The return of AIM in 2010
After months in the doldrums, AIM is slowly emerging again to stake its claim as the world’s most successful growth market.
The new issues market, which had been decimated over recent months is starting to see renewed activity with a string of new companies lined up ready to join the market and raise capital to fuel growth.
Throughout the whole of 2009 only 36 new companies joined the market, the lowest number on record. However, AIM’s new issues market had actually been in decline since 2006. In 2007 the number of new issues in the year fell to 284 considerably down on the number in the previous year, and by 2008 the number had dropped again to 114.
The second quarter of 2010 has opened a degree of optimism in the new issues market, although Brokers and investors remain cautious about AIM returning to the dizzy heights of 2005, when more than 10 new companies a week were joining the market.
The private equity tycoon John Moulton, for many years Head of Alchemy Partners, successfully floated his new investment company Better Capital in December 2009. This was seen by many market commentators as a huge vote of confidence in the future of AIM.
March saw at least 9 new companies joining AIM which is perhaps the most visible sign that AIM’s new issues market is ready to make a return in 2010. By the close of the year we expect to see around 70 significant floats for this year.
Whilst the new issues market has undergone the most challenging times in AIM’s 15 year history over the past three years, the further issues market has continued to flourish even throughout the darkest days of the recession. Last year was the third most successful year on record for AIM companies on the market. Further fundraisings raised over £4.7b which helped to repair AIM company balance sheets and support business growth.
Many AIM investors have also started to see an increase in AIM’s value. At the beginning of January 2009 the FTSE AIM All share index had fallen to 394.32, however, by the end of the year it had recovered to 640.56 a rise of over 60% in 12 months.
Comment by John Holland - HBCG