AIM and PLUS - The future beckons…

Monday 9 Feb 09- As 2009 continues to battle its way through snow, ice and the morass of gloomy economic statistics, two key elements of London’s financial infrastructure for smaller entities AIM and PLUS are both looking ahead off of the back of two contrasting 2008s.

For AIM the year ended on a somewhat low note with new admissions down on previous years and questions being raised about the suitability of the market for small cap shares. For PLUS based on 2008 the future looks extremely rosy, with admissions at a record level and their share trading platform going from strength to strength.

PLUS are old friends of ours and last year we ran two successful seminars with them and Orange Corporate Finance in Cambridge and Guildford . There is no doubt that PLUS is now a very serious option for companies seeking their first float and looking to raise funds for expansion.

But we support AIM too, and have viewed with interest a recent survey by top accountancy firm Mazars. The survey canvassed the opinions of both AIM quoted companies and a wide range of professional advisors and concluded that, whilst AIM had been tremendously successful in raising over £34 billion for companies from all around the world since its formation in June 1995, the market could provide more liquidity for companies if the market listed fewer but higher quality companies. With nearly 1,600 companies listed on AIM, over 60% of the AIM companies and advisors who responded to the survey said the sheer numbers of companies made it hard for individual businesses to raise their profiles and attract investors.

London needs both AIM and PLUS to give growing companies the best chance to continue to grow by issuing shares to a wider pool of investors. The challenge for both markets remains the need to create sufficient opportunity and liquidity to ensure that there is actually a market for those shares. Equally there is a responsibility for advisors to work closely with their clients in selecting the market that best suits them clients and give them the best opportunity to be successful. If this can be achieved then both markets can confidently move forward in the future, thus providing a much needed boost to our battered economy.