London Stock Exchange’s AIM is a zombie market not fit for purpose

The Alternative Investment Market (AIM) was meant to help smaller companies raise vital funds to grow. But in reality, it’s performing woefully: nearly two-thirds of companies on the market for more than 10 years are loss-making. It must get urgent reform, writes Chris Blackhurst

The London Stock Exchange’s Alternative Investment Market has come under fire for its performance (Kirsty O’Connor/ PA)

As the year draws to a close, it is safe to assume that 2023 would be one year the City would rather forget, certainly where the stock market is concerned.

The FTSE 100 has been flat and trading volumes have slumped. Worryingly, businesses choosing to go public have opted elsewhere overseas. In a bad year for floats worldwide generally, London was the worst-performing traditional IPO (initial public offering) market, seeing just 14 listings versus 22 in 2022. This, says the EY Global Trends IPO report for 2023, compares the New York Stock Exchange which notched up 132 IPOs in 2023, up from 90 in 2022.

“Persistent inflationary pressures and elevated interest rates also precipitated sharp declines in UK deal-making momentum,” says EY. As well as inflation and higher rates, it’s safe to assume scars have not healed from 2021 which saw some dismal UK flotations.