AIM MARKET

"AIM is the most successful growth market in the world for small companies. 3,075 companies have been admitted to the AIM market since the Market’s launch in 1995 (up to end of June 2009). A total of £61,801million has been raised in total; £32,557million in initial public offers and £29,243million in further fundraisings.

Over the past few years, AIM has become an increasingly international affair, with as much as 55% of total market capitalization made up by companies with international operations in 2008. As of the end of December 2008, 317 non-UK companies from 31 countries listed on AIM, representing around 20.5% of all companies listed. However, this does not give a full picture as many international companies list under a UK holding company. It is therefore useful to analyse companies by their country of operation. Using this method, 595 AIM companies (38%) can be categorized as international companies. Notably, they also have a significantly larger average market capitalisation than UK companies - £35.1 million compared to £17.6 million.

The fallout from the global credit crisis and resultant market uncertainties has had an impact on AIM, like all other global markets. The number of new admissions fell dramatically to 114 in 2008 from 284 in 2007 and a peak of 519 in 2005. However, despite the fact that the total number of companies has fallen from the 1,550 listed in 2008 to 1,413 in June 2009, market value has actually increased from £37,731.9 million in 2008 to £47,844.2 million in June 2009. Further signs of recovery can be seen with the first major IPO of 2009, with Max Property Group raising £220 million on admission to AIM in May. In addition, trading volumes and average prices have both increased while market commentators and brokers predict an improvement in fund raising conditions towards the end of 2009 and through 2010.

It is likely that the number of admissions will increase as global economies rebound but that AIM Investments will be operating in a climate in which company valuations will be forced to be more conservative and resultant share prices lower. A downturn like the present can be viewed as an opportunity to buy into the markets, with the likelihood of increases in share prices when markets recover."