LONDON’S market for shares in small cap companies – the Alternative Investment Market (Aim) – is seeing levels of trading not witnessed since before the 2008 financial crisis.
The value of shares traded on Aim averaged at £156,000 per company per day, data released today by accountants UHY Hacker Young shows. It marks a 50 per cent jump on 2013’s £107,000 per company per day. The recession trough of Aim trading was reached in 2009 at £95,000. The improvement in Aim’s liquidity has been despite the market’s weaker recent performance, with the FTSE Aim All-Share index dropping to 702 in December 2014, its lowest level in three years.
“Increased investor interest in Aim drove the surge in liquidity during 2014, despite a patchy performance in the valuation of companies across the market as a whole, with many of the larger companies hit by falling oil and commodities prices,” said Laurence Sacker, corporate finance partner at UHY Hacker Young.
“In the aftermath of the economic crisis, many investors were reluctant to invest in small cap companies because of the increased risk.”