Volume of shares traded on AIM shows greater resilience than the Main market in the face of Eurozone crisis

Publications that covered this story include Financial Times, Independent and City AM – 29th October 2012.

  • Average daily value of shares traded on AIM up 40% since 2009

The daily value of shares traded on AIM has shown greater resilience than the Main market in the last year, even as the Eurozone crisis has deepened.

Our research reveals that the average daily value of shares traded on AIM fell less than 1% from September 2011 to September 2012, from an average of £115.8m in 2011 to £115.4m.

Laurence Sacker, partner at our London office, says: “AIM’s resilience is impressive, especially when you consider the buffeting effect that the Eurozone crisis has had on the Main market.”

“Despite the slight dip in volumes, trading activity on AIM remains relatively buoyant. This level of activity suggests that AIM is in good health, and should come as a welcome boon for AIM shareholders.”

AIM’s average daily value traded per company currently stands at £138,070 (year to September 30 2012). This is up 40% since the height of the recession in 2009 and near to pre-financial crisis levels last seen in 2007-8 (See graph below).

AIM saw a surge of companies leaving its market at the start of the financial crisis (74 companies left in Q1 2009 alone).

Laurence comments: “The exodus of smaller, less liquid companies from AIM at the start of the financial crisis means AIM is now a leaner, fitter and healthier marketplace.  AIM companies are currently benefitting from very healthy trading levels in their stocks.”

“AIM has not been completely immune from the global flight from risk, but the flurry of delistings of weaker AIM companies at the start of the financial crisis separated the wheat from the chaff, and meant that trading volumes have held up remarkably well despite the stream of gloomy news from across the Channel.”

“The market cap of AIM companies has obviously taken a hit from the Eurozone crisis, but the fear that liquidity would drain from the market has proved to be false.”

“A low level of share liquidity on AIM has been a common concern for AIM shareholders and for businesses considering listing on AIM, so it’s encouraging to see the market performing well in this regards.”

“Share liquidity is a key issue for junior stock markets as investors need to know they have a fair chance of being able to exit their position if they need to.” 

Average value (£s) of AIM shares traded per company per day:

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Average daily value of shares traded on AIM (£millions):

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