Sharp drop in number of businesses trading on AIM
Worst year for delistings in AIM's history with 105 companies having delisted in the past 12 months - IPOs are also at lowest level since the recession
The past year has been a “difficult one” for the Alternative Investment Market (AIM) with an 18% increase in the number of businesses quitting the market since March 2015, new research from UHY Hacker Young has reported.
According to the findings, 105 companies have delisted from AIM over the past year while only 35 companies have floated (a 55% dip on the previous year); giving a net loss of 70 companies.
This is a marked drop on previous delistings for London’s junior stock exchange. In 2014 to 2015, there was a net decrease of 12 companies while in 2013 to 2014 there was a net decrease of just three companies.
What’s more, the amount of funds raised for initial public offerings (IPOs) has also fallen to £624m – a decrease of 53% from 2014 to 2015.
Of those companies delisting from AIM in the past 12 months, over a quarter (28%) were found to be in the mining, oil and gas industries.
On the reasons for AIM having suffered its “worst year of delistings in its history”, Laurence Sacker, partner of UHY Hacker Young, said:
“The resolutely low oil price, the continuing slack Chinese demand for commodities and the lower-risk approach taken by NOMADs have combined to make the past year a very difficult one indeed for AIM.
“There doesn’t appear to be any immediate respite on the horizon for any of those issues, which suggests that the coming year may not deliver the upturn AIM companies are hoping for.”