Yayoi Kusama Tops 2023 List of 21st-Century Artists

Artworks by Yayoi Kusama collectively sold for nearly US$81 million last year at the major global auction houses, making her the top-selling 21st-century contemporary artist, according to the Hiscox Artist Top 100 report.

The boost in sales for Kusama’s works pushed David Hockney, the previous year’s top-selling artist, to second place. Hockney’s art garnered US$50.3 million in sales last year, down from US$74.7 million in 2022, said Hiscox, a London-based specialty insurer.

The second annual ranking, compiled with research and analysis from London-based ArtTactic, also showed Kusama’s No. 1 ranking was consistent with a strong showing by women artists overall last year. Joining Kusama among the top five last year was Cecily Brown, who ranked fourth with US$31.7 million in sales.

Yoshitomo Nara, ranked third with sales of US$36 million and George Condo ranked fifth with sales of US$29.5 million.

Total sales of contemporary art made after the year 2000 fell 17% to US$955 million last year from US$1.5 billion in 2022, according to the report. Though sales of contemporary art by women fell 8% to US$306 million, the number of works sold rose 21%. And sales by their male peers fell a much sharper 20%, the report said.

“The market for female artists has been much more resilient than that for male artists,” the report said.

The results go beyond ultra-contemporary art. Earlier this year, ArtTactic reported that overall sales of art by women at the major auction houses hit a record US$825.8 million last year, up 7% from a year earlier.

Another mark of progress: Art by women comprised 32% of 21st-century art auction sales last year, up from 29% in 2022, as the number of women artists behind these sales continued to climb. There were 728 women artists represented last year, up 179% from 2019, the report said.

“Contemporary female artists have always been undervalued and underrepresented,” Robert Read , head of art and private clients at Hiscox said in a news release. “Meaningful progress has been made in recent years, as the market gradually begins to recognise the importance and value of their work, but we are still some way from parity.”

Following Kusama and Brown, the top female artists by sales value were Julie Mehretu, with sales of US$21.4 million; Jadé Fadojutimi, with sales of US$8.5 million; and Jenny Saville, with sales of US$7.8 million.

The Hiscox report just examined the auction market for works created in the 21st century and sold at Christie’s, Phillips, and Sotheby’s. This segment was stronger than much of the art market last year, with sales still 26% above pre-pandemic levels. Sales of art made before 2000 have fallen 22% since 2019, the report said.

This segment of the market is also making up a larger share of all post-war and contemporary art sold at auctions, reaching 70% last year from 63% a year earlier.

The Hiscox report was consistent with other analyses of the art market last year that found large-ticket sales, over US$1 million, declined in favour of sales of works with price tags of US$50,000 or less.

Within the 21st-century art category, the number of lower-priced works sold gained 25% while the number sold above US$1 million fell by 12%. The trend is backed by a near doubling in the number of artists making 21st-century works that end up at auction since 2019, the report said.

The benefits of so-called flipping—or the practice of selling art made by young artists within two years of their creation—fell dramatically, bringing in US$39 million in sales last year from US$67 million in 2022. That’s despite the number of lots with this newly made art at 662 was about the same as the previous year.

Though Kusama is 95 years old, 41% of those making 21st-century art are under age 45, unsurprisingly. Leading this group of younger artists last year was: Nicolas Party, whose works sold for US$20.2 million; the late Matthew Wong, whose works sold for US$16.5 million; Fadojutimi; Caroline Walker, whose works sold for US$7.5 million; and Dmitri Cherniak, whose works sold for US$6.7 million.

U.S. investors’ enthusiasm over Japanese stocks at this time last year turned out to be misplaced, but the market is again on the list of potential ways to diversify. Corporate shake-ups, hints of inflation after years of declining prices, and a trade battle could work in its favor.

Japanese stocks started 2024 off strong, but an unexpected interest-rate increase in August by the Bank of Japan triggered a sharp decline that the market has spent the rest of the year clawing back. Weakness in the yen has cut into returns in dollar terms. The iShares MSCI Japan ETF , which isn’t hedged, barely returned 7% last year, compared with 30% for the WisdomTree Japan Hedged Equity Fund .

