Thursday 2 April 2009

Baker Tilly is Taking AIM

Baker Tilly's recent Taking AIM survey gave some encouraging statistics on the AIM market.

Although much reduced, AIM’s IPO and transaction total in 2008 outpaced almost all other growth markets as well as the main London market, and is only two IPOs behind the much larger NASDAQ.

AIM’s global reach was undiminished with three quarters of IPOs coming from overseas.

Secondary issues remain a key strength for the market with £3.2bn of further equity funding completed in 2008.

A minimum fund raising for IPOs is felt to be a better regulatory change than a minimum market cap specification due to fluctuations.

Recovery will be preceded by that of the larger caps. But stock picking those that will survive and benefit from disappearing competition on AIM will be the major incentive for investors.

The most popular benefits for an AIM listing were:
1. access to capital, profile, credibility
2. liquidity
3. facilitation of acquisitions
4. facilitation of exit for investors
5. tax breaks and incentives

  • 72% of AIM companies have implemented cost cutting measures.

  • More than half of investors reduced the proportion of funds invested in AIM stocks.

  • 40% of investors believe the reduction in IPOs has increased the quality of the market.

  • 65% of investors put a higher proportion of funds into secondary issues in ‘08 than ‘07 reflecting the continuing support for good AIM companies.

  • 69% of companies and 67% of investors expect AIM to recover from the downturn in 2010.

  • 82% of investors consider UK companies to be a more secure investment than their overseas counterparts.

  • 51% of investors expect the IPO rate to level off at 100-150/ year.

The most important criteria for investment were:
1. good track record
2. good business plan
3. good management
4. strong balance sheet
5. realistic valuation

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