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 3 November 2023. BDN financial editor Roger Willis reports.

What a difference one week can make! Dovish remarks from US Federal Reserve chairman Jay Powell finally pointed to elevated anti-inflationary interest rates now clearly cooling the American economy without tipping it into recession. Investors celebrated by piling in to drive a feverish market rally and Wall Street headed for its most bullish trading in a year.

Market indices went ballistic right across the board. Blue-chip S&P 500 stocks stacked on 5.9% by close of play — beaten by a 6.5% rise for S&P’s MidCap 400. The Dow Jones Industrial Average finished 5.1% up and NASDAQ’s Composite added 6.6%.

Hitting their “buy the dip” buttons with gusto, speculators also chased stocks that had just lost value through announcing poor Q3 corporate results, effectively allowing them to recover some of those losses. Harley-Davidson and Indian Motorcycle parent Polaris were among such beneficiaries, as were NASDAQ-listed electric PTW producers Energica owner Ideanomics and delivery scooter star Niu.

European Central Bank president Christine Lagarde had plenty to smile about when it transpired that eurozone inflation during October had fallen much faster than anticipated — now down to just 2.9% and easily in reach of the 2% target set by central bankers everywhere. Only the Bank of England is still wearing an inflationary dunce’s hat among G7 economies.

Key continental stock market indices saw investor enthusiasm duly boosted. Frankfurt’s Xetra Dax put on 3.4%, as both Volkswagen and BMW earned acclaim for satisfactory nine-month YTD corporate reports mainly bragging about their car divisions. However, the latter’s Motorrad arm got egg on its face for an operating loss in Q3, owing to a sudden dose of aberrant inventory management in advance of the new R1300GS roll-out in Q4.

The Wiener Börse ATX in Austria finished 5.5% up and Milan’s FTSE MIB made a 5.1% gain. Following a relatively sound nine-monthly results statement, Italian scooter giant Piaggio showed the first firm sign of share price recovery since the death of its veteran chief executive Roberto Colaninno in August.

America’s surge in confidence lifted Japanese sentiment as well. After a couple of weeks of losses, the Nikkei 225 index spanning Tokyo and Osaka exchanges staged a strong recovery, closing 3.1% up. But most indigenous motorcycle manufacturers weren’t invited to the party. Only Suzuki stayed out of red ink for a second week, and that was probably dependent on its micro-car business prospects rather than bikes. Honda, Kawasaki and Suzuki are all due to release half-year results in the next few days.

With the Diwali Festival of Lights Xmas substitute reaching its potentially lacklustre crescendo next Sunday, Indian investors have begun to run out of excuses for gloom. So Mumbai’s S&P BSE Sensex yardstick perked up slightly, making its first weekly gain (a meagre 0.9% rise) since mid-October. However, the two largest motorcycle producers remained in negative terrritory and best of the rest was a single percentage point advance for Royal Enfield parent Eicher.

For a second consecutive week, leading Chinese market indices remained modestly positive, as the Beijing government continued to splash cash around to stimulate its struggling economy. Shanghai’s SSE Composite rose by just 0.4% and the blue-chip CSI 300 covering both Shanghai and Shenzhen exchanges added 0.6%. But only four of the ten listed Chinese motorcycle manufacturers made gains. And oddly, CFMoto’s widely publicised  new manufacturing relationship with Yamaha is clearly unpopular with domestic investors. The company’s share price has sunk back to its lowest level since the summer of 2020, when China was being ravaged by the arrival of Covid-19.