The AIM All-Share Index managed to weather some challenging events this week, including an interest rate hike from the Bank of England and a surprise Fitch rating downgrade for US government debt. As a result, the FTSE 100 blue-chip index fell by nearly 2.5%. However, the internationally weighted Footsie is more vulnerable to macroeconomic risks compared to the junior market, so AIM’s decline of only 0.7% to 760.55 by Friday afternoon is relatively positive. Unfortunately, the year-to-date performance of the junior market has not been as stable.
In the capital markets update for the London Stock Exchange Group’s first half, it was confirmed that fundraising in Europe’s growth engine has significantly declined this year. Only £831 million was raised through initial public offerings and follow-on deals in the first six months, which is roughly a tenth of the amount raised during the same period in 2021 and on par with last year’s poor performance. Interestingly, venture capital trusts have raised more capital than AIM listings, reaching £1 billion in the first half of this year, making it the second-highest year of VCT fundraising on record. One standout VCT is Guinness VCT, which raised £3.75 million through its IPO on the premium segment.
Among the risers on AIM this week was Orcadian Energy, which saw its market value double to £3.8 million, despite the company stating that it was unaware of any specific reason for the increase. This could be seen as a vote of confidence for the micro-cap following the government’s vocal support for the UK offshore oil and gas industry, in which Orcadian is actively involved. North Sea stocks, in general, reacted positively to the prime minister and energy minister’s proposals for a new round of North Sea licensing, signaling a potential boost to the domestic energy supply and a reduction in reliance on hostile states.
In other sectors, Scirocco Energy, a Europe-focused transition energy investor, experienced a significant surge of 60% due to progress made in the sale of its Tanzania-based assets. Premier African Minerals also rallied by nearly 30%, while Karelian Diamond Resources jumped by 22% following the commencement of a nickel-copper-platinum group metal exploration program in Northern Ireland. On the downside, Wishbone Gold experienced a decline following a dilutive equity fundraiser. However, the exercise was successful and oversubscribed, raising £1.42 million, exceeding the initial fundraising target of £1 million. Indie video game publisher Devolver Digital also saw a dip of 33% due to delays in game releases and other factors affecting revenue.
Moving on to the risers again, Harland & Wolff Group, known for its historical significance in shipbuilding, saw its stock increase by 13% after securing a vessel refurbishment contract worth up to £70 million. This follows the group’s previous success with a Ministry of Defence contract win. Finally, XP Factory, an AIM-listed escape room and “battle bar,” reported a jump in turnover and earnings, leading to an increase in stock value. Despite concerns over the cost of living crisis and rising interest rates, July trading was notably strong and early indications for August are positive.
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