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 28 July 2023. BDN financial editor Roger Willis reports.

Many US investors shrugged off signs of slowing growth and concentrated on celebrating strong quarterly earnings statements — the best of which came from the high-flying tech sector. Wall Street market indices all finished positive but, unsurprisingly, the tech-heavy NASDAQ Composite was dominant, 2% up. The blue-chip S&P 500 and Dow Jones Industrial Average did less well, respectively rising by 1% and 0.7%.

S&P’s MidCap 400 was even weaker, adding just 0.4%. And that’s where words of caution on the growth front emerged most clearly. MidCap listing Harley-Davidson was a prime example, revealing a Q2 profit slump and revision of full-year revenue targets. Mercurial Harley supremo Jochen Zeitz admitted that tighter credit is now affecting American consumers’ ability to purchase big-ticket leisure items such as motorcycles. An initial single-session upwards spike for Harley’s share price had largely evaporated by close of play on Friday. And nearest powersports competitor Polaris barely managed to avoid negativity.

Signs that inflation-busting interest rate increases on both sides of the Atlantic were now coming to an end, as the European Central Bank matched the US Federal Reserve wind-down by limiting its latest eurozone rate hike to just 0.25%, boosted investor confidence. Europe’s key market indices responded accordingly. Frankfurt’s Dax Performance and the Borsa Italiana FTSE MIB in Milan posted respective 1.8% and 2.2% gains.

However, the first big German automotive Q2 report from Volkswagen Group was mixed. Although its upmarket Progressive Brand Group encapsulating Audi, Bentley, Lamborghini and Ducati did very well in terms of revenue and profitability, lesser mass-market brands struggling with electrification disappointed investors. So VW’s share price took a degree of punishment. And in Italy, generally excellent Q2 results from indigenous PTW champion Piaggio were mysteriously unrewarded.

Japanese investors had difficulty grasping the Bank of Japan’s latest inscrutable tweak to its policy of capping ten-year domestic government bond yields at 0.5%. The BoJ had announced this level was now a “reference” rather than a “rigid limit” and that it would henceforth use bond purchases to stop yields climbing above 1% — leaving them none the wiser. Nevertheless, Tokyo’s Nikkei 225 market index rose by 1.4% as bond yields promptly hit a nine-year peak. Biker stocks basically remained aloof from these shenanigans, as market participants awaited their quarterly results.

Mumbai’s BSE Sensex 30 market index weakened, recording a 0.8% retreat. But monthly share price movements for key motorcycle manufacturers delivered an interesting read. Hero MotoCorp and Bajaj Auto, both now armed with new premium “heritage” brands in the respective guises of locally produced Harley-Davidson and Triumph steeds, enjoyed the biggest gains. At the same time, their avowed commercial target Royal Enfield parent Eicher suffered the most grievous loss.

Responding to increasingly dire predictions about the lamentable state of China’s economic prospects, the Chinese Communist Party’s Politburo suddenly announced a dramatic extension of support measures to reboot its ailing economy.

Indigenous market indices went ballistic. Shanghai’s all-share SSE Composite stacked on 3.4% and the blue-chip CSI 300 spanning both the Shanghai and Shenzhen exchanges finished a remarkable 4.5% up. A global knock-on effect added value for China-related enterprises listed on a broad swathe of international markets too. The majority of indigenous listed motorcycle manufacturers flipped for losers in the previous week to winners.