Eurozone crisis puts squeeze on AIM listings

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The Independent Online

The eurozone crisis has heaped pressure on the junior AIM stock market, with 24 companies quitting and just 16 joining in the final quarter of 2011. That compares with 22 departures and 26 arrivals in the third quarter, according to UHY Hacker Young.

In the whole of 2011, there were 69 new listings against 65 the year before, and the number of departures dropped from 158 to 116. Several more companies cited "financial stress" as their main reason for quitting AIM.

Laurence Sacker at UHY Hacker Young said: "Although AIM has clearly pulled through some very difficult times, it has not been immune to the current problems with the euro. In the short term, a full recovery in the IPO market seems unlikely. Investors have retrenched into defensive assets and until they have confidence that politicians have fixed the eurozone crisis once and for all, they are unlikely to return to the AIM market en masse."

The accounting firm said nearly four in 10 of the companies that left AIM did so through takeovers, with many unable to raise fresh funds on the market through rights issues or share placings.

Mr Sacker said: "Those companies that were unable to raise the funds they needed through secondary issues may have been more likely to succumb to takeover bids."

The total raised by new issues was down 44 per cent from 2010. The amount raised through flotations fell to £513m in the 11 months to November 2011 from £908m.