The value of the AIM market grew again in August reaching a level not seen for several years.
At the end of August 2016 there were 1,007 companies on AIM with the total market value £80.568bn. This compares with 1,010 companies on AIM at the end of July 2016 when the market value was £77.396bn. The FTSE AIM 100 index rose 3.44% in the period which compares positively to the rather modest 0.85% rise of the FTSE100.
This is the first time AIM had breached the £80bn month end market cap level since February 2014 when companies with a total market value of £1bn were admitted. August 2016’s new arrivals had a market capitalisation on AIM admission of only £197m highlighting the strong growth of the market as a whole.
While AIM remains well below its high point of July 2007 when the resources sector was in full swing and the market capitalisation of the junior market hit £108bn, we sense that the current newcomers are likely to be around a lot longer than the vast majority that joined back then.
It’s interesting to note that back in July 2007 a staggering 36 companies joined AIM with a market capitalisation of a whopping £2.5bn. Even August 2007 saw 27 admissions with a market capitalisation of £1.2bn. While the corporate brokers may be longing for a return of the glory days of old, we think shareholders are much better off with the current status quo of ‘less is more’.
The AIMsearch tool on FAM’s sister site www.investorschampion.com continues to offer guidance on which AIM companies benefit from valuable tax benefits which is freely accessible for both IFAs and investors to use.