AIM listings holding firm
despite economic turmoil

THE number of listings on the Alternative Investment Market (AIM) have held firm despite the tough economic environment, according to new research.

The number of companies listing on AIM, increased by 43 per cent in the second quarter of 2012, according to analysis by Deloitte, the professional services firm. Twenty companies listed between April and June, raising £154.9m, compared with the £55.5m raised by 14 companies between January to March.

However, this is still lower than the same period last year when 25 companies raised £191.1m. The largest listing in the second quarter was by Enteq Upstream, a provider of products and technologies to the upstream oil and gas industry.

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The company raised £42m on admission, joining the list with a market capitalisation of £69m.

Rob Seldon, merger and acquisitions partner at Deloitte in Leeds, said: “The long-standing trend of declining numbers of companies on AIM continues, and there are five fewer companies in total on the market at the end of June (1,113) compared with the position in March.

“This does however represent a considerably lower rate of 
attrition than the average seen over the past two years – time 
will tell as to whether this signals the long hoped for stabilisation of the number of companies on the list.

“You might expect AIM listings to have dried up completely in the current economic climate, but in fact, activity has been surprisingly robust.”

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There was significant activity in the pharmaceutical sector, including a transfer from the main market by Cambridge-based Vernalis, which specialise in oncological and central nervous system pharmaceutical research.

The other two admissions in this sector were the £15m placing by Retroscreen Virology and the introduction to the market for Eden Research.

Mr Seldon said: “As well as being a positive sign for this industry sector, it is also notable that all three companies are UK-based, giving a boost to those looking 
for evidence to support optimism for UK plc’s small and mid-cap space.

“It should come as no great surprise, given the instability surrounding the eurozone in the quarter, that the overall market capital of AIM dropped during the second quarter from £68bn at the end of Q1 (quarter one) to £64bn, a decline of six per cent.

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“This movement is consistent with the five per cent fall of the FTSE All-Small index over Q2, indicating that the decline in value is not specific to AIM.

“While the suppression of 
market capital appears to be 
associated with wider macro economic factors, the increased 
fundraising on AIM in Q2 2012 may be counterintuitive, but 
is certainly an encouraging 
sign.”

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