London’s junior market AIM is establishing itself as the exchange of choice for larger cap companies, according to new analysis published today.
Accountancy group UHY Hacker Young said” “improvement in the overall quality of companies on AIM, partly achieved through more stringent quality control, is making AIM the stock market of choice for larger cap companies.”
The claim is based on fresh research showing just four companies left the junior market due to financial distress over the last year, despite the Covid crisis hitting firms’ income and swelling their stock of debt.
Companies on the junior market have withstood the economic decline triggered by the arrival of Covid better than the damage caused by the financial crisis, the analysis shows.
In 2009/10, the immediate aftermath of the financial crisis, 66 companies left the market due to financial distress.
Daniel Hutson, partner and head of audit at UHY Hacker Young, said: “AIM companies have also coped far better with the COVID crisis than the financial crisis. Insolvencies of AIM companies have been very rare, further enhancing the reputation of the market.”
“AIM is now a much more robust market than it was in the last recession – it has better companies, better regulation and a better orientation towards growth sectors like technology.”
UHY Hacker Young’s figures also showed the AIM market grew for the first time since the third quarter of 2017, rising by a net five companies in the second quarter of this year.