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 15 December 2023. BDN financial editor Roger Willis reports.

Ecstacy swept through Wall Street, as US Federal Reserve chairman Jerome Powell abandoned his hitherto hawkish stance and went into full-on dove mode. Powell announced that he now anticipates at least four base interest rate reductions going forward through 2024, indicating confidence that his battle with inflation was well and truly won.

Stocks rallied like there was no tomorrow, with traders grabbing anything that remotely ressembled a bargain. New York equities were soon on track for their seventh consecutive week of gains. By close of play, all four market indices were comfortably plump. The blue-chip S&P 500 and Dow Jones Industrial Average respectively rose by 2.5% and 2.9%. NASDAQ’s Composite put on 2.8%. But S&P’s MidCap 400 beat the lot, stacking on 4.3%.

Typical of the “buy now, regret later” MidCap frenzy, Harley-Davidson shares climbed inexorably, finally wiping out all of the losses incurred after revealing shabby Q3 numbers and blithely ignoring the fact that its Q4 performance will almost certainly be worse.

Despite efforts by European Central Bank president Christine Lagarde and Bank of England governor Andrew Bailey to introduce notes of caution, the former stressing that there was “more work to be done” in the fight against inflation, many investors on our side of the Atlantic were keener on refreshed American-style enthusiasm for risk.

The Stoxx Europe 600 index therefore notched up a fifth consecutive weekly advance. But some leading national exchanges were more circumspect. In Frankfurt, the Xetra Dax declined slightly by 0.1%, negativity exactly matched by the FTSE MIB in Milan. And in London, the FTSE 100 fell by a full 1%.

However, there were some notable trend-buckers among biker-related stocks. BMW in Germany and Piaggio in Italy both made solid gains. Conversely, Volkswagen flatlined and KTM parent Pierer in Austria continued to lose value at pace.

A huge political scandal engulfed Japan’s ruling Liberal Democratic Party (LDP), as four cabinet ministers were forced to quit in a major corruption probe. Already unpopular, prime minister Fumio Kishida’s approval ratings sank to an all-time low.

Tokyo and Osaka’s Nikkei 225 stock index plunged by 2.1%, as state prosecutors launched far-reaching investigations into LDP slush funds filled by corporate donors. Just how many of those donors will also be fingered is moot. Some of them may make motorcycles.

India’s National Stock Exchange (NSE), closely pursued by the Bombay Stock Exchange (BSE), is set to overtake Hong Kong as seventh-largest borse in the world by total market capitalisation. In US dollars, the NSE reached $3.7 trillion by the end of October, as opposed to HK’s $3.9 trillion. It is expected to catch HK by the year end.

Indian markets are ripe with speculative retail equities investors, eager to push up corporate valuations. In the past week, indices kept on climbing, irrespective of company performances. The BSE Sensex 30 added 2.4%; the NSE’s Nifty 50 surged by 4.9%. Naturally, motorcycle manufacturers revel in this ride.

If seasonal Yuletide weather is conspicuous by its absence in the UK, this certainly wasn’t the case throughout China during the past week. A cold wave has frozen most of the country, with sub-zero temperatures, heavy snow, large-scale transport disruption and industrial closures. President Xi Jinping has apparently called for “all-out emergency response measures”.

However, stock exchanges continued to function, even if their market indices reflected meteorological gloom. Shanghai’s all-share SSE Composite fell by 0.9% and the blue-chip CSI 300 finished 1.7% down.

Oddly, a narrow majority of the ten listed Chinese motorcycle manufacturers prospered in these wintry conditions. Yamaha JV affiliate Linhai, noted for its quadbikes, did remarkably well. The right product in the right place? Traction control with jingle bells?