AIM still breeding ground for talent

28th Aug 2009 15:12

A growing number of smaller companies listed on London's AIM are choosing to join the main market, new research has shown.Eleven firms left the junior market for the big league last year, up from eight in 2007 and just three the year before, says business advisory firm Deloitte.Though the numbers are reasonably small, they represent an increasingly large percentage of all companies listing on the main market. By 2008, 21% of all businesses joining were from AIM, up from 11% in 2007 and 4% in 2006. 'AIM has had a pretty bad rap in the past 18 months but there are strong signs that at the top end of the market AIM has been successful in doing what it set out to do,' said John Hammond, capital markets partner at Deloitte. 'While there has been a considerable fall out at the bottom end of the market...at the top there is a steady and growing number of companies whose success on AIM has proved a springboard to move up to the main market.'So far this year, four out of the nine new admissions have been from AIM, although Hammond thinks that figure will rise.'There are a number of other AIM to Main move ups currently in progress and, while they may not all occur this year, the trend is pretty clear,' he says. 'Most of the activity is in the oil and gas and mining sectors, where improving oil and commodity prices have meant many of these companies are either outgrowing AIM or want the added lustre of a main market listing.'Many of these companies may have joined AIM as they failed to meet the criteria for a full listing, but the relative ease of raising cash on AIM means they now qualify for promotion.Hammond admits that part of the reason behind the exodus is a lack of liquidity among many smaller AIM stocks. But despite this, AIM continues to fulfil its role as a breeding ground for the next Domino's Pizza, Big Yellow or Peter Hambro, all former AIM darlings.