Small companies should not list on AIM and existing ones should be encouraged to migrate to other markets such as PLUS, according to the majority of the market’s participants.
A survey of AIM advisers and companies found that many believe that the sheer number of firms listed on the market is to the detriment of liquidity and makes it harder to raise a business’ profile.
The survey, conducted by accountancy firm Mazars, found that 52% of companies and 56% of advisers think that smaller companies should leave the market and trade elsewhere, possibly on AIM’s rival PLUS.
Currently AIM has over 1600 companies listed on it and its illiquidity is being compounded by the economic downturn. Advisers are concerned that some businesses have and are looking at de-listing rather than paying the costs of remaining on the market.
Mazars is suggesting that some of AIM’s problems could be solved by attracting fewer but larger companies, and also with rules changes such as a minimum limit for free floating shares upon admission and by migrating inactive companies to a bulletin board listing.
Robin Stevens, a corporate finance partner at Mazars, said that this year would be a quiet one for investors but it was a good time to prepare for the future.
“No-one is expecting 2009 to bring a large number of companies to the market,” he said.
“However, it does provide an opportunity for the UK capital markets, AIM, the Main Market and PLUS to position themselves to attract aspiring high quality UK and international companies when confidence and investors return.”
© Crimson Business Ltd. 2009