April 8, 2013 12:02 am

Confidence in UK junior market rebuilds

Fourteen companies left London’s junior market in the first three months of this year, the fewest departures in any quarter since the financial crisis began, in a sign of growing confidence in the Alternative Investment Market.

The figures showed that Aim had “come through the worst of the financial crisis”, according to Laurence Sacker, a partner at accountancy firm UHY Hacker Young, which carried out the research.

Last year the number of companies quoted on the market dropped to 1,095 – the lowest level since 2004.

There is a growing pipeline of initial public offerings and confidence is improving, the London Stock Exchange said last month.

However, Mr Sacker tempered optimism by adding that there was “still only a very modest level of capital being raised by new companies”.

Nine companies joined Aim in the first quarter of this year, raising £69m, compared with the £270m raised through 12 listings in the last quarter of 2012.

“It is concerning that there seems to be little enthusiasm amongst small or medium-sized businesses in the UK or internationally to use Aim to support expansion or the kinds of new investments needed if we are to have a sustained recovery,” Mr Sacker said.

A third of the departures from Aim in the first quarter were the result of mergers and acquisitions, while 14 per cent of companies left because of financial “stress” and insolvency.

Westhouse Securities was one of the companies that left Aim this year, because it said that the quote was too costly to maintain.

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