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No time to scrap the scrips

Alternative investments: as share trading goes paperless, there is fresh value in old certificates
THE TALK is of share certificates being replaced by computer entries. But, ironically, old share certificates in long-gone companies are proving to have value of their own, for aesthetic reasons.

The certificates are sometimes beautiful: bought for framing, brightly coloured and decorative, and may even portray the company. Many are redolent of times when commerce might seem to have been more romantic - shares in businesses in frontier America or pampas Argentina, or issued by the big names of the industrial revolution, such as the Great Western Railway. There are bond certificates from imperial China or Tsarist Russia.

"In the early days, share certificates were a good way of depicting what a company did, perhaps to show a smoking factory that probably did not even exist," says Keith Hollender, a dealer who runs the Scripophily Shop - scripophily being the term for collecting share and bond certificates.

At the moment the market in certificates is picking up, with the lift in prices being assisted by market reforms in the former communist countries and China, where many old loan certificates have been redeemed. This has taken many bonds off the market, and the prices of those remaining have been helped by their increased scarcity, although there is little prospect of a payback value for those remaining.

The value of the most sought-after certificates has risen steadily in the past few years. American Express share certificates from the 1850s, signed by famous names Wells and Fargo, which 10 years ago were selling for pounds 200, can now fetch pounds 1,000.

Collectors tend to specialise in a single area, either industrial or geographic. Railways are the most popular, and certificates of mines and banks are keenly collected, but special interests can be esoteric. One Israeli collector only buys shares of companies involved in mushroom production.

"I am a dealer and collector," says Leslie Tripp of Scripophily International Promotions, who advises Phillips, the leading auction house in Britain for share certificates.

"My family is connected with Cornwall and with tin mines, so my collecting is of Cornish tin mines, because I know about them and because I think our heritage will be lost if they are destroyed."

Values of certificates tend to be determined more by their looks than by their rarity, because there are comparatively few collectors. Although, for example, there are Cornish tin mine share issues where only five certificates survive, prices remain low because hardly anyone collects them. This suggests that if scripophily does become more popular, some prices could rise significantly.

"Most British shares don't have pretty pictures, which are more common on overseas ones, such as American or Canadian," says Mr Tripp. "If they have a vignette, then more people collect them. A company may have only issued 50 or 60 shares, but if no one has heard of it, and there is no interest in the subject, you can pick up a share (certificate) for next to nothing."

Only a few share and bond certificates issued since the 1920s have much value as collectables. One unusual exception is Playboy shares, which used to portray a Bunnygirl.

Shares of companies involved in fraud, with the fraudster's signature on the certificate, are also much sought-after.

Demand for certificates is strongest in Germany and the US, with regular auctions taking place in several European cities. There are an estimated 40,000 collectors in Germany. Many collectors work in the financial markets.

In Britain, Phillips holds a scripophily auction every three months, with mini-auctions taking place at the International Bond and Share Society's monthly meetings in London. The society also organises postal auctions. Dealers such as Mr Hollender and Mr Tripp sell by mail order or to callers at their premises.

q The Scripophily Shop, telephone 0171-495 0580; Scripophily International Promotions, 0171-437 4588; Phillips Auctioneers, 0171-629 6602; the International Bond and Share Society, 0181-450 9824.