Partner Article

AIM Listed companies show unexpected increase

New research has shown that the number of AIM listed companies is set to increase for the first time since 2007 during the first half of 2012, indicating that the shake out of the market is nearing completion.

Between 2007 and 2011 numbers of companies on the AIM have fallen from 1,694 to 1,150, while listed companies have left the market in droves. Last month however, the total number of de-listings was was just 131, a fall of 55% with the peak recorded in 2009 when 293 companies were de-listed.

Rob Seldon, capital markets partner at Deloitte North East commented: “By its very nature AIM is a dynamic market. The classic AIM strategy for a company is to join during an expansion phase, use AIM to build profile and access growth capital, and then depart either to a premium listing or potentially be taken over by a larger player in the same industry.

“The consequence of this dynamism is that over the medium term the constituent members of the market can churn quite significantly.

“From another angle, if you compare the top 50 capitalised companies on AIM at 31 December 2007 only 9 remain in the top 50 at 30 November 2011 – it is a substantially changed population.”

This move also indicates a change in AIM listings, which have previously been criticised for listing companies of dubious quality.

Mr Seldon added: “The AIM markets return to growth will stimulate a more positive outlook for investors in small cap high growth companies.

“2012 is set to be an exciting year for followers of the AIM market.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .