Too many companies are running for cover even though the AIM market has improved of late, according to PKF corporate finance partner Malcolm Cook.

AIM's slimming down has gathered pace - a reaction to a grim performance last year - despite more recently outperforming its mainstream rival.

"Encouragingly, AIM had a relatively strong first quarter of 2009, even though the recent gains only recover a small percentage of the losses made last year," said Mr Cook.

The FTSE AIM All Share index increased by 5.17 per cent over the three months to March 30. That compared with a 13 per cent decline in the FTSE All Share index over the same period.

The FTSE AIM 50 and FTSE AIM 100 indices also rose by around five per cent, while the FTSE 100 fell by slightly more than the FTSE All Share.

Mr Cook said: "It appears then that smaller companies are outperforming the larger ones, because the FTSE Fledgling index rose by 5.89 per cent in the first three months of 2009, which in turn is slightly more than AIM.

"This, however, still leaves AIM around three-fifths lower over the past 12 months.

The AIM All Share is 57 per cent lower than one year ago, while the AIM 50 has fallen by 62.9 per cent. The main indices for Official List companies are around one-third lower."

Recovery in gold shares during the period helped, due to AIM's bias towards mining.

Mr Cook said: "The rising gold price certainly put a fresh shine on gold miners and explorers. Also, some AIM companies which have been hit with sharp declines in their share prices over the past year are now starting to recover, which is also helping the index."

Nevertheless, the flight from AIM following 2008's nightmare is gathering pace.

Mr Cook said: "In March, AIM's net reduction of companies was the highest ever seen in one month - 36. The previous high was in December, a decline of 30.

"So far this year there has been a net reduction of 72 companies, a shrinkage which is certainly accelerating. In 2008, it took until September before company numbers were reduced by that much.

"Companies taking the decision to quit AIM make up the biggest group leaving in recent months. This is beginning to annoy many institutional and individual investors who are frequently left with no market to trade their shares."

Last November appears to have marked the low point for fund raisings on AIM.

The amount of cash forthcoming is still relatively low, but is growing.

Mr Cook said: "The November figure was £67.3 million, which was slightly lower than the previous month. Since then, £159.1 million was raised in December, £164.8 million in January and £197.2 million in February. These figures include cash raised by new issues and by existing AIM companies - the latter accounts for the vast majority of the money.

"This is really quite encouraging and I am sure AIM will bounce back though it could take a long while to return to previous levels."

Critics claim AIM has lost its focus on what was originally going to be its core business - a trading opportunity for small and fast-growing firms.