AIM declines as market slump hits small firms

Tim Wallace
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THE ALTERNATIVE Investment Market (AIM) shrank last month, with more firms leaving the index than joining, according to analysis published today by Allenby Capital.

Seven firms listed on the market in September, while 10 left, leaving the size of AIM at 1,106 at the end of the month.

And only one of those companies left because it was taken over, indicating another month of low merger and acquisition activity.

Secondary placings slumped in the month, falling to £59.2m compared with a 2012 monthly average of £175m.

However there were still some positive moves.

AIM saw its largest initial public offering in almost three years, in the form of Eland Oil and Gas.

The Nigerian firm’s listing raised £118 in the biggest IPO since December 2009.

That drove overall funds raised on the market to £168m, an eight-fold increase on the £18.7m raised in August.

Overall primary and secondary listings came to £227m, up 2.9 per cent on the same month of 2011.

However, the year-to-date total of £2.01bn remains 42.3 per cent down on the year.

AIM is part of the London Stock Exchange, and allows smaller firms to raise capital on the equities markets.

But although the idea is that fast-growing companies will be able to raise funds to expand, the gloomy outlook from Allenby Capital indicates AIM-listed firms are struggling as much as larger companies listed elsewhere.

The merger and acquisition market as a whole has been relatively subdued this year – Dealogic data published on Friday showed global activity in the year to date down 10.8 per cent on the year by deal volume and 12.9 per cent by value.