Brexit uncertainty dragged the total funds raised on AIM down by 33% in 2019, but analysts say the election has lifted market activity.
Broker Allenby observed that smaller firms are leaving the market to larger ones in a long-awaited “cleansing process”.
As of December, the average AIM market capitalisation was £121mln, almost double 2016’s figure.
While valuations might be rising, London’s small caps raised just £3.9bn in 2019, the lowest amount in seven years, Allenby’s survey revealed.
“It was the dearth of initial public offerings which weighed on the overall fundraising totals,” it explained.
“Amidst the well documented backdrop of Brexit concern, political turmoil and general election uncertainty there were only 22 new joiners to AIM in 2019.”
Looking at AIM’s performance over the last week, the performance of the UK’s growth stocks was more resilient than their blue-chip counterparts.
The AIM All-Share dipped 1% to 952, while the FTSE 100 lost 3% to 7,365.
One of the standout underperformers was Tissue Regenix, dropping 16% to 1p as it had to temporarily close its manufacturing plant in Texas due to a cybersecurity breach.
The regenerative medical devices group said forensic cybersecurity experts are investigating, but believes the incident did not hit UK operations.
Another alert came from Haydale Graphene, down 13% to 1.4p, as its US division reported lower sales of ceramic cutting tools.
In December, the advertising agency saw a boardroom exodus including co-founder Lord Saatchi in the wake of accounting problems.
Fertiliser producer Salt Lake Potash lost 6% to 36p after it said full funding for its Lake Way project in Western Australia will take “months”.
Sticking with the sector, Georgian Mining Corp (LON:GEO) had a better week. It shares skyrocketed 96% to 1.6p after receiving confirmation of tenure for two key deposits in the Bolnisi Project licence area.
Back home, Journeo PLC (LON:JNEO) jumped 8% to 62p after it received the first tranche of purchase orders under a £4.8mln contract to supply software systems at Edinburgh’s bus station.
Meanwhile, architecture and interior design specialist Aukett Swanke (LON:AUK) shot up 15% to 2.3p after swinging to profit in its last financial year.
Finally, lettings agency Belvoir Group PLC (LON:BLV) climbed 7% to 162p as it boasted profits in 2019 will be ‘comfortably ahead’ of expectations after higher revenues despite Brexit drama and the tenant fee ban.