14-15-Liquidity.qxp 22/4/09 17:01 Page 10
LIQUIDITY DRIVERS ON AIM
Better than the rest
In association with
Good companies are hard to find. Oliver Haill takes a look at what
differentiates the Alternative Investment Market’s most-traded concerns
A
IM’s market capitalisation fell by independent voice had an average of 13 per to trading liquidity. In order to discern this,
over 60 per cent in 2008 as less than cent of their shares traded, compared with the the research accounted for the trading
£1 billion of new money was raised 20 per cent average enjoyed by the companies statistics of every single AIM company over
compared with the £6.25 billion generated the with “better” corporate governance practices. the six months from August 2008 to January
year before. Now, with over a third of AIM Phillip Prince, a partner at BDO 2009 inclusive. Any company that did not
companies valued at less than £5 million and Stoy Hayward, says: “The fact that the witness at least 50 per cent of its share capital
more than two-thirds under £20 million, the most liquid companies have on average traded in that time was excluded, leaving
market’s oft-criticised lack of liquidity is under
more scrutiny than ever.
The research, Liquidity Drivers on AIM,
which was carried out by M&A Magazine’s
“Ten per cent of the market saw at least 50 per cent of
sister title Growth Company Investor in
their entire share capital traded on the stock market”
association with BDO Stoy Hayward, found
that corporate governance was a key factor in
a company’s success. Companies failing to more non-executive directors, and fewer 166 stocks to examine. Of this group, which
separate the role of chairman and chief have the roles of chairman and CEO forms ten per cent of the market, at least 50
executive were found to be “less liquid” than combined, points towards the importance per cent of their entire share capital traded
those that do. The 180 companies across the of corporate governance.” on the stock market.
whole of AIM that have no senior The research assesses the market according In that same six-month period, 728
1 AIM’S MOST-TRADED COMPANIES 2 BEST PRICE PERFORMANCE
‘Pre-eminent’ % of shares Latest Price No. of ‘Pre-eminent’ Price Latest Shares Value of Value of No. of
company traded out market cap performance market- company perf mkt cap traded shares shares market-
of total (£m) (%) makers (%) (£m) (%) traded traded as % makers
(£m) of mkt cap
Titan Europe 265 11.34 -82.48 2 Tepnel Life Sciences 162.50 61.47 98 36.293 59.0 6
Tanfield Group 233 24.64 -16.67 9 Education Development Int 51.09 28.74 55 12.034 41.9 4
Bowleven 189 36.09 -83.46 7 Lancashire 49.68 835.74 147 961.663 115.1 6
GCM Resources 186 30.04 -84.75 8 Kalahari Minerals 43.33 80.06 67 43.169 53.9 8
Polo Resources 163 45.29 -61.82 8 Healthcare Locums 38.54 150.15 99 115.705 77.1 6
Regal Petroleum 156 80.43 -78.51 9 Helius Energy 33.33 20.29 61 10.227 50.4 4
Alpha Tiger Prop Trust 156 16.69 -63.37 5 GNE Group 19.05 20.86 145 36.637 175.6 4
Lancashire 147 835.74 49.68 6 Sportingbet 14.50 156.13 55 74.237 47.5 10
GNE Group 145 20.86 19.05 4 Xploite 4.71 17.57 60 8.095 46.1 4
Afren 140 95.92 -82.70 9 Fabian Romania 1.99 45.88 52 11.528 25.1 3
14 Mergers & Acquisitions
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