Despite recording its worst admissions performance in three years, the outlook remains positive for the UK’s junior stock market, analysts have claimed.
The record-breaking fundraising and admissions levels witnessed last year on AIM have not been matched in the first quarter of 2007, according to business advisers at Grant Thornton.
On the contrary, the market recorded 51 admissions in the first three months of 2007, while new funds raised have so far amounted to £1,017m.
In terms of admission levels, quarter one of 2007 ranks as the worst performance in three years and represents a drop of over 50% compared to this time last year, Grant Thornton claimed.
Likewise, In terms of fundraising levels, while raising over £1bn in three months remains a respectable result, it represents the worst performance in two years and a 44% reduction last year, the advisers added.
However, Grant Thornton argued that the significant slowdown is no cause for concern and the outlook for the market remains healthy.
“AIM’s success in recent years has got the City accustomed to record upon record and while this latest quarter’s slowdown appears brusque, the pipeline of deals remains healthy with the next few weeks and months expected to deliver a performance more in line with AIM’s usual standards”, said Philip Secrett, a partner at Grant Thornton Corporate Finance.
“The first quarter of the year always takes a while to get going. January and February have historically been quieter with most admissions completed in the pre-Christmas rush.
“This year's performance owes much to a quieter March, which was affected by the ripple effects of the Asian markets tumble earlier in the month. Most companies on the brink of flotation then will have been wise to delay admission a few weeks, setting the expectation for a far busier April."
© Crimson Business Ltd. 2007
