Nick Goodway: AIM tax breaks can be significant for investors

Funny foreign mineral hunters and weird Israeli tech boffins also have their place on the market

It began with a whimper, not a bang, but last week's change in the law to allow investors to put Alternative Investment Market (AIM) shares into Individual Savings Accounts (ISAs) is significant.

Official data from the London Stock Exchange which runs AIM was that share trading volumes were pretty much the same as in any normal week.

But the anecdotal evidence is slightly different.

Far more AIM companies than usual had to issue a disclaimer saying that they knew of no reason for a sudden sharp spurt in their share price. And stockbrokers specialising in smaller cap stocks and retail investors saw a distinct rise in interest in AIM shares.

Experienced investors with existing AIM portfolios have switched them into the ISA wraps.

Not surprisingly, the greatest interest was in ASOS, the online fashion retailer, which – if it weren't on AIM – would actually be in the FTSE 100. It's not a typical AIM company in that it is now a proven solid business, unlikely to go bust and a strong candidate for a takeover in the future. Oh, and its shares have trebled in value in the last 12 months. Not a hard choice when it comes to your ISA.

But the other stocks which attracted attention were a much more mixed bag. As usual, obscure overseas mining stocks topped the list, but there was solid demand for UK companies, ranging from Judges Scientific to Iofina.

The FTSE AIM Index ended the week up almost 2 per cent.

The newest entrant to the market, Science in Sport, which makes nutritional products for athletes including their brand ambassador Sir Chris Hoy, pictured, debuted on Friday with its share price rising from 56p to 60p.

Those who successfully argued for AIM stocks to be allowed in ISAs and, indeed, the abolition of stamp duty on AIM shares which comes in next April, highlighted the importance of the junior market in growing young UK companies and creating British jobs.

That is true up to a point but those funny foreign mineral hunters and weird Israeli technology boffins also have their place on the market.

Research from Equity Development suggests that the ISA move followed by the stamp duty abolition could have a significant impact on AIM.

The entire market capitalisation of AIM is just £53bn. The entire amount we hold in so-called Stocks and Shares ISAs is £200m. If just 1 per cent of that money were be invested in AIM stocks, that could have a material impact on AIM share prices – which in any case tend to be far more volatile than those on the main market.

Certainly AIM needs a boost. Over the past two years the FTSE AIM Index is largely unchanged, while the FTSE All Share has risen 29 per cent and the FTSE SmallCap has put on impressive 37 per cent.

The Government lobbied the London Stock Exchange and others and has done the right thing in giving tax breaks to AIM investors. But they can only lead these horses to water. It is up to retail brokers and IFAs to encourage them to drink.

Ladbrokes bring up rear again

What is it about Ladbrokes? On the face of it, it suffers the same challenges as its arch-rival William Hill; hard going means fewer horses run, which means more favourites win; hot weather means fewer people visit bookies shops and Stoke City avoid relegation for the fifth successive season.

But somehow Ladbrokes seems to manage to come in not just a head, not just a length but a full six lengths behind Hills every time.

Richard Glynn has been in the saddle as Ladbrokes chief excecutive for almost three and a half years now.

He frankly admits that he is probably some four years behind Hills when it comes to digital betting but claims the deal he has set up with Playtech will recover a lot of lost ground. Shareholders are becoming impatient.

I'm wondering what price Hills might offer me that he is still there in a year's time.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
science
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
News
Comedian Ted Robbins collapsed on stage during a performance of Phoenix Nights Live at Manchester Arena (Rex)
people
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links