Aim-listed companies leaving junior index hits three year high
The junior stock market has had a net loss of 29 companies in the first two quarters of 2015 – its biggest for three years.
The Alternative Investment Market (Aim) shrank by 27 companies in 2012 but even more left the index this year. Last year the market grew by four companies.
Accountancy firm UHY Hacker Young suggested the losses were driven in part by a more intensive focus on corporate governance as Aim matures, prompting Nominated Advisers (Nomads) to re-examine their relationships with some of their Aim clients.
Nomads undertake due diligence on an Aim-listed company prior to its IPO and act as its primary regulator once it is trading on the market. The departures included 13 companies that delisted after their Nomad stood down, and they were unable to find a replacement within the month allowed. Rangers Football Club was one of the companies affected after its Nomad WH Ireland resigned in April.
However, M&A activity increased by 19 per cent over the last year, which may also explain some of the de-listings. And the second quarter of 2015 saw more than £306m raised through IPOs, up from £85m in the first quarter – its worst quarter for raising funds since 2012.