Nine companies listed on AIM in Q1 2012 raising £46.9m, an increase of one company in comparison to Q1 2011, in what is traditionally a quiet quarter, according to analysis by Deloitte, the business advisory firm. The money raised in these transactions declined by 30% (£20.1m) in comparison to Q1 2011, when £67m was raised by the eight companies. The rate of attrition from AIM increased in Q1 2012, with net-delistings of 25 companies in Q1 2012, compared to 21 in Q1 2011.
Admissions in March 2012 were dominated by the mining sector, with four out of five listings coming from this industry. The enterprises were spread across the sector, including iron ore, tin, gold, copper and rare earths. One transaction of particular note was the admission of Rare Earths Global Ltd, which raised £10m at the end of March 2012 at a valuation of £157m. In addition, Chinese sportswear manufacturer, Naibu Global International Plc listed on 5 April, raising £6m at a valuation of £68m.
Richard Thornhill, capital markets director at Deloitte, comments: “Metal prices have continued to remain high during the first quarter of 2012, particularly with gold being a popular retreat for investors during periods of high equity market volatility. Small cap mining companies are seeing the opportunity to use AIM as a springboard into the public markets whilst the metal prices remain strong.
“Rare Earths Global and Naibu Global International are both Chinese companies, a market that saw multiple companies list on AIM before the financial crisis, but very limited activity since. It will be interesting to see how these two companies fare and whether this heralds a renaissance for AIM as a global market of choice for growing small and mid-cap companies seeking to list. Rare Earths Global in particular has shown strong share price gains immediately post-listing, suggesting initial support for the business from the market.”
Whilst the number of companies listed on AIM continued to decrease in the first quarter of the year, the total valuation of the remaining companies continues its upward trend in 2012. At the end of February, the market value of AIM was running at a 7 month high, just short of £71bn, which dropped off slightly by March to £68bn.
“The dichotomy between companies continuing to leave the market on the one hand, and upward share price movements of the remaining companies looks set to continue. At some point during 2012, we expect one of these trends to break, but the question remains, which one,” said Thornhill.
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