As regular readers will know we often feature companies in sharewatch that are on the AIM market.

The market has dropped a long way since the credit crunch first began to bite, although there are now some encouraging signs that suggest we may be either at or very close to the bottom.

Since it was launched in 1995 with just ten companies, AIM has grown significantly with some 1,700 now being quoted on the market at its peak towards the end of 2007.

More recently, the number of companies listed on AIM has fallen largely due to a death of new issues, whilst other companies have either moved up to obtain a full Stock Exchange Listing or have left the market for varying reasons.

At the time of launch the FTSE AIM All Share Index stood at 1,000 and this ran up to a peak of over 2,800 in 2000 when the tech-boom was at its height.

With the collapse of the dotcom era, the index fell back to around 550 in 2003, when the main market hit its decade low just prior to the war with Iraq. After that, the Index enjoyed pretty steady growth until the credit crunch kicked in during the summer of 2008.

In May 2008 it stood at 1,000 before falling to its current level of around 400. What is interesting though is that since the index dropped back to the 400 level last November, it has consolidated and not fallen a great deal further. Although there is little sign of the AIM market rallying in the very short term, there are some encouraging signs in general.

For much of the second half of last year share prices reacted negatively to almost any corporate news, no matter how good, but more recently good news has been rewarded with an increase in the share price. Add to that the fact that even in the latest market sell off the FTSE AIM All Share Index has held up at around 375 and it just may be that we are at the bottom of the market for AIM stocks. Investors stock picking from AIM could be significantly rewarded when the market turns round, as there are a number of companies that look very good value at these levels.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.