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Don’t write-off AIM

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This had led many people to speculate that AIM has come to its natural end as a successful market for small, dynamic companies to gain a public presence and to raise funds for expansion. Is this the case, or is the current slow down in activity just a short term blip? It’s true to say that AIM has enjoyed remarkable growth since its inception 13 years ago, with both investors and companies making some significant gains during that period. However, confidence in the market has been significantly eroded in the past few months as the AIM index has fallen from 1,050 points at the start of 2008, down to 445 points. It’s inevitable that the first signs of decline will cause some investors and companies to panic.  One source of concern is the emergence of other rival markets. In recent years, other markets have been, or are now becoming, established in competition with AIM – both in Europe and in Australasia. These markets, however, have also been seriously affected by the economic downturn and their credentials are also being reviewed; the jury is still out on whether they are sustainable markets going forward. I believe AIM is too well-established to have serious concerns about losing out to other newly formed markets. The major advantages AIM has over these other markets is the track record of success, the relative ease of the whole IPO process and a sensible level of monitoring and regulation – these should not be ignored when looking for a successful market. The feeling among those of us who regularly deal with companies both on AIM and looking for an IPO is that this is merely a blip. There is still a positive outlook, borne out of the fact that enquiries into the process and the search for funds is still happening. It is simply a case of everyone exerting extra caution at the moment. The general consensus is that the current downturn in AIM will not last long and that activity will start to increase by Q2 2009. There is no reason to believe AIM can’t pick up its growth story from where it left off. Only time will tell whether Q2 2009 is too optimistic. But one thing is for sure: AIM will be back with a vengeance in the very near future.

*Ian Cliffe is a partner at haysmacintyre

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