60-london-stock-exchange 11/12/09 16:50 Page 60
CAPITAL MARKETS
mandadeals.co.uk
Packing a punch
Expectations are high for the Alternative Investment Market in 2010
T
hose nascent exchanges seeking
to steal the Alternative
Investment Market’s (AIM)
crown as the leading platform for growth
companies would do well to note that for
the year to November, the London Stock
Exchange’s junior offspring raised over
£4.5 billion for its companies.
Some £583.4 million of this was from
new issues, though it’s no surprise to learn
this figure is down 47 per cent on 2008
due to the freezing of global IPO markets.
However, secondary fundraisings are up 28
per cent year-on-year to £3.9 billion.
Marcus Stuttard, the head of AIM, sees
visibility will increase and liquidity will
‘If you come to market with a relatively small free float, naturally follow. Now people have a
you can’t expect liquidity to build automatically’
much greater understanding that you get
out of the market what you put in.’
Given that debt is a such a rare
such firepower, driven by institutional The number of companies listed on commodity at present, Stuttard argues
investors, as a strong vote of confidence. AIM now stands at 1,320, which is that the equity to be gained on public
‘If it wasn’t for the huge amounts of markedly lower than the 1,700 on the markets will be ever more attractive. As
money raised over the past three to four market during 2007. Stuttard points out for those companies already on AIM, he
years, people would be saying they can’t that the volume of companies delisting expects to see some real M&A activity
believe how much has been raised for hasn’t changed too drastically from years during the year ahead.
smaller companies on a growth market gone by. ‘The main reason for the reduced ‘I’ve no doubt about that and we’re
during a recession,’ he comments. numbers is that we haven’t had IPOs already starting to see it,’ he says. ‘During
topping the market up,’ he observes. the first part of the year, activity was
EQUITY’S PLUNGE For companies considering an IPO, hampered because of uncertainty about
As for the value knocked off the exchange there will be questions about liquidity, valuations. Now there is a bit more
during the past 12 months, Stuttard argues especially for those at an earlier stage of stability in the market and valuations are
that this needs to be placed firmly in the their development. Stuttard still sees more realistic, which gives companies the
context of the recession. ‘At the end of AIM very much as a platform for young, confidence to make acquisitions.’ ■
December last year, the AIM All-Share ambitious businesses keen to accelerate
Index sat at 394. It closed at the end of their growth. ‘But companies should be Marcus Stuttard, Head
November this year at 653, up 66 per cent. practical about what to expect,’ he warns. of AIM. For more details,
You’ve got to remember that in the final ‘In the past, there may have been a call 020 7797 1104 or visit
quarter of last year we were in a state of temptation to believe that by virtue of the website of the London
massive turmoil.’ being on a public market, a company’s Stock Exchange
60 Mergers & Acquisitions
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