The market is relatively cheap, trading at 15 times forward earnings, about where it was a decade ago, and events on the horizon could give it a boost. Masakazu Takeda, who runs the Hennessy Japan fund, expects earnings growth of mid-single digits—2% after inflation and an additional 2% to 3% as companies return more to shareholders through dividends and buybacks.

“We can easily get 10% plus returns if there’s no exogenous risks,” Takeda told Barron’s in December.

The first couple months of the year could be volatile as investors assess potential spoilers, such as whether the new Trump administration limits its tariff battle to China or goes wider, which would hurt Japan’s export-dependent market. The size of the wage increases labor unions secure in spring negotiations is another risk.

But beyond the headlines, fund managers and strategists see potential positive factors. First, 2024 will likely turn out to have been a record year for corporate earnings because some companies have benefited from rising prices and increasing demand, as well as better capital allocation.

In a note to clients, BofA strategist Masashi Akutsu said the market may again focus on a shift in corporate behavior that has begun to take place in recent years. For years, corporate culture has been resistant to change but recent developments—a battle over Seven & i Holdings that pits the founding family and investors against a bid from Canada’s Alimentation Couche-Tard , and Honda and Nissan ’s merger are examples—have been a wake-up call for Japanese companies to pursue overhauls. He expects a pickup in share buybacks as companies begin to think about shareholder returns more.

A record number of companies have also delisted, often through management buyouts, in another indication that corporate behavior is changing in favor of shareholders.

“Japan is attracting a lot of activist interest in a lot of different guises, says Donald Farquharson, head of the Japanese equities team for Baillie Gifford. “While shareholder proposals are usually unsuccessful, they do start in motion a process behind the scenes about the capital structure.”

For years, money-losing businesses were left alone in large corporations, but the recent spate of activism and focus on shareholder returns has pushed companies to jettison such divisions or take measures to improve them.

That isn‘t to say it is going to be an easy year. A more protectionist world could be problematic for sentiment.

But Japan’s approach could become a model for others in this new world. “Japan has spent the last 30 to 40 years investing in business overseas, with the automotive industry, for example, manufacturing a lot of the cars in the geographies it sells in,” Farquharson said. “That’s true of a lot of what Japan is selling overseas.”

Trade volatility that hits Japanese stocks broadly could offer opportunities. Concerns about tariffs could drag down companies such as Tokio Marine Holdings, which gets half its earnings by selling insurance in the U.S., but wouldn’t be affected by duties. Similarly, Shin-Etsu Chemicals , a silicon wafer behemoth that sells critical materials, including to the chip industry, is another potential winner, Takeda says.

If other companies follow the lead of Japanese exporters and set up shop in the markets they sell in, Japanese automation makers like Nidec and Keyence might benefit as a way to control costs in countries where wages are higher, Farquharson says.

And as Japanese workers get real wage growth and settle into living in an economy no longer in a deflationary rut, companies focused on domestic consumers such as Rakuten Group should benefit. The internet company offers retail and travel, both of which should benefit, but also is home to an online banking and investment platform.

Rakuten’s enterprise value—its market capitalization plus debt—is still less than its annual sales, in part because the company had been investing heavily in its mobile network. But that division is about to hit break even, Farquharson says.

A stock that stands to benefit from consumer spending and the waves or tourists the weak yen is attracting is Orix , a conglomerate whose businesses include an international airport serving Osaka. The company’s aircraft-leasing business also benefits from the production snags and supply-chain disruptions at Airbus and Boeing , Takeda says.

An added benefit: Its financial businesses stand to get a boost as the Bank of Japan slowly normalizes interest rates. The stock trades at about nine times earnings and about par for book value, while paying a 4% dividend yield.

Corrections & Amplifications: The past year is expected to turn out to have been a record one for corporate earnings in Japan. An earlier version of this article incorrectly gave the time frame as the 12 months through March. Separately, Masashi Akutsu is a strategist at BofA. An earlier version incorrectly identified his employer as UBS.