Share sell-off by directors sparks fear of downturn on AIM

Directors of companies on AIM, the London Stock Exchange's fast-growing junior market, went on a selling spree in the first three months of this year, offloading shares worth £43m.

Directors of companies on AIM, the London Stock Exchange's fast-growing junior market, went on a selling spree in the first three months of this year, offloading shares worth £43m.

The executives were cashing in on a strong bull run in the value of AIM shares, with the market as a whole hitting a 12-month high in early March. However, since then the market has fallen by 6.5 per cent.

Research by DigitalLook.com, the financial information and news website, has found there were 106 separate share sales by AIM-quoted directors in the first three months of the year, which is an increase of almost a third compared to the same period last year. Directors bought less than £9.3m of shares, bring their net sales to £34.5m.

DigitalLook pointed to Paul Wright and Valerie Kay, directors of Ideal Shopping Direct, who sold a combined 4.5m shares at the beginning of March worth more than £10m.

Robert Holt, director of house maintenance company Mears Group, sold shares worth £4.8m in January. Meanwhile, Stephen and Sarah Jane Thomson, the husband and wife joint chief executives at Thomson Intermedia cashed-in 1.6 million shares at 220p-a-share making a combined total of £3.52m.

Andrew Yates, at DigitalLook said: "The AIMhas had a great ride, but the rush of director selling could raise concerns from investors that the bubble might burst." In March alone 64 companies floated on AIM, bringing the total number of companies quoted on the more lightly regulated market to 1,100 since it was created 10 years ago.

AIM has proved highly successful at attracting foreign companies to float in London.

It has grown rapidly, while the more senior, main market has struggled to attract companies in the wake of the telecoms and technology crash.

Officials from AIM have visited China and India to encourage companies to choose London rather than markets such as Nasdaq for their floats.