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Platinum Developments #3

London, 29 June 2018

Paul Wilson, Chief Executive

I hope these short posts about the global platinum investment market will be an engaging update for the investor community and a welcome complement to the ongoing stream of data-driven research that we have built up over the past three years.

As we hit the halfway point of the year, it’s pleasing to look back at a successful opening six-month period for the World Platinum Investment Council’s global team.

We continued to forge new relationships around the world through our increasing product partnerships, while we welcomed a record number of attendees to our Platinum Quarterly presentation in May, during the busy Platinum week here in London.

Our efforts in China, led by Weibin Deng and his colleague Hayley Lee, continue apace, as we establish platinum’s credentials with key investment stakeholders in the country. Meanwhile, our investor development team continues to increase engagement with investors and potential new investors in platinum, most recently in Geneva, Zurich, Toronto, Boston and New York. The historically low price of platinum and greater potential for demand growth has increased investor demand for actionable insights.

The conversations I had during Platinum Week in May and the ones I have continued to have with platinum stakeholders around the world since, underlined to me that this is clearly a tough time for the market. But, as I have said before, during such tough times it is critical to stick with one’s principles and, in our case, spread fundamental data and deep insights that will support platinum for the longer-term.

As part of this process, I was, earlier this week, pleased to be able to announce the careful expansion of our investor development team headquartered in London, with a new team leader.

Sally Singer joins us as Director, Investor Development, working with Brendan Clifford, bringing further insight and experience to our already successful efforts in this critical area.

While based in London, Sally’s role, as with the rest of the team, is very much a global one.

Sally has worked in investment banking for more than 20 years, with the last 6 years in commodities, mining and precious metals at UBS. She will spearhead our efforts to engage with institutional investors, wealth managers, family offices and other market participants where we believe there is an opportunity to make the case for platinum investment.

I was also delighted to announce the promotion of David Crawford to Director, Product Partnerships, further strengthening the WPIC leadership team. David has been with us for over 3 years, building several of our existing relationships mainly in Europe, North America and Africa.

Andrew Tan, David’s colleague in Product Partnerships, is currently putting the finishing touches to the partnership we announced with UK Athletics earlier this year, ahead of the inaugural Athletics World Cup, which takes place in London on the evenings of July 14th and 15th at the London Stadium (the venue for the 2012 Olympic Games opening and closing ceremonies and track and field events) and broadcast internationally through Sky and others.

WPIC is providing The Platinum Trophy and winners medals for the inaugural event. The Platinum Trophy, which will be presented to the winning country’s captain by IAAF President Lord Coe, is believed to be the most valuable global sporting trophy ever made. When its design is revealed in the next week or so, I hope many will share my view that it is also one of the most elegant.

This partnership is an important milestone for the WPIC, helping us convey the message of platinum’s long-standing precious metal rarity and intrinsic value because of its very many applications that benefit humankind, to new retail investor audiences around the world.

The partnership fires a starting gun on our wider push to highlight platinum’s rarity and value. This will include the launch of a new regular weekly publication, specifically tailored for the needs of a retail audience. This is something several of our product partners are also keen to share with their own clients and prospects.

Paul Wilson
CEO, World Platinum Investment Council

Platinum Developments #2 – London, 10 May 2018

In the second edition of the Platinum Developments series, I want to focus on two of the most important centres for platinum demand: Japan and China. While these markets have very different contexts and histories in terms of their interest in platinum, their value to the global platinum market continues to grow.

Continued momentum in Japan’s investment market

Japan is the most mature platinum investment market in the world and Japanese investors have been aware of platinum’s unique and precious nature for decades. As a result, the Japanese platinum investment landscape is arguably the most diversified and structured of any, featuring a wide range of products and investment opportunities tailored for different demographics, including bars, coins, ETFs and a range of platinum accumulation plans (physical and virtual).

The strong tradition for platinum investment in Japan stretches back to the post-war era and continues to grow today. With this in mind, Japanese investors can be quite price-focused. In December of last year, when the platinum price dropped below the ¥3,400/g threshold, we saw a rally in purchases of platinum bars. This trend has continued into 2018, with two of the last four months experiencing high levels of bar and coin buying corresponding to price dips at the beginning of the year.

At the WPIC, we have watched the Japanese market go from strength-to-strength since our foundation in 2014 and, to me, the market shows no signs of slowing down. Our job now is to continue supporting Japan’s established platinum investment infrastructure, whilst identifying new opportunities to create or broaden access for Japan’s well-informed investor base. This is what we’re working on with our market development partners in Japan this year.

The world’s biggest platinum consumer

Looking elsewhere in the region, China’s platinum investment infrastructure is different and less developed. China has long been the world’s biggest consumer of platinum, and we see huge opportunity and appetite to open up platinum investment opportunities there.

