JRHA Sale Feature

JRHA SALE FEATURE

JULY 14, 2010

Neo Universe colt tops JRHA Foal Sale

by Michele MacDonald

No matter how challenging it might be or how unfathomable to people in other

markets, Japanese owners still have a yen for buying foals as their primary

racing prospects. They demonstrated their zeal on Tuesday when spirited bidding

duels reminiscent of headier financial times broke out in the Northern Horse

Park sale pavilion during the foal session of the Japan Racing Horse Association

select sale.

When the hammer fell for the final time, three foals still at their dams'

sides each had sold for the equivalent of more than $1 million. Overall, six

foals surpassed the top price paid for a yearling on Monday, the 66-million yen

(about $733,333) bid for a colt by Deep Impact.

More aggressive spending had been predicted by JRHA Vice Chairman and Shadai

Farm owner Teruya Yoshida, who said the quality of the foal section of the

catalog was superior. Still, with sellers bracing for a continuation of a

problematic market, the results were better than anticipated for some, giving a

boost to Japan's elite auction that has declined annually ever since 2006 as

global and national economies suffered.

Of the 208 foals offered, 141 were reported sold for a clearance rate of 67.8

percent, up from the 64.7-percent rate in 2009 during two foal sessions that

featured 207 sold from 320 offered. The gross reached 3.339-billion yen

($37,100,000) as compared to 4,913,200,000 during two foal sessions in 2009. The

average price of 23,680,000 yen ($263,121) declined by less than 1 percent,

despite ongoing economic woes, providing a reason for some celebrations.

"This is much better than we anticipated, no doubt -- the prices were very

good," Yoshida said. "The main reason (that expectations were exceeded) is that

people love horses and they have money, a little bit of money, to spend."

The atmosphere in the pavilion, which had been politely quiet other than the

rhythmical droning and gavel rapping by the auctioneers, crackled about a

quarter through the 214 foal catalog pages when a Neo Universe colt (Hip 355)

with a white face and three white legs scampered into the ring. The second bid

boosted the price up to the equivalent of $500,000, making it clear that advance

billing from consignor Northern Farm that the colt out of the unraced mare

Acoustics (Cape Cross [Ire]) could be the star of the sale was not just hype.

While the colt, a full brother to 2009 champion Japanese three-year-old male

and Tokyo Yushun (Japanese Derby) (Jpn-G1) winner Logi Universe, stood calmly,

prominent owners Riichi Kondo and Takaya Shimakawa fired bids from opposite

sides of the pavilion.

Kondo took his time, but Shimakawa -- a jovial health foods entrepreneur who

had demonstrated a playful mood by bidding more than $500,000 on another colt

moments earlier while casually walking into an office at the rear of the

pavilion -- retorted immediately during their duel. Relaxed but determined,

Shimakawa prevailed, going to 112-million yen ($1,244,444), which, while

markedly higher than the top yearling price, was significantly lower than last

year's most expensive foal. A big half-brother to Triple Crown winner Deep

Impact by Daiwa Major elicited a 165-million yen ($1,736,842) bid from Shimakawa

in 2009.

"This is not the foal I loved the most, but when I went to Northern Farm,

(owner) Katsumi (Yoshida) recommended this one very highly," Shimakawa said of

the Neo Universe colt. "I respect Katsumi and I was happy to take his advice. I

was ready to pay more for the colt, so I am happy."

The Neo Universe colt was just one of many highlights of the sale for Katsumi

Yoshida, whose Northern Farm reigned as leading consignor for the 12th time in

the 13-year history of the JRHA sale. Five of the eight highest selling foals

were dispatched by Northern Farm.

"I am very happy," a beaming Yoshida said as he hosted a celebratory dinner

party while noting that only four horses of the 130 he entered in the sale were

not sold. "The prices were very good."

