AIM news

AIM sunk to a historic low this month as confidence evaporated and investor risk-aversion multiplied. Falling by almost a third during October to a low of 422.69, the market is now trading below its previous nadir following the bursting of the dot.com bubble.

Only three companies in the AIM All-Share Index are capitalised at over £500 million now, with largest constituent Sibir Energy declining by a further 37 per cent during the month. Bucking the trend was niche insurer Lancashire, which actually rose 6.5 per cent for a market cap of £565 million.

The largest faller was asset-based lender Davenham, which shed 89.9 per cent of its value after admitting bad debts were rising. In response, it has curtailed new business in its property division and is slashing staff numbers.

Housebuilder and property developer Eatonfield subsided 85.6 per cent after a stark warning to investors that profits will be below expectations and that, because of difficulty in securing bank funding, chief executive Rob Lloyd is having to loan the group £750,000 in return for a share of profits in two projects.

Elsewhere, bombed-out Zenith Hygiene received a takeover approach at 12p – some distance from its £1 float price in 2005, but above last month’s low of 5.59p.