WORRIES over the Eurozone crisis have made investors increasingly cautious, pushing up the cost of listing a company on AIM and reducing the funds raised, a new study revealed today.
Including listing fees and broker charges, the cost of listing hit 10.6 per cent of all funds raised in 2011, up from 7.3 per cent in 2010 – the biggest jump in costs in five years, according to research from UHY Hacker Young.
New listings on Aim raised £518m last year – down 46 per cent on £959m in 2010, as investors looked to put their cash into less risky assets.
“Capital markets worldwide are still reeling from the global flight from risk and AIM is no exception,” said UHY Hacker Young’s Laurence Sacker. “Many companies have reportedly struggled to raise funds through the markets as external factors have caused investors to shy away from equities in favour of more traditional assets.”
As a result, costs have risen as a proportion of total funds raised.
“The sheer fact that companies are still coming to list on Aim is a testament to the confidence investors have in Aim’s long term stability,” said Sacker. “Aim will need to repay this confidence down the line, by bouncing back strongly from the economic slowdown.”