This factor is the foundation of the South Africa rare coin market. Most countries that minted their original coins did so for an already united country. This has given our rare coin market a competitive edge over other countries, due to our unique history. Now that all the original colonies have been combined into one country, you can begin to understand the ratio of relative rarity that applies to our coins.
South Africa had a very small base of coin collectors that led to our mint producing coins in very small numbers.
Our more modern coins that were produced during the time of the Union of South Africa (1923 – 1964) are also extremely rare. South Africa’s second-most rare coin, the 1928 proof ¼ penny, was produced during this time and has an official mintage of only 4 pieces. This makes it even rarer than the coveted 1913 Liberty Head Nickel in the United States. International collectors and investors are constantly contacting us, wanting to check the mintage figures of South African coins. Their reactions often show wonder and amazement at the low mintage numbers. These coins are also rare due to the very small base of coin collectors in South Africa at the time of minting.
mintage of only 4 specimens. It has an estimated value of US $450,000
Unlike the early industrialists of other countries, it seems as if South African industrialists had not heard the old saying “coin collecting is the hobby of kings”. They collected every other item under the sun, but not coins. Our Randlords (early industrialists that made their money from mining the Rand mining deposits) collected paintings, books, furniture and for some obscure reason, not coins. The leaders of the country set the trend for the rest to follow. Naturally this has led to our country having an underdeveloped rare coin market. There is a silver lining to the cloud, however. This previously underdeveloped market has inadvertently left modern South Africa with a treasure of rare coins that can still be acquired at very low values, relative to the rarity of the coins. The situation will not remain like this though. As time passes, our rare coins will begin to be priced at the same level as that of their international counterparts.
Due to the small number of coin collectors that our country has had from the time of the ZAR onward, mintage figures have remained extremely low by international standards. Very few proofs and collectable coins were taken from the mint and resulted in very few coins being minted. All of these factors combined have created a situation of opportunity for collectors and investors today. Collectors and investors that have South African rare coins with low mintage numbers and populations (remaining coins left over that have survived ) in their portfolios, will probably find that they have stumbled upon a veritable windfall. South African rare coins are presenting a once-in-a-lifetime opportunity, similar to the opportunity the first gold miners had in South Africa, with their early gold discoveries on the Rand.
Once we have a fully-formed rare coin market, many of the rare coins that can now be purchased for relatively low prices, compared to their international counterparts, will be unavailable, even at high values. This is because once a rare coin is identified in the market and begins to grow, it is generally found in long term portfolios and does not come back onto the market for a long time. Conceding that our rare coins are rarer than almost any other countries’ coins, they should also have future values that correspond with their rarity. The only part of the South African rare coin market that has been slightly tapped into at the moment, are the ZAR coins. There are also coins from the Union of South Africa and even some from the Republic of South Africa (1964 – date) that are extremely rare.
South African rare coins have all the required dynamics needed to make significant profits for collectors and investors in the years to come. At S A COIN, we are seeing the emergence and formation of the most powerful and strong South Africa rare coin markets in existence. The foundation of this market is based on the amount of low mintage coins that are still available at low prices, relative to their international counterparts.
South African rare coins have been undervalued due the 40 years of Apartheid, when our rare coin market was shunned by overseas investors.
Although many factors have contributed to our coins being so rare, another factor that should be taken into consideration is the effect of apartheid on our market. During the 40 years of apartheid, our rare coins were shunned by both local and international collectors and investors. This caused an unusually long period of time when our rare coin market went into stage of extended stagnation. This factor, to our knowledge, has not affected any other rare coin market in the world over such a long period of time. This market suppression is going to lead to volcanic investment returns for collectors and investors entering the market now.
An Apartheid sign on a beach in Durban 1989. The languages are English, Afrikaans, and Zulu. For over
40 years, Apartheid suppressed South African rare coins. This is the main reason why they
are showing explosive growth today.
Local collectors and investors had little faith in anything South African. One must bear in mind that it was at a time when many South Africans were shunned by the International community. Some South Africans would even lie about their nationality when travelling overseas. South Africans were attempting to buy British rare coins as they were anxious about South Africa’s future. International collectors and investors also wanted nothing to do with a “pariah” state’s coinage.
Great South African role models like Nelson Mandela and Charlize Theron are making an effort to help reconcile black and white South Africans with their difficult and traumatic past.
A low flyover of three South African Airways jets flying in formation at the Presidential inauguration of
Nelson Mandela on May 10th 1994 at the Union Buildings in Pretoria. Since that time South Africa
has seen a huge influx of tourism and overseas investors. People have begun investing in
everything from property to coins.
This has led to one of the most unusual rare coin market formations in existence. There is no other rare coin market that has had so many factors suppress its expansion and growth. The greatest advantage that our rare coin market can offer the collector and investor, is that it is heavily undervalued, providing huge potential for growth.
A new emerging powerful market of black collectors and investors.
The Apartheid system also excluded a large part of South Africa's population, namely black South Africans. This is one of the contributing factors to our rare coin market’s performance, as a large number of the population was previously excluded from the market. The South African motor industry has also exploded over the past few years, due to the emergence of black consumers. This has led to large numbers of cars using South African roads. All these consumers are also having a huge impact on South Africa’s industry and economical growth.
Traffic volumes in Johannesburg the largest city in South Africa, has quadrupled
due to new black consumers who are buying cars.
The city of Johannesburg downtown at dusk, framed by a beautiful African sky.
Indeed, there is no market in the entire country that has not felt the power of new black African professionals. The South African rare coin market has also felt its effect, with more and more black South Africans joining our client base each month. Although proving to be quite adept at learning and investing, black South African’s have a culture of being tied to things that they can see and touch. They are particularly fond of hard assets, such as Krugerrands. We are finding that this trend is also extending into the rare coins market. Most black consumers also know about the legendary 'Kruger Millions' (A vast treasure said to be hidden away by President Paul Kruger in 1899. It is said to be worth more than US $400,000,000 in today's money). They are therefore quick to understand the basic mechanisms of rarity and rare coins.
Patrice Motsepe & his wife Dr Precious Moloi are billionaires through new empowerment deals that have
benefited black South Africans. There is also a large developing black middle class, which is having a
huge impact on the South African rare coins market.
The rough median percentage of collectors and investors in rare coins in the United States, United Kingdom, Canada and Australia is between 10 – 15% of the total population. Taking this into consideration, South Africa had a population of 40.6 million after the last census. This will hopefully translate into exponential domestic growth in industry. The benefits over the next twenty to thirty years will be tremendous as more black collectors and investors enter our market. This will boost our local market and will have a dramatic influence on the value of our coins. This factor is of great financial benefit to collectors and investors entering the market early. They will see their coins’ values become equivalent to “telephone book numbers”.
If you would like to invest in, or get further information regarding South African rare coins, click and one of our senior brokers will contact you.