Stock exchange news. The second wave of world economic crisis is checking absolutely all spheres of world economy for strength, including the market of car manufactures. What automobile giants do stock exchange investors refuse to support most of all, whose shares fall more than others at stock exchange because investors and traders get out of them first of all, hardly finding those who would like to buy them? “The market is always right,” claims investors’ axiom. Therefore, having a close look at stock market quotations, one can easily understand who is “the weakest link” or a potential outsider of large-scale the market of car manufactures.
Stock exchange: why do the shares of all car manufacturers worldwide fall and whose quotations fall most rapidly?
As explained by the experts of (the best European forex and stock exchange studying project in 2009-2011) to the “Market Leader”, the fall of the shares of all car manufacturers worldwide, with no exception, is caused by the general world tendency that has been called 2nd wave of world crisis:
■ all stock indexes fall (Dow Jones, S&P 500, DAX, Nasdaq, Nikkei 225, РТС, CAC 40, MICEX, etc.); consequently, securities quotations fall down to approximately equal extent (shares, bonds, potions);
■ reasons for investors’ panic: worse economic situation worldwide – pre-default state of the USA in August 2011, of Greece, Portugal , Spain , Italy, and many other countries worldwide;
■ another reason for panic was the claim of the US FRS, made in September, about poor national economy, which is the leading world economy. And it is most important that no specific measure that can resist further economic decline has been called. Moreover, American experts... can neither see the way out from the situation;
■ fall of general buying capacity (first of all, durable goods, including cars), almost in all regions worldwide;
■ disaster at Fukushima-1 nuclear power station, which has caused the situation when a number of largest Japanese automobile companies had to cut their production volumes for some time. Some of them even had to suspend production release, which has resulted into the deficit of components and repair parts as well as to the mass sale of the shares of Japanese automobile giants.
The market tendency is clearly shown at the chart that depicts the fall of car industry shares. This tendency remains since February 2011 and worsens every month due to the increased sales of frightened investors, as highlighted by the analytics of Department of Portfolio Investments:
Which automobile giant is the leader of falling?
According to the experts of , weak management, marketing, and merchandising, which are usually hidden, are most vivid during crisis. It is usually difficult to see the outsider among car companies during growth, but during crisis the shares of these companies fall most rapidly.
It is during global economic turmoil that the tendencies, which allow to identify whose shares drop in value most rapidly, are evident.
Currently, according to the most recent analysis of automobile companies’ economic activity, the leaders of the fall of shares are:
As observed from the chart, Fiat has remained the leader of the fall of shares since the beginning of the year, the reason of which is information about its bankruptcy, unbalanced, and ineffective management. The company’s shares have sunk by 73.78%. The further list of companies according to the level of the fall of shares includes:
- Volvo – 45.60%;
- DAIMLER AG (DDAIF) – the fall of stocks has amounted to 34.13%;
- Honda motor (HMC) – 25.28%;
- Totota motor CP (ТМ) – 18.93%;
- Nissan ADR (NSANY) – 12.52%;
- Volkswagen-adr (VLKAY) – 11.83%;
- BMW AG (BAMXF) – 9.46%
Group analysis of car manufacturing companies:
- Volvo AB ADR B (VOLVY)
- Fiat SPA (FIATY)
- BMW AG (BAMXF)
- Honda motor (HMC)
- Nissan ADR (NSANY)
- DAIMLER AG (DDAIF)
- Volkswagen-adr (VLKAY)
- Totota motor CP (ТМ)
Fiat is the leader of fall in terms of market capitalization:
Volvo is the leader of fall in terms of sales volumes:
Fiat is the leader of fall in terms of net profit:
The leaders in terms of return on assets, investment attractiveness, and capital volume are:
- Volkswagen (ROE - 23.29%, ROA - 5.59%, ROI - 22.92%)
- Volvo (ROE - 22.01%, ROA - 5.17%, ROI - 10.32%)
- Daimler AG (ROE -15.59%, ROA - 4.28%, ROI - 15.31%)
Despite the general fall of automobile companies’ shares, experts believe that the shares of BMW, NISSAN, and Volkswagen can start going up in value.
Moreover, there is a hope for leaving a bear trend. Toyota is recognized as leader by the specialists, who expect EPS growth by 67.95% next year. Volkswagen situation, on the contrary, is positive in this reference: EPS shortage by 19.42% is expected.
EPS growth is expected in the long-term, in three-five year time, FIAT (71.12%), Volkswagen (48.78), and Toyota (48.78%) are leaders.
Toyota Motor Corporation and Volvo are the leaders of ineffective activity, which have shown the worst results.
The Editorial Board of “Market Leader” magazine, jointly with experts of Forex Academy and Masterforex-V Stock Exchange and Futures Trade, holds a questionnaire in the Forex forum: in your opinion, is the worsening of automobile companies’ activity the result of world crisis?
■ yes, for world crisis is spinning up;
■ no, the companies’ management is guilty, for the shares of automobile giants fall at a different pace.
