AOL Marks Three Decades: Dropped Listings, Skepticism, and a Pinch of Hope
Ah, hello there! Let's dive into the current state of AIM, London's very own alternative investment market, a bit of a rollercoaster these days, ain't it?
First off, let's talk numbers. The number of firms listed on AIM has plummeted to levels not seen since 2001, with over 70 companies ditching their listing last year alone. To add insult to injury, IPOs have stalled to levels last seen in 2008/9, with a measly ten companies making the leap. city am had a chat with Marcus Stuttard, the London Stock Exchange Group's Head of AIM & UK Primary Markets since 2009, who acknowledged the broad church of companies AIM has, but also acknowledged the small market size as compared to the past.
Now, the exodus gripping AIM is no localized trend but a global one. The City has felt the harsh bite of public market delisters, with 88 firms leaving or transferring their primary listing away from the London Stock Exchange in 2024. But, Stuttard remains optimistic for AIM's future, citing heightened levels of confidence as the key difference from 15 years ago. He highlighted the wider package of regulatory reforms in the UK as a boon.
One of Stuttard's ideal birthday presents for AIM from the Treasury? Certainty around tax rate. A leaked memo last month revealed that Angela Rayner had lobbied the Chancellor to scrap the inheritance tax on AIM shares, a move she claimed could raise between £100m to £1bn a year. This would continue moves made in the autumn Budget where relief on AIM shares was halved.
But, as AIM celebrates its milestone birthday, Stuttard will be holding out for any gifts that could bolster the index's standing, particularly in the face of competition from London's new private stock market, Pisces. Small caps exiting exchanges in favor of private market alternatives would be no new feat.
In terms of costs associated with an AIM listing, Stuttard acknowledged that the upwards of £1.1 million it costs to list and maintain a listing on AIM is steep. However, he highlighted that the LSE's fresh discussion paper will address the evolving nature of market practice, looking at elements that may be scaled back.
Finally, Stuttard called for the UK to embrace risk and "understand there are huge growth opportunities" across the country. With more than 30,000 visible scaling businesses in the UK, AIM hopes to be a strong support mechanism for businesses looking for fresh capital and support.
All in all, the future of AIM remains uncertain, but with renewed ambition, optimism, and the right blend of government support, market innovations, and investor engagement, AIM might just be able to turn its next decade into a thriving, roaring success. Here's hoping the Treasury and FCA get their gifts wrapped and delivered soon!
Investing in AIM's future may require addressing the high costs associated with its listings, as Marcus Stuttard, the Head of AIM & UK Primary Markets, suggested that the LSE's fresh discussion paper will address elements that may be scaled back. Furthermore, Stuttard urged the UK to embrace risk and recognize the growth opportunities that exist across the nation, creating a supportive environment for more than 30,000 scaling businesses seeking fresh capital. Undeterred by the stagnant IPO activity and the exodus of firms from AIM, Stuttard maintained an optimistic outlook for its future, acknowledging the potential benefits of regulatory reforms in the UK and the need for certainty around tax rates.
