January Market Overview
We are pleased to supply the Monthly Market Overview for January. You will find, as well as a brief comment on the market, the Top 25 Most Actively Traded Securities, figures for Turnover by Sector, Top 25 Aim Companies by Market Capitalisation, Distribution of Equity and finally Admissions and Cancellations.
Market Comment
In December the UK stockmarket enjoyed its traditional Christmas rally and this seemed to continue into the new year as the FTSE 100 Index ran up to almost 4,700 at the beginning of January. This run took place on low trading volume so it was not surprising to see the Index fall below 4,000 once more, albeit it very briefly and the it now looks like it has established a trading range of between 4,000 and 4,500. The AIM All Share Index fol-lowed a similar course rising in early January then falling again, although unlike the FTSE 100 Index the FTSE AIM All Share ended the first month of the year higher than where it finished in 2008.
The FTSE AIM All Share Index ended January at 404.61 up 2.6% on the previous year close of 394.32. Having fallen such a long way in 2008 this can not be seen as a significant recovery but there are signs that point to the fact that some investor confidence maybe beginning to trickle back into smaller companies. For the best part of 2008 any company on AIM releasing results saw its share price fall which generally had no bearing on the na-ture of their results. If the results were positive the share price fell and if the results were at all negative the share price took a hammering.
Recently a number of companies have reported encouraging results and have seen their share price move in the right direction. On 26 January Helius Energy announced an impressive set of results for the year ended 30 September 2008 which were well received by the market and the company share price increased. This is an-other small but positive sign that confidence is returning to smaller companies.
For those investors that are willing to adopt a high risk strategy, opportunities to invest in AIM are presently abundant and those with existing holdings should take time to re-examine their fundamentals for buying the shares in the first place. There is little point in holding an investment for recovery if the reasons for investing in the first place no longer hold up. The opposite is also true and if the company has seen its share price fall dra-matically due to ‘flight for quality’, as people move to blue chip companies, and for no other reason it may be worth buying more shares and averaging down thus reducing the time it will take the holding to recover once the share price begins to move up.
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