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AIM - The Bloodbath continued in December - 17 more departures

By Tom Winnifrith | Saturday 7 January 2017


 


On what the LSE claims is "the world's most successful growth market" the bloodbath seen in November got worse in December. It was terrible.

The good news is that six companies joined the Casino albeit one was a readmission. The bad news is that seventeen left - none being transferred to the main market. These were nearly all corporate failures. The Casino ended the year with just 982 companies - a net loss of 62 on the year.

The glimmer of light is that the new issues appear to be credible and in some cases quite big companies - Asian Growth Properties was valued at £332 million. So at one end the dross is going out but at the other (relative) quality is replacing it. For investors that is surely a positive.

However the rapid attrition of companies left on the Casino does pose a risk for investors in that Nomads servicing the bottom end of the market are already barely breaking even. If the number of companies on AIM continues to fall that will mean fewer and fewer retainers and an ever more marginal existence. And that means that Nomads are going to face ever greater financial pressures NOT to resign on clients that are "misbehaving".

The number of companies on AIM is now back at levels not seen since 1984. January has started with more departures and so I am relaxed about my December 31 2017 target of 876.


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