Investors brace for increased trading as AIM stocks become exempt from stamp duty next week
Investors hoping for increased trading volumes in the out-of-favour junior market could be in for a treat next week.
From April 28, the Alternative Investment Market will become exempt from stamp duty and investors will no longer have to pay the 0.5 per cent fee when they buy AIM stocks.
It is all part of the government’s drive to attract institutional and retail investors to the growth market, which will make it cheaper and easier for companies to tap the market for cash.
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AIM: From Monday shares in the Alternative Investment Market (AIM) become exempt from stamp duty, meaning investors no longer have to pay the 0.5 per cent fee when they buy AIM stocks
Traders are expecting the stamp duty abolition to have a similar effect as the inclusion of junior shares in ISAs had on AIM in August.
It will be a timely boost for the market, which has suffered lower volumes since that injection of life into the market.
Having said that, £1.15billion was raised in March, the largest amount since December 2010, thanks mostly to some big name IPOs, such as online fashion retailer boohoo.com, which raised £300million, and Ireland’s biggest hotel operator Dalata Hotel Group, which raised £221million.
Other new listings included Venture Life Group, behind healthcare products for ageing customers, and New Zealand oil explorer Mosman Oil & Gas. The latter’s shares enjoyed a 25 per cent rise this week.
More than double the monthly average over the past two years was raised in March through secondary fundraisings by companies already on the market.
The figures from Allenby Capital however show that this is still some way off the highs seen before the financial crash in 2008.
The FTSE AIM 100 fell 50-odd points over the shortened trading week to 3,647. The biggest AIM shares have now fallen 6 per cent so far this year, which is a much heavier fall than the 1 per cent experienced by the blue chip FTSE 100.
That decline was exacerbated by small-cap heavyweight Quindell, which slumped after a note from Gotham City Research.
It prompted the insurance outsourcing group into a quick response in which it slammed the accusations.
It has now launched legal action against those responsible for shorting the stock.
Sound Oil jumped 1.4p to 7.2p after a £14 million cash injection from Italy’s Continental Investment Partners, which has taken a 23 per cent stake in the AIM-listed gas field developer.
It agreed to subscribe for shares at an average price of 9p, post a warrant exercise - a near-70 per cent premium to Thursday’s closing share price.
The cash will be used to fund Sound’s drill programme for the next year, including the Nervesa and Badile discoveries.
Shale gas explorer IGas Energy fired up 11p to 134p following a report that the nascent industry in Britain is a £33billion opportunity.
Up to 4,000 horizontal wells could be drilled in the UK over the next 18 years, according to the research from the UK Onshore Operators Group alongside accountancy group Ernst & Young.
Bahamas Petroleum shares doubled over the week to 3.6p after a bullish update that hinted at a potential farm-out deal round the corner.
Meanwhile, Tethys Petroleum enjoyed a 2p rise to 29p after completing its third successful gas well of the year in Kazakhstan.
Landore Resources watched its shares rise to 3.2p after the latest batch of data from its Junior Lake project in Ontario highlighted the potential of the nickel and copper deposit.
Bullabulling Gold added 0.6p to 4.2p after turning down a takeover offer from rival Aussie miner Norton Gold Fields.
Norton offered 7 cents cash per share, which the Bullabulling board said does not adequately reflect either the value of the company or its gold project.
Iofina shares mounted a slight recovery towards the end of the week after warning that profits would suffer because of a supply shortage problem.
The US-based company cautioned that its main customer is using more brine in a fracking campaign, which will leave less for Iofina to convert into iodine.
The shares dropped from 66p to 39p this week.
Haydale Graphene Industries, which claims to have found a way to commercialise the so-called ‘miracle material’, tanked 40p to 140p.
The group, which placed shares at 210p two weeks ago, is reportedly considering suing broker Hume Capital for abandoning market making activity on the day of its float.
The reports triggered a 30 per cent fall from AIM-listed Hume’s shares. |
