SHARE PRICES AND MARKET ANALYSIS

A snapshot of motorcycle and ATV industry share performance across key manufacturers and major global markets at the trading week closure on Friday 11 August 2023. BDN financial editor Roger Willis reports.

USA — DEPRESSING DATA DUMP

American investor confidence wavered back and forth, on differing interpretations of latest US consumer and producer price inflation figures, and particularly the latter’s potential for keeping interest rates higher for longer. CPI inflation had risen from 3% in June to 3.2% in July, halting a welcome string of reductions. But most worrying was an annualised increase for factory-gate wholesale goods to 0.8% in July, from just 0.2% a month earlier.

Swerving from session to session, Wall Street market indices eventually settled down to mostly minor weekly declines. The Dow Jones Industrial Average was sole exception, clinging onto a 0.6% gain. S&P’s MidCap 400 and its blue-chip S&P 500 respectively finished 0.8% and 0.3% down. The tech-heavy NASDAQ Composite fell more firmly by 1.9%.

Powersports-related stocks were almost all on the back foot. Lack of interest in Harley-Davidson shares worsened from a 3% retreat in the previous week to a veritable dive to 8.7% in arrears this time around. In contrast, the only positive note was delivered by Harley’s LiveWire electric motorcycle spin-off.

EUROPE — ENERGY WOES REAPPEAR

Mindful of the ongoing war in adjacent Ukraine, stock traders were disturbed to hear of a sudden 26% surge in European natural gas spot prices, owing to possible LNG supply disruptions from various sources. Their raw nerves were further abetted by news that global oil price benchmarks have risen by roughly a fifth since the end of June, triggered by Saudi Arabia and Russia cutting production.

Inevitable knee-jerk reactions pushed leading eurozone market indices lower. Frankfurt’s Xetra Dax closed 0.8% down and the Borsa Italiana FTSE MIB in Milan dropped by 1.1%. Both Teutonic automotive giants with motorcycling sideshows and Italy’s leading PTW manufacturer Piaggio united in greater losses. Ironically, while the Wiener Börse ATX index in Austria went backwards by 1.7%, KTM parent Pierer Mobility held station by flatlining.

JAPAN — ALWAYS A WINNER

Tokyo’s Nikkei 225 stock index put on 0.9% and Honda was a prime mover, its share price boasting a truly impressive rise far in excess of that, in response to excellent Q1 financial results released during the past week. A podium clean sweep at the Suzuka Eight-Hour endurance race for a trio of Fireblades must have been icing on the cake.

The same could not be said for fellow indigenous motorcycle manufacturers — either at Suzuka or in quarterly results rewards from investors. Yamaha was unfairly mistreated on the latter account only, having easily beaten performance estimates with record half-year operating profit growth (Its star YART entry at Suzuka unfortunately broke down).

Suzuki and Kawasaki Q1 results were open to large-scale deleterious input from outside the motorcycling firmament anyway, even if both their bike businesses did have issues. Suzuki is mainly dependent for prosperity on Maruti Suzuki motor car production in India. And Kawasaki is a massive conglomerate with some divisions that habitually lose money.

INDIA — BACK TO THE FUTURE

Now losing ground for a third consecutive week, Mumbai’s BSE Sensex 30 market index dropped by 0.6%. India’s political and economic malaise clouds investor vision, even if its major motorcycle manufacturers continue to search for silver linings.

On that note, market leader Hero MotoCorp now claims to have more than 25,000 expressions of interest in purchasing the world’s cheapest Harley-Davidson, a 440cc single which is set to reach production by Hero in September. No doubt Hero chairman Pawan Munjal is hoping to stay out of jail long enough to enjoy the proceeds. That particular outcome is apparently uncertain! Bajaj Auto is in hot pursuit with a similar quantity of pre-orders for its also fairly cheap single-cylinder Triumph range too.

And as for their opposition Royal Enfield, its parent Eicher has announced the imminent arrival of a first electric motorcycle for the brand. The mind boggles about what distinctly retro name will be conjured up for that…

BROKEN CHINA?

New data showed the Chinese economy officially slipped into deflation during July, with consumer prices falling in parallel to shrivelling consumption — as unemployment grows, public spending power withers away and exports fall in what is nevertheless still the world’s second-biggest trading nation.

Market indices reflected the gloom these omens engendered. Shanghai’s all-share SSE Composite slumped by 3% and the blue-chip CSI 300 finished 3.4% down. Among the eleven listed Chinese motorcycle manufacturers, only two avoided loss of value — independent KTM associate CFMoto and Yamaha JV partner Jianshe, which is partially state-owned.