The AIM All-Share ended the week in fine fettle after passing a modest but symbolic milestone earlier in the week. Pushing through the 800-point level, it moved into territory last seen in May 2024.
The momentum in small caps suggests the positivity that has driven the FTSE 100 into record territory, and above 10,000, is finally filtering down to the junior end of the market.
Year to date, the All-Share is up 5%. It now stands 9.5% above November’s low and 22.5% higher than last April’s five-year nadir.
The problems faced by AIM in the wake of the boom and bust from 2021 to early 2022 have been well rehearsed in this column, but bear repeating. Global conflict sparked by the war in Ukraine and instability in the Middle East ushered in a risk-off environment.
Risk-off
Put simply, investors became reluctant to back more entrepreneurial companies, preferring the perceived safety of income-generating, steady performers. There has also been the powerful lure of America’s artificial intelligence-fuelled technology sector.
The upshot has been a sharp curtailment in smaller companies’ access to growth capital, the lifeblood of the sector, while share trading activity, known as liquidity, has stalled. That, in turn, makes it harder for investors to trade in and out of stocks, leaving many effectively uninvestable.
The net impact has been a steady drift of AIM companies into private hands, where, somewhat counterintuitively, they can access pools of capital unavailable on the public market. What we have seen in recent weeks is the start of an unwinding of that process, although this week did bring another delisting announcement.
The real acid test for AIM will be a revival in fundraising and initial public offering activity, which would show the recent renaissance is backed by hard cash. That has yet to materialise, though the market is only just emerging from the Christmas hiatus.
Stake-building
Turning to the movers, the week’s biggest gainer, Bradda Head Lithium Ltd (AIM:BHL, OTC:BHLIF, TSX-V:BHLI, FRA:8CD1), more than doubled over five trading days amid whispers of stake-building activity.
Oracle Power PLC (AIM:ORCP) surged 124%, with interest sparked by a trading halt in Australia on shares of its joint venture partner, Riversgold.
Down under, regulators use trading halts to prevent speculation ahead of major announcements. In this case, the halt remains in place ahead of the release of exploration results from the Northern Zone gold project in Kalgoorlie, alongside details of a planned capital raising. In the UK, expectations are firmly tilted towards good news.
EQTEC PLC (AIM:EQT, FRA:KEU) shares rose 57% after the company unveiled plans to add capital-light exposure to critical and precious metals, aiming to generate nearer-term cash flow alongside its waste-to-value gasification platform.
80 Mile continued its surge, climbing 40% as fresh rhetoric from Donald Trump put Greenland back in focus. The US president has framed his interest around security, but analysts widely see the territory’s rich mineral endowment, crucial for modern electronics, as the real prize.
Among the fallers, Indus Gas topped the list, down 28%, after outlining plans to delist from AIM.
Short-term pain
It was short-term pain for long-term gain at Shuka Minerals PLC (AIM:SKA). A £1 million fundraising at a discount increased dilution and pushed the shares down 25%. However, the deal has secured the Kabwe Zinc Project in Zambia, a historically significant mine with estimated remaining resources valued at more than $2 billion.
Finally, CelLBxHealth PLC (AIM:CLBX, OTCQB:ANPCF, FRA:DWV), formerly ANGLE, slipped about 10% on Friday after a trading update. According to Cavendish, investors may be missing the bigger picture at the medical technology group, which has developed a cancer detection system with the potential to transform both research and treatment.
The broker reiterated its 4p price target, more than four times the current share price of 0.9p. Cavendish said recent restructuring means near-term revenue slippage is largely immaterial, with focus shifting to execution from 2026.
Annualised cost savings of about £5.9 million are expected to reset the earnings base, while a £7.3 million cash balance provides breathing room. Forecasts remain unchanged through to 2028, reflecting what the broker sees as the company’s longer-term commercial potential.