As we outlined in our latest Platinum Quarterly report, China is now seeing a recovery in general market conditions, as GDP growth accelerated in 2017 for the first time since 2010 and spending in third-tier cities increased. This is filtering through to the platinum market where, supported by a better structured manufacturing system, we are seeing increased platinum jewellery demand. Last month’s report also highlighted that Chinese jewellers have been successfully targeting second tier cities and expanding their presence there, leading to higher platinum sales in 2017 – a trend that we expect to continue this year.

There are also encouraging signs that this market is keen to explore investment opportunities. In February, I visited Shanghai to take part in a seminar convened by the WPIC, New York University’s Shanghai campus and SOCDA - the market development arm of the Shanghai Clearing House. It was a great event that highlighted wider opportunities for structural change and increased access for investors to platinum in China. I’m convinced more than ever of the significant future potential of China as a key platinum market.

This view was reinforced by what I saw during my trip in terms of how the Chinese government is tackling the country’s pollution issues. They are showing themselves to be expansive thinkers when it comes to improving air quality and ‘cleaning up’ the largest car fleet in the world. The country’s New Energy Vehicle incentives favour fuel cell vehicles over battery electric equivalents and heavy duty fuel cell vehicles are gaining more and more traction. This bodes well for platinum, as the catalyst in auto fuel cells. The incentivisation of fuel cell vehicles that we’re seeing in China could, if it takes off, be transformative.

An agile market with enormous potential

China is an agile market with a distinctly entrepreneurial spirit. We have already found a wealth of people willing to explore platinum investment opportunities that will support improved access, distribution and innovative applications for the metal.

The Chinese government’s endorsement of fuel cell vehicles in the world’s largest auto market is a very exciting development. If China follows Japan’s trailblazing example of a platinum investment infrastructure, this will be a development of which the world should take note.

Please do have a look at previous Platinum Developments if you would like to find out more about this new ‘post’ series. I look forward to hearing your thoughts on this latest piece.

Paul Wilson
CEO, World Platinum Investment Council

Platinum Developments #1 – London, 29 March 2018

The platinum market, as we all know, is truly global. My intention here is not to restate our positive views on the strength of platinum’s supply demand fundamentals, but instead to share with you my personal reflections on the investor interactions, partner initiatives and new developments we see in the course of our work.

I have talked previously about how investor interest is growing, with improved understanding of both the case for platinum and how to access it.

A bright spot in the market, that I want to highlight in particular, is the significant expansion in investment options for Western investors over the last year.

A few examples of recent progress on this front are:

  • New ETFs: Globally, ETF holdings have stabilised and, in some geographies, are growing again, in spite of poor price performance. In the US, the WPIC recently supported the development and launch of a new low-cost platinum ETF issued by GraniteShares. It is early days, but the signs are promising. In the first quarter, assets under management have grown by 50% and currently total over 4,500 oz (more than $4.2 million). The US retail investment market clearly has scale in assets, but historically there have been significant gaps both in terms of regular provision of knowledge about platinum and in the range of investment options.
  • BullionVault: We have seen incredible growth in the number of investors accessing platinum via BullionVault’s multilingual bullion trading platform since the company added the metal in March last year. Demand has come from across the spectrum of existing gold and silver investors on the BullionVault platform as well as entirely new investors. In 2017, we saw $15.8m of platinum investment demand via this platform, led by investors in the UK, Germany, and the US. This resulted in over 16,000 oz in platinum holdings. Our market intelligence suggests that this could be just the start.
  • Royal Mint: The Royal Mint launched its first platinum bullion products last year; the Signature™ platinum range, and the Queen’s Beast platinum coins. Since then, the 1,000-year-old institution has continued to expand its range of platinum investment products, adding a new 1-ounce platinum coin in February to its existing Royal Britannia series.

All of these WPIC activities with our valued partner organisations support the WPIC’s goal to develop products and channels that make investing in physical platinum much easier – whether through bars, coins, accumulation plans, bullion coin custodial certificates or ETFs.

We have seen positive progress in platinum investment in the West over the last year. We now plan to turn more attention to the East, where we see considerable latent, pent-up demand for platinum. Last month I spoke at a seminar on platinum investment in Shanghai, which we co-hosted with Shanghai Clearing House, New York University and the Shanghai Gold Exchange. The excitement around potential platinum opportunities in China was palpable.

We opened our WPIC office in Shanghai last summer and will be focusing even more of our attention in 2018 on China, particularly on increasing the number of investors considering platinum and improving the number and appeal of platinum investment products available. I look forward to discussing the specifics of some of these opportunities in future Platinum Developments posts.

In the meantime, I welcome your feedback on this new ‘post’ series, and encourage you to get in touch if there are any future topics you would like to see presented or discussed here.

Paul Wilson
CEO, World Platinum Investment Council

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