Aim bounces back despite Brexit fears with number of companies joining rising

 
Shruti Tripathi Chopra
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The number of companies joining the London Stock Exchange's junior market has risen five per cent in the last 12 months (Source: Getty)

The Alternative Investment Market (Aim) has improved over the last 12 months despite Brexit-related worries, according to a new report by accountancy firm UHY Hacker Young.

The number of companies joining the London Stock Exchange's junior market has risen five per cent in the last 12 months from 38 to 40, while the money raised in IPOs on Aim has jumped from £753m to over £919m.

Meanwhile, the number of companies leaving Aim has dropped by 16 per cent in the last 12 months, falling from 105 in 2015/16 to 88 in 2016/17. Businesses that exited Aim in the last year included film studio Pinewood, which delisted in October after PW Real Estate Fund III acquired the firm.

The study pointed that investors' growth appetite hasn't been diminished by the Brexit vote. Nearly a quarter of new listings on Aim in the last 12 months came from the oil and gas sector.

Read more: This Aim-listed company's profits and revenues have risen over 100 per cent

Laurence Sacker, managing partner at UHY Hacker Young, said: “Trends such as commodity prices or growth in tech valuations is more of an influence on Aim than what is happening at the small companies end of the UK economy - that gives it protection from the worst of Brexit volatility.

​“The number of new listings, as well as the drop in the number of companies exiting Aim, shows London’s junior market is robust.

“The market is still a way off its strong performance on capital raising of a few years ago – but it is clear that Brexit related fears have not caused any major setbacks for Aim.”

Read more: London Stock Exchange expects the EU to block its £21bn mega-merger with Deutsche Boerse

The junior market's position was also bolstered by the London Stock Exchange and Deutsche Borse merger being blocked.

Sacker said: “The end of the LSE Deutsche Boerse deal lifts a cloud off the market as a whole, and Aim market participants can feel more secure in its future.”

“Future Brexit negotiations may have an impact on the market, but increasing the number of overseas IPOs on Aim will soften that.”

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