On the Money
On the Money Market analysis with financial editor Roger Willis
I
t would be wrong to assume mounting tension over the Northern Ireland protocol has no connection whatsoever with motorcycle industry issues. On the contrary, they are completely intertwined, highlighting the fallacies inherent in our supposed return to stand-alone national sovereignty. This protocol was established as a key element of Britain’s withdrawal agreement from the European Union, eagerly signed by Boris Johnson in December 2019. To avoid the possibility of a hard border once again dividing the Irish people, potentially undermining the 1998 Good Friday peace accord that ended 30 years of intercommunal ultraviolence, it kept Northern Ireland within the EU single market for goods by simply moving a theoretical UKEU border into the middle of the Irish Sea. Prior to Johnson scrawling his signature on the deal, he had placated the outrage of Ulster Unionists by insisting that there would be “no forms, no checks, no barriers of any kind” – promising unfettered access for goods moving in either direction. This was, of course, blatantly untrue. So when customs declarations, inspections and the mountain of bureaucratic paperwork that goes with them
(to which he’d actually agreed) began to surface, a blame avoidance game ensued. Increasingly strident rhetoric featured on both sides. Johnson’s abrasive Brexit minister Lord Frost claimed that the EU’s firm stance as regards application was disrespectful, onerous, disruptive, etc. His opposite number, European Commission vice-president Maros Sefcovic, said EU patience was “wearing very thin” over the UK’s perceived failure to
with EU food and agriculture standards like Switzerland, even temporarily while a far more comprehensive free trade agreement was negotiated, the need for border restrictions at Northern Irish ports would virtually disappear. That went down like the proverbial lead balloon, provoking a Brexiteer mantra about how he’d failed to understand cherished sovereignty meant Britain was no longer an abject rule-taker from Brussels.
He had placated the outrage of Ulster Unionists by insisting that there would be “no forms, no checks, no barriers of any kind” implement basic parts of the protocol. Johnson added one of his faux-Churchillian threats, saying he would “do whatever it takes to protect UK territorial integrity”. Irish prime minister Micheál Martin riposted that “unilateral deviation” from the protocol was a line that couldn’t be crossed. And even US president Joe Biden, an avowed Irish-American, rattled his rusty sabre at Boris, for daring to do anything that might damage Ireland’s peace process. Sefcovic, meanwhile, had pointed out the bleedin’ obvious. If Britain aligned
But, as the British bike business knows well, exemption from EU rule-taking is utter nonsense. Personal protective equipment for bikers, riding apparel typically carrying the CE logo on labels to denote a quality and efficacy standard complying with European regulation EN 17092, is a good example. Manufacturers are now obliged to use a UKCA mark for garments sold here, inevitably sitting alongside CE. The standards are, to the best of my knowledge, identical. And they will remain so, updated in parallel going forward, because
manufacturers and distributors understandably want to access every available market with the same products. If proof of kosher or halal status was required, they would cheerfully add those appropriate symbols too, just not on pigskin products. In a similar vein, once the current Euro 4 derogation period expires, all British bike dealerships will be selling motorcycles and scooters boasting full Euro 5 emissions, safety and security compliance – as decreed by Brussels, not Boris and his buddies at the DfT. The small handful of new bike manufacturers on British soil will also continue to homologate their products through European Community Whole Vehicle Type Approval (ECWVTA), thereby achieving accreditation throughout the EU and acquiring authorisation to issue Certificates of Conformity for every machine made. Amusingly, Her Majesty’s Vehicle Certification Agency still recommends ECWVTA as “the best approval option” on its website, based on test methodology outlined in the relevant European Commission instrument, rather than pushing any whizzbang Bonzo Boris remonikered alternative. So much for “taking back control” of our destiny. Way back in January, when
International Share Prices USA – INFLATION CONFIRMED Confidence in the US Federal Reserve’s assertion that rising inflation was a temporary feature of economic recovery began to crumble. And these fears were stoked when the Fed flipped mid-week, admitting that interest rate increases were imminent to ameliorate such pressures. New York traders began to run for cover and the Dow Jones Industrial Average slumped to its worst week for four months, closing 3.4% down. While the blue-chip S&P 500 index fell by 1.9%, S&P’s MidCap 400 was hammered by a 5.1% loss. Biker stock performance was written in mixed degrees of red ink. After an indecisive start, Harley-Davidson’s losing streak throughout June thus far accelerated. Monday saw a 0.8% fall, but 1.3% recovery followed on Tuesday. However, as
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NYSE market indices settled into uninterrupted negativity, value declined at a greater pace. Its share price dropped 2.5% on Wednesday to $46.42, then sank by 3.8% to $44.64 on Thursday. On Friday, a further 2% retreat ensued, inflicting Harley’s lowest valuation since mid-April – and 15.8% down on the YTD peak of $51.96 in May.
EUROPE – SAME STORY Fresh data bolstered concerns about inflation across Europe too. Having flat-lined across the previous five sessions, Frankfurt’s Xetra Dax index dropped by 1.6%. Germany’s two motorcycle-related automotive giants shed value at a much faster rate, more than doubling that woe. And although limited liquidity confined KTM parent Pierer to smaller increments, it lost ground for a second week.
In Italy, a run of multi-session growth in the past few weeks ended a bit more firmly, as Milan’s FTSE MIB index declined by 1.9%. Piaggio finished slightly ahead of the loop. But Energica, as an inevitably volatile SmallCap stock, dived.
JAPAN — GLASS HALF EMPTY Japanese exports during May achieved their sharpest rise in 41 years, but the chances of good fortune continuing in an inflationary curve made investors nervous. So Tokyo’s Nikkei 225 index never really got its motor running and closed up by just 0.1%. Among biker stocks, only Yamaha stayed shiny side up.
INDIA – COVID HANGOVER In the aftermath of India’s devastating Covid second-wave infection, bike
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