Zak Mir gave Spreadbet Magazine readers some interesting insights into a few AIM stocks this week, in particular Gulf Keystone Petroluem which looks to me as if it might well drop below the key 172p support level rather than start a new breakout - with a court case over the ownership rights to the fields hanging over it then it is not surprising there is nervousness around the stock.
But what of the AIM market as a whole with Chancellor announcing the
abolition of stamp duty on trading in AIM shares and so making them even
more attractive to retail investors? We would have expected this to
give a big boost to the market yet instead we lie the index largely
flatlined throughout the week and ended with a dip below the 750 level
that it nosed through to the upside during February and March. Indeed,
it is heading towards a critical point in the next week - just a couple
more percent to the downside and it will have given up the gains for
this year in contrast to the FTSE 100 and FTSE 250 which are still ahead
materially as shown in the chart below.
The AIM index is of course heavily weighted to the likes of GKP and
other oiliess, and this sector has continued to underperform for the
second year in a row with continued disastrous drill results by many
stocks such as Chariot Oil. Even the likes of Rockhopper with proven
reserves and a path to market have struggled to show positive returns.
AIM looks very likely to be in for yet another rocky ride this year…
Cityunslicker’s own favourite EMED Mining has suffered another delay
too in its quest for permitting of the comapny’s copper mine in Spain
and has dropped nearly 10% in a week.
So, overall, we are left with another “interesting” week ahead with
the desperate situation in Cyprus likely to affect near term
A fudge and stability looks to be the most likely
outcome and if you look back at the history of the Eurozone from 2009 to
now, fudge after fudge seems to be the common theme. Mhy guess is that a
deal will be done over the weekend to try and calm the markets for a
Monday. If Cyprus gets even more messy then we can expect a sharp drop
in the index – yet another downhill rollercoaster as happened during the
last 2 summers… A most unwelcome environment for AIM investors given
their incremental volatility. Volatility that for a number of years now,
investors have not been compensated for relative to their larger cap
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