His son, Shunsuke Yoshida, who manages Northern's Kuko branch, said the sale

of the Neo Universe colt was significant for several reasons, including the

excitement factor of the more than 100-million yen winning bid, which he hoped

would fire market momentum.

Some of the sale's 350 registered buyers more than did their part to maintain

the momentum. Just 15 hips after buying the Neo Universe colt, Shimakawa jumped

back into action, revealing which foal he had really fallen in love with by

turning back Kondo again in bidding 92-million yen ($1,022,222) for a Deep

Impact colt out of Argentine Group 1-placed winner Data (Hip 370).

"This was the one I liked the most and wanted to buy," Shimakawa said while

more than 25 members of the Japanese news media clustered around him.

The Deep Impact colt is the second foal of Data, who is a half-sister to

Group 2 winner Danish and to Chilean Group 1-placed Diamond, and will eventually

join the Shimakawa racing empire that currently spans about 150 horses in

training.

But Shimakawa wasn't the only buyer at the top end of the foal market.

Shortly after the Deep Impact colt was led out of the ring, agent Nobutaka Tada

of Globe Equine Management Co. Ltd. lassoed a Zenno Rob Roy colt (Hip 377) out

of Festa Delle Donna (Hector Protector), for 105-million yen ($1,166,666), the

second highest price of the day. The colt is from the family of Japanese Group 2

winner Tosen Jo O (Timber Country).

"The trainer likes Zenno Rob Roy -- he trained him," Tada said, referring to

leading conditioner Kazuo Fujisawa, whose major clients include Hidetoshi

Yamamoto, chairman of Tokyo-based Fields Corp., a distributor of pachinko

gambling machines. "Unfortunately, we didn't win the Tokyo Yushun (Japanese

Derby) this year with Pelusa (Zenno Rob Roy), but he's a really good colt and we

bought him at the JRHA sale, so we're hoping we got another good Zenno Rob Roy

today."

The colt was consigned by Teruya Yoshida's Shadai Farm, and Yoshida had said

he was the best individual in the Shadai foal consignment this year.

While the Yoshida family did very well in both selling the vast majority of

their horses and at the highest prices, other breeders and consignors were not

so fortunate. An unofficial analysis of the sale results by an independent

consignor showed that 61 percent of the horses offered by those not affiliated

with the Shadai Group were led out of the ring unsold.

"It means a lot of us will have big yearling consignments next year," said

Irish native Harry Sweeney, who operates Paca Paca Farm, which offered 10 foals

on Tuesday.

Only one of those foals was reported as sold.

"It's tough," he reflected. "We're suffering from a double whammy -- this

market is transitioning from a foal market to a yearling market (requiring more

investment and a longer wait on possible returns) and it's happening during a

recession."

Despite the much discussed development of a yearling market in Japan, buyers

still seem eager for foals.

"No one has asked me to wait to sell them until they are yearlings," said a

smiling Teruya Yoshida, who replied light-heartedly when asked why buyers still

are willing to play in the riskier side of the market with unweaned youngsters:

"Foals are prettier--it's simple. It's the same as humans. One at three to four

years old is nicer than one who is 14 and who can say very bad things."

Yoshida also said that Shadai Group horses sell strongly even when other

consignors are struggling because the family farms have a long record of proven

performance with their horses.

"If other breeders have a good horse, it's no problem, but you have to have

established credibility," Yoshida said. "Not many breeders are strong enough to

do that.

"We work hard," he stressed. "We choose which horses to sell in this market

and we do not just try to sell horses based on our name."

Overall, the reformatted JRHA sale -- which was shortened from two days of

foals and one day of yearlings in 2009 to one day each for yearlings and foals

this year -- yielded a gross of 6,496,100,000 yen ($72,178,889), while 314

horses were sold from 422 offered.  While true comparisons are not possible

due to the differing format, the number of horses sold this year was just 15

fewer than in 2009. Average price of all horses sold was 20,690,000 yen

($229,869) or 10.6 percent lower than the average for all horses sold in 2009.