London’s junior market has seen its liquidity plunge as investors turn to the US.
Companies on the Alternative Investment Market (AIM) have suffered from a 15.4 per cent fall in the average value of the daily trading of their shares.
This underscores wider concerns about the UK stock market as firms continue to be snapped up by foreign predators or choose listings overseas.
Average liquidity fell to £248,990 for the year to February – down from £294,300, according to accountancy firm UHY Hacker Young.
It said the decrease was partly fuelled by British investors trading in stocks listed elsewhere – like tech stocks such as Nvidia.
Concerns: Companies on the Alternative Investment Market have suffered from a 15.4 per cent fall in the average value of the daily trading of their shares
Colin Wright, at UHY Hacker Young, said: ‘Whilst AIM remains a key trading platform, the drop in its liquidity shows that more needs to be done to help keep UK stock markets as attractive trading and investing venues.’
A stream of companies have given up their listings on AIM, falling by 70 to 738 at the end of March. Just one firm has joined while ten listed last year. In 2007 there were 1,700 companies.