Exodus from junior market slows down

  • @LauraHChesters

Small listed companies are at their strongest since the financial crisis, with fewer Aim-listed stocks having failed in the past year.

A study by the accountancy firm UHY Hacker Young found that companies leaving Aim fell to their lowest level since the financial crisis. Only 14 have left this year, the lowest number of departures in any quarter since the start of the financial crisis. Just 79 companies have left Aim over the past year, compared to 257 that left in 2008/09.

Laurence Sacker, partner at UHY Hacker Young, said: "Aim has certainly come through the worst of the financial crisis. The decline in departures due to financial stress are both signs of the market's improving health."

Although the sector appears to be at its strongest in five years the number of new listings has fallen. But the rate of new listings could be improved by changes in the last Budget to abolish stamp duty on trading Aim shares. Aim-listed stocks – such as the online fashion retailer Asos – will become eligible for inclusion in tax-free Isas from next April. These changes should boost those investing in the index, which could encourage new groups to raise money via Aim.