New floats in the pipeline
London has long been the home of European business. However, with a year of surprise elections and a vote on Brexit, concerns have been raised around the UK’s ability to attract new business and remain as a popular location for businesses to access global capital markets. With the Brexit countdown now on, many European countries are vying to take London’s crown, but it appears they may have to wait, with London’s junior Alternative Investment Market (‘AIM’) arguably leading the resistance. 17 companies have already listed on AIM this year – with five joining this past week alone; oil exploration and production company Touchstone Exploration on Monday, miners Phoenix Global Mining Ltd and Jangada Mines Plc and technology solutions provider Ethernity Networks Ltd on Thursday, and finally FFI Holdings PLC, who provide completion contracts to the entertainment industry on Friday.
With another six IPOs anticipated on AIM in the next few weeks, not to mention a potential 11 on the Main Market, and it appears London is very much still open for business.
London has long been a champion of growth companies, with a particular understanding of the resource market, so it’s easy to see why companies are still attracted to London’s markets.
- Since 1995, more than 3,600 UK and international companies have joined AIM to raise growth capital
- This includes 17 companies this year to date (with 5 this week alone!) which have raised c.£600 million and are now trading up 16.5% on average
- It has helped companies raise over £100 billion through IPOs and secondary issues, underlining its status as the world’s leading growth market
- AIM continues to mature as a market. Over the last 10 years the average new AIM company is significantly larger: £88m versus £17m in 2005 and raising more capital: £30m versus £5m
- Over past year we have seen household names such as fashion retailer, Joules; chocolatier, Hotel Chocolat and most recently logistics company, Eddie Stobart join AIM
- Over 20% of the 966 companies currently quoted on AIM are resource focussed
Gareth Burchell, Head of Shard Capital Stockbrokers, shares his view on the current London market: “During turbulent and uncertain market conditions, investors are often nervous at the valuation metrics used for IPOs, with risk clearly a worry, what is the appetite for AIM and small cap flotations? Really it’s a conundrum that investors are contemplating. Will we be caught buying something overvalued that feels the pain of a further downturn or will we pick up companies cheaper than they should be due to the aforementioned conundrum? Our view is that this is still a stock pickers market and we won’t be closing our door to new issues just yet!”
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