Average value of daily trading of AIM falls 18% in the last year, but remains well above historic levels

Publications that covered this story include: Reuters newswire, Yahoo Finance and London South East
  • Sharp fall in Burford and ASOS shares drag down liquidity
  • Top 10 shares make up 43% of trading

Companies listed on the Alternative Investment Market (AIM) have seen the average value of the daily trading in their shares fall 18% to £271,120 over the last year from £328,860*, our research shows.

Falls in the share price of AIM giants like Burford, ASOS and Fevertree, that dominate trading, led to sharp falls in trading of those shares.

The Top 10 shares on AIM** accounted for 43% of trading by value and ASOS for 10% of all trading in October.

The value of Burford’s daily trading on AIM has declined 16% in the last year, whilst ASOS’s fell 30% over the same period.

The fall in AIM liquidity has also been driven by broader trends, with Brexit uncertainty also denting the turnover of UK listed companies. The average daily value traded on the London Stock Exchange’s order book has fallen 17% over the last year.**

Despite the decline in trading over the last year, AIM liquidity remains well above its historical average. The average value of the daily trading has risen 127% in the last five years, from £119,108 in 2014/15 (see graph).

Laurence Sacker, Managing Partner in our London office, says: “After two years of big surges in AIM trading this slowdown is fairly healthy.”

“Much of the liquidity that has left the AIM market in the last year was speculative day trading – the kind of trading that can surge and then dry up quite quickly.”

“AIM trading is still more than twice its long-term average so it does like the London Stock Exchange has does its job in attracting growth companies to aim that can attract and maintain investors interest.”

“Considering the amount of Brexit uncertainty and broader economic concerns, AIM shares look to have weathered the storm well.”

“What will be important over the next two months is ensuring that any Brexit ensures that EU based investors still get easy access to AIM shares.”

Average value of daily trading of AIM falls 18% in the last year, but remains well above historic levels