Aim fundraising strong despite credit crunch
Nov 14 2007 by Iain Laing, The Journal
THE growth of fundraising on the “junior” AIM stock market has continued to be strong despite the credit crunch, according to new figures.
The Alternative Investment Market saw continued strong performance in the third quarter after its healthy second quarter, says business advisory firm Deloitte.
Performance was particularly strong in July and August for fundraising on AIM; however September, traditionally one of the quietest months of the year, produced the lowest fundraising since 2005, at £230m.
John Charlton, partner at Deloitte in Newcastle, said: “The impact of the global stock market turmoil has affected all the stock exchanges for the month of September. However, to this point the AIM market continued to demonstrate strong growth year on year as shown by the total amount of fund- raising on AIM in Q3, which has increased by 45% at £3.3bn compared to the same time last year.
“Underlying these strong fundraising statistics is a shift in the mix of fundraising with secondary fundraising representing £1.6bn or almost half of the total, compared to £0.5bn in Q3 2006, as institutions have shifted their focus somewhat, from new equity to investing further into existing successful AIM companies.”
The research also found the third quarter saw more companies come to AIM of market capitalisation less than £10m, than greater than £10m (49 versus 30) which reverses the trend over the last 12 months of fewer but larger companies coming to the market
And it found the market cap of international companies coming to AIM this year has been lower than that experienced in 2006. In Q3 2007 the combined market cap of international companies was £0.9bn compared with £3.4bn in Q3 2006.
The AIM All Share Index has continued to increase in Q3 and is at 1,230 at the end of September, 5% from the previous quarter and 23% in the year to date
Mr Charlton said: “Despite the concerns, AIM continues to post impressive results. While the current market turmoil has undoubtedly delayed a number of transactions as well as causing some companies coming to market to scale back their fundraising ambitions, the results show that for high quality companies the markets remain open for both primary and secondary issues.
“Q4 is unlikely to see the record levels of fundraising seen in 2006, but will be an important pointer as to how we expect AIM to develop in 2008 as current market concerns continue to persist.”
