AIM market breaks 1,000 level for first time in nine years

Green-Shoots-Emerging-Growth-700.jpgThe FTSE AIM All-Share index climbed past the 1,000 level for the first time in nine years last month.

The index of small-cap alternative stocks has soared 20 per cent in the past eight months, outperforming other domestic indices this year.

Lee Wild, head of equity strategy at Interactive Investor, says: “Perhaps the biggest story to pass under the radar in August was the AIM market’s break above 1,000 for the first time since summer 2008.”

Wild lists Frontier Developments and Plus500 as among the top outperformers in the junior market, with the AIM stocks up 67 per cent and 45 per cent respectively. Meanwhile the trading volume for Semiconductor manufacturer IQE on the Interactive Investor platform more than doubled in August, with the share price rising 29 per cent.

“A rally, given fresh momentum by a bullish update in July, spilled over into August, pushing IQE shares to new highs,” Wild says. “There’s real excitement here as market watchers speculate about the possibility its chip components feature in Apple’s new iPhone 8.”

Wild adds that the large-cap indices have not fared so well on the back of geopolitical concerns, although contrarian investors have been taking advantage of market weakness.

“Following an exhausting 2,000-point rally between February 2016 and the record high in June this year, equity markets have extended their pause for breath, moving largely sideways over the summer months,” he says.

“Both the FTSE 100 and broader FTSE All-Share index rose less than 1 per cent in August, though North Korean sabre-rattling tested investors’ nerves. Concerns that Kim Jong-un could nuke Guam, the US west coast or anywhere in between began a rollercoaster ride through the month, as enthusiastic buyers took advantage of each sell-off.”

Barclays was one of the most traded stocks having plummeted 6 per cent in August to its lowest level since November 2016.

“Trading at a discount to most domestic peers on several key multiples, Barclays gatecrashed the top five most-traded large-caps on the Interactive Investor platform as buyers outnumbered sellers by more than two-to-one.”