AIM listed firms with Chinese operations buck market trends
ALTERNATIVE Investment Market (AIM) listed companies with significant operations in China are outperforming both the FTSE 100 and the AIM ALL-SHARE indices in 2009, according to Grant Thornton.
Share prices in Grant Thornton’s AIM China Index have jumped 42% since the beginning of the year, compared to a rise of 39% for the AIM ALL-SHARE and a rise of only 6% in the FTSE 100.
While the AIM China Index is trading 37% below 2008 and 36% below 2007, it still compares favourably to the AIM ALL-SHARE, which has fallen 48% since 2008 and 48% since 2007.
The FTSE 100 suffered smaller losses than both AIM indices, dropping 27% since 2008 and trading 25% below 2007.
Matthew Stroh, senior manager at Grant Thornton’s Leeds office, said: “Chinese companies quoted on AIM have defied negative headlines in recent months with Grant Thornton’s China Index outperforming the AIM ALL-SHARE.
“The success of AIM-quoted Chinese companies is perhaps surprising but can partly be attributed to market makers reacting to the recent surge in valuations on Chinese stock markets.”
He added that although many of the 52 companies in the AIM China Index show great potential, only 26 have generated profits in their latest results.
“But as Chinese stock markets have launched the world’s largest public offerings so far this year, enthusiasm for Chinese stocks is spilling over to the AIM China Index,” Mr Stroh added.
“AIM provides young Chinese growth companies with an unrivalled platform to raise capital via initial public offering. We therefore expect to see a number of Chinese firms looking to list on AIM in the coming months, providing market conditions for IPOs improve.”
