Hong Kong  - Christie's was preparing Friday to host its first wine auction in Hong Kong in seven years with a collection of blue-chip wines aimed at tempting the most cautious collectors to spend in the current economic downturn.

The collection includes 127 lots of rare and vintage wines from the reserve cellars of Chateau Latour, which are expected to fetch around 1.2 million US dollars when they go under the hammer Saturday evening.

It would be the first of two fine and rare wine auctions in the former British colony this week - a second being held by Bonhams Tuesday.

Christie's move back to Hong Kong followed several recent successful wine auctions in the city and the removal of all tax on wine by the government in February, which has boosted Hong Kong's reputation as a wine hub.

However, it comes as wine prices around the world are slumping in response to the economic crisis.

According to the Liv-ex, the leading wine exchange, fine wine prices dropped more 12 per cent in October.

Bordeaux, considered one of the most stable of investments, is now 25 per cent down from its peak price in August.

At the end of October, the Liv-ex index was down 7.6 per cent from the same time last year.

The slump was reflected in a sale organized by the US wine merchant Acker Merrall and Condit in Hong Kong earlier this month that brought in 6.7 million US dollars.

Although 90 per cent of its lots were sold, the total sales amount was 18 per cent lower than the 8.2 million US dollars fetched at a similar auction staged by the same company in May - before the economic downturn really began to bite.

Anthony Hanson, senior consultant with Christie's Wine Department, said the auction house was still confident the quality and provenance of the wine being sold Saturday would attract buyers.

"It's challenging, but we thrive when we have to move quickly on our feet, and we have assembled this sale very carefully," Hanson said.

"What is wonderful about this consignment is that half is coming directly from Chateau Latour," he said. "The provenance is immaculate and, the condition it has been stored can't be feted. It's attracting an enormous amount of interest."

Hanson said the current state of the market had been taken into account when the reserve prices were set and he was still "prudently optimistic" the sale would be a success because recent sales had shown good wines to be still in demand.

"I do think wine is a good buy. Some of the prices 18, 12 and six months ago were very high indeed, and there is no doubt there are going to be bargains," he said.

Hanson said Christie's halted wine auctions in Hong Kong in 2001 partly because of the difficulty in acquiring sufficient bottles of top quality wine and partly because Asian collectors where buying at auctions elsewhere in the world.

The Bonhams auction would be the auction house's third this year and was expected to raise just under 1 million US dollars.

Bonhams' Daniel Lam said the 308 lots had been carefully chosen and priced by taking into account the recent decline in prices.

Wine collectors in Hong Kong are believed to own around 1 million cases of rare and fine wines worldwide or 15 to 20 per cent of the world's total of fine wines. (dpa)