AIM to bottom out in 2010
The Alternative Investment Market is set to bottom out in the second half of 2010 with just 1,200 listed firms, according to research from Deloitte.
The junior market has suffered 30 consecutive months of falling figures from a peak of 1,694 companies in December 2007.
However, experts at Deloitte predict that after hitting the 1,200 mark later this year, AIM activity levels will find their footing again and pick up the pace in 2011 as confidence levels on the part of both companies and investors improve.
Richard Thornhill, capital markets director at Deloitte, says: "Trends in recent activity suggest that only once the total number of companies reaches the 1,200 mark will the numbers of companies listing and level of activity rebound and begin to increase again."
There has been a steady increase in the levels of activity in recent months. In the second quarter of the year, 18 new companies listed on AIM, compared with just eight in the same period last year.
This was an increase from the 16 listing in the first quarter of the year.
Thornhill adds: "This has coincided with the rate of companies leaving the market slowing in recent times, meaning that we may shortly see an end to the long decline in the number of listed companies on AIM."
On Friday, new banking business NBNK became the latest firm to make its debut on AIM, issuing more than 50 million shares at 100p each.
It is planning to use the £50 million raised to open as many as 600 branches in the UK and plans on providing current accounts and savings products.
This could give it as much as 6% of the banking market.
Chairman Lord Levene says: "Admission [to AIM] marks the completion of the first stage of our plans. We will now establish a dialogue with a number of sellers of assets which would fit our acquisition profile."
Alternative Investment Market
AIM is the London Stock Exchange’s international market for smaller companies. Since its launch in 1995, 2,200 companies have raised almost £24 billion listing on AIM. The market has a more flexible regulatory system than the main market and can offer tax advantages to investors but its constituents are a riskier investment than bigger companies listed on the main market.