AIM trading boosted by nearly 30% as investors flock to market

Publications that covered this story include City AM, 13 January.

  • ISA eligibility and renewed appetite for growth stocks mark turning point for AIM

The value of investors’ trading activity in AIM stocks has risen dramatically in the last few months, signaling what could be a turning point for the market, according to our research.

Since August 2013, when AIM stocks first became eligible for inclusion in ISAs, the average daily value traded in AIM stocks, has risen by 29% to £127.6 million, reaching as high as£148.4 million during October.  By contrast, over the same period, the average daily value traded in FTSE100 stocks declined slightly, down by 3% to £6.2 billion.

Our analysis shows that being able to include AIM stocks in ISAs has attracted more retail investors to the market, particularly as a growing number of AIM companies are now paying a dividend.

In addition, improving economic sentiment, especially towards the UK economy which is now rated by the OECD as having the fastest-growing in the developed world, has revived investors’ risk appetite.  This has resulted in renewed interest in AIM’s small, but potentially high-growth companies.

Our recent research showed that AIM has grown for the first time in six years, with the number of companies joining the market outweighing the number of companies leaving.

Laurence Sacker, Partner, says: “Since the depths of the recession, AIM has shed many of its weaker and more speculative companies, and the proportion of more mature, profit-generating companies has grown.”

“However, the level of trading activity on the market did not quite reflect the transformation of AIM itself.”

“Making AIM eligible for ISAs appears to have coincided nicely with a return of appetite for both smaller companies, and for exposure to the UK economy, and that has significantly boosted investor interest in AIM.  It could well be an important turning point in AIM’s fortunes.”

AIM and FTSE100 TRADING

Investor interest in AIM booms – Average daily value traded on AIM in millions, August – November 2013

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Values traded on FTSE 100 in millions – August – November 2013*

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*Trading on London Stock Exchange Order Book