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Leading City figures have expressed alarm over the state of London’s AIM market, as new analysis shows the number of companies listed on the junior exchange has fallen to a 20-year low.
Accountancy firm UHY Hacker Young reports that around 80 firms have exited the AIM exchange over the past year, leaving only 722 PLCs on the bourse. This is the smallest number since 2002, and less than half of the 1,694 companies listed during AIM’s peak in 2007.
The decline is exacerbated by a lack of new IPOs, with only eight companies choosing to list on AIM this year. Concerns about administrative costs and limited capital have deterred potential new entrants.
Dan Coatsworth, an investment analyst at AJ Bell, attributes the decline to reduced institutional investor demand for small caps, compounded by the pandemic and high interest rates. The low investor interest is prompting AIM companies to question the value of maintaining their listings.
Nicholas Hyett of Wealth Club cites high interest rates and policy uncertainty as key factors, noting that the recent de-listing of Nightcap—a chain of 46 bars—reflects these broader issues. He also highlights potential concerns over UK inheritance tax relief, which could further impact AIM.
Judith MacKenzie of the Quoted Companies Alliance (QCA) points to pension funds’ reluctance to invest in UK stocks as a major factor in the market’s poor performance. She advocates for pension reform, a UK ISA, and a national wealth fund for equities to encourage investment.
Charles Hall of Peel Hunt emphasizes that reforms such as abolishing stamp duty and adjusting listing rules could help rejuvenate the market.
