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 16 February 2024. BDN financial editor Roger Willis reports.

USA — HANGOVER CURE

After a steady stream of boosts to record highs for US equities, the tide turned, sucking out confidence. Discouraging economic data included stronger than expected January inflation figures, sparking an initial sell-off. Then a rise in core US producer prices further dented investors’ hopes for rapid interest rate cuts from the Federal Reserve. So Wall Street indices edged lower, with declines for six of the “magnificent seven” leading tech stocks.

That knocked the tech-heavy NASDAQ Composite to a weekly close 1.3% down, its first significant reversal this year. S&P 500 blue-chips also finished 0.4% in arrears and the Dow Jones Industrial Average copped a more marginal 0.1% loss. However, S&P’s MidCap 400 was buoyed by retail traders seeking bargains and flipped the coin to improve by 0.7%.

Among MidCap-listed powersports players, Harley-Davidson was a beneficiary despite poor full-year results, although its LiveWire e-PTW spin-off was a loser. Ideanomics, which is NASDAQ quoted, held station at a flatline 1.05 bucks, after its majority-owned Energica electric motorcycle subsidiary in Italy announced an agreement to supply sparky powertrains to Denmark’s revived (and now electrified) historic Nimbus bike brand.

EUROPE — INVESTORS ACKNOWLEDGE SUCCESS

European market indices ended the week on a high, with the region-wide Stoxx Europe 600 adding 0.6%, Frankfurt’s Xetra Dax 1.1% up and the FTSE MIB in Milan putting on 1.8%. A succession of robust quarterly and full-year corporate results were largely responsible. As yet, these do not include anticipated FY data from BMW Motorrad, Volkswagen’s Ducati sideshow or scooter superstar Piaggio.

In Austria, the Wiener Börse ATX gained 1.4%. But that didn’t signify much in the way of admiration for local hero KTM parent Pierer, the lamentable annual profit slump revealed in preliminary FY results of which was duly punished.

JAPAN — THE ONLY WAY IS UP?

Once more, Japanese stocks vectored in on record highs, as Tokyo and Osaka’s export-oriented Nikkei 225 index stacked on a 4.3% weekly gain and kept on intermittently poking its nose through the 37,000-point line not seen for 34 long years.

As elsewhere, corporate results were to the fore. But the latest of these among biker stocks, a full-year revelation from Yamaha Motor published on Valentine’s Day, drew the wrong reaction from traders. Available to our readers in the March issue of BDN, this showcased an excellent performance by Yamaha’s dominant motorcycle division in 2023. But it was qualified by a forecast of profitability decline in 2024, which left a sour taste in the mouth for investors and an immediate share price reversal.

INDIA — HARVESTING HIDDEN EXPLANATIONS

Mumbai’s S&P BSE Sensex 30 and NSE Nifty 50 market indices signalled rejection of the previous week’s gloom, as they swung in unison to both turn positive by 1.2% at close of play. Rather than sound commercial reasoning, enthusiasm for the ruling Hindu nationalist BJP’s certainty in winning this year’s Indian General Election was apparently a driving force.

Ironically, among India’s five motorcycle manufacturing giants, market leader Hero MotoCorp proved to be the sole non-beneficiary. Hero’s onerous and ongoing tax dispute with BJP-controlled regulators may be an aspect of investor reluctance. Mahindra & Mahindra flagged up the biggest gain. Record quarterly agricultural tractor sales, by the world’s leading tractor producer, tends to attract interest. A few thousand retro BSA motorcycles would hardly get comparable attention.

CHINA — DAMP SQUIB HOLIDAYS

Chinese Lunar New Year holiday celebrations officially continued throughout the week. Return to some semblance of commercial and industrial normality was scheduled for Monday 19 February. Until then, wealth-generating activity in the world’s second largest economy remained entirely frozen. Stock Exchanges in Shanghai and Shenzhen had their doors firmly bolted, with screens for share indices blank. The Beijing government had been widely promoting consumer spend by holiday-makers. But early reports suggested they had mainly kept their hands in pockets and many had simply stayed at home.

Motorcycle manufacturers, hiding behind locked factory gates, weren’t manufacturing anything. And presumably their domestic dealer networks weren’t selling anything either. Export shipments would also have been on hold for the duration too. How to exaggerate a crippling recession with Chinese characteristics?