IF CURRENT TRENDS continue we will wait a long time to see a substantial rise in IPOs, fundraisings and general corporate activity.
But AIM could be starting to see a growth spell after a period of clear-out. The number of UK companies on AIM has fallen from a high of 1,347 to 870 at the end of 2012. Many of the departing companies had a market capitalisation below £10m.
This creates space for better structured and better capitalised companies to join; ones which are more suitable to be a public company.
With Nomad numbers falling from over 80 in 2007 to just over 50 now, perhaps we are seeing a concentration of better financed and more competent advisers.
I am hearing advisers and fund managers saying that we are already 18 months into a seven-year bull market for small and mid-caps. If these words start turning into positive actions, by investors, companies and advisers, then this will further help to accelerate the recent turning point where, for the first time in 20 years, net new money is being allocated to small and mid-cap investment. If we can foster the flotation of more technology companies, such as the AIM growth company WANdisco, this will send a strong message to other sectors
Even more money could start to flow into the small and mid-size quoted company space through the inclusion of AIM shares into ISAs. The government will be shortly consulting on this.
This regeneration of AIM could be a fantastic opportunity to provide more finance to growing companies so that they can continue to expand their business and create more jobs.
For me I’m sensing zoom rather than gloom.
Tim Ward is chief executive of the Quoted Companies Alliance, the independent membership organisation that champions the interests of small to mid-size quoted companies. His past roles have included head of issuer services and head of marketing at the London Stock Exchange and finance director at FTSE, the index company.
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