London’s junior market AIM has ‘strongly outperformed’ its bigger company rivals in several areas since the start of the Covid-19 pandemic, according to new data from accountant UHY Hacker Young.
In particular, the largest AIM members have seen much better share price performances than the Main Market during the first year of the pandemic.
The AIM All-Share Index rose 22% between February 1 2020 and January 31 2021, in comparison to the FTSE All-Share Index, which fell 10% said the accountant.
Relatively fewer companies have also left AIM compared to the Main Market, with the money raised holding steady compared to a dip in the amount by entrants onto the main board.
“AIM has been buoyed over the course of the pandemic by its large exposure to some of the economy’s best-performing sectors, such as technology,” said UHY.
Boku (formerly Codemasters) (+107%), Frontier Developments (+96%), Keywords Studios PLC (LON:KWS) (+65%) as well as SME management software maker Maestrano (+487%) were major contributors to AIM’s outperformance over the past year.
Online fashion retailer Asos PLC (LON:ASC) (+89%), now the largest AIM company by market cap, also recorded strong share price growth.
AIM only took until October 6 to make up all the ground it lost in the fall in share prices triggered by the pandemic in February, while the market saw 20 IPOs in 2020/21, down only marginally from 23 a year earlier.
A number of floats that were shelved during 2020 now being restarted while secondary fundraising saw more than £5.1bn raised, up 50% from £3.4bn in 2019/20 (year-end Jan 31). The biggest fundraises on AIM during the year were by Asos (£246ml) and Boohoo PLC (LON:BOO) (£197mln), both of which were used to fund M&A deals for fashion retailers.
Dan Hutson, Partner and Head of Audit at UHY Hacker Young, comments: “A year on from Covid, AIM has defied widespread expectations of underperformance and had a far better year than the Main Market.
“AIM acted as a great platform for its businesses to grow over the past year.
“AIM is now a much more robust market than it was in the last recession – it has better companies, better regulation and a better orientation towards growing sectors like technology.”