AIM outperforms London’s main market during 12 months of Covid-19
A year on from the start of the Covid-19 pandemic, the AIM has strongly outperformed London’s main market, something highly unusual in periods of economic downturn.
London’s AIM outperformed the FTSE All-Share by a number of metrics, in part due to several of its listed companies performing well during the pandemic.
The AIM All-Share index rose 22 per cent between February 1 2020 and January 31 2031, while the FTSE All-Share Index fell 10 per cent.
Elsewhere, AIM – London’s Alternative Investment Market – saw the number of companies leaving the marketplace fall 27 per cent to 55 in 2020/21, while the number of companies de-listing on the FTSE All-Share, rose eight per cent to 53 during the same year, research by UHY Hacker Young found.
On top of that money raised by new companies joining the main market fell 19 per cent to £2.5bn in 2021/21, while AIM only saw a decline of one per cent from £496m to £489m.
According to UHY Hacker Young, 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.
Strong share price performance by AIM-listed video games companies Boku (+107%), Frontier Developments (+96%), Keywords Studios (+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 (+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.
Dan Hutson, partner and head of audit at UHY Hacker Young, said: “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’s big success stories like Asos and Boohoo were able to quickly raise cash to acquire high street fashion brands when they saw the opportunity.”
More IPOs to come
UHY Hacker Young said there is pent-up demand for AIM IPOs, with a number of floats that were shelved during 2020 now being restarted. There is expected to be strong IPO activity on the market during the second quarter of the year as the UK’s vaccination programme progresses.
Secondary fundraising was also a major success for AIM companies in 2020/21, with more than £5.1bn raised, up 50 per cent from £3.4bn in 2019/20.
Much of the money raised in 2020 was to fund acquisitions later in the year. The biggest fundraises on AIM during the year were by Asos (£246m) and Boohoo (£197m), both of which were used to fund M&A deals for fashion retailers.