The average value of shares trading daily on London’s Aim market has risen over the last year, despite uncertainty following the UK’s decision to leave the EU.
Liquidity on the UK’s junior market increased by nine per cent year on year, according to data from accountants UHY Hacker Young.
The average daily value of shares traded per company listed on Aim rose to £125,416, up from £114,439 last year.
Predictions of a sharp recession after the Brexit vote did not seem to have an effect on Aim liquidity, with the average daily value of shares traded per company increasing by 45 per cent from August to September, before breaking through the £200,000 mark in October.
The exchange specialises in smaller companies, with less costly listing conditions – 993 companies with a market value of £81bn were listed on the exchange in November, according to Aim.
In crisis conditions Aim can prove vulnerable to a “flight to quality” as investors flee perceived riskier assets. Liquidity decreased markedly after 2007 during the financial crisis.
“We think that is a reflection of Aim’s increasing resilience supported by the maturity of many of the companies on Aim. A lot of the weakest Aim companies have been purged over the last five years and we now have an increasingly solid and high quality base of companies on Aim,” said Laurence Sacker, managing partner at UHY Hacker Young.
Aim – the Alternative Investment Market – has had mixed results since it was started in 1995. It has had notable successes which have graduated onto bigger exchanges from the 3,600 companies listed on it, such as Domino’s Pizza.
However, the lower regulatory requirements have also contributed to blow-ups and allegations of financial irregularities, such as at mobile technology company Globo.