Property in eastern Europe, medical technology, Chinese energy and gaming systems. A glance at the companies that have floated on Aim, London’s junior market, this year reads like a laundry list of sectors that have furnished investors with big losses in the past. And yet there is seemingly demand for this sort of investment. In the third quarter the number of companies joining Aim was higher than the number leaving for the first time in two years.
So are we heading back to the days when anyone with a desk, a questionable mining licence and a slick PowerPoint presentation can make their way on to Aim? The environment is right. As the economy improves and pulls risk appetite up with it, so small company markets should grow.
But it is too early to be bullish about Aim. While the third quarter was good the first half was not, with 34 companies joining but 43 leaving. With just over 1,000 companies, the market is only two-thirds as big as it was at its peak in 2007. The recent popularity of Aim offerings is partly explained by changes to the tax rules that have made the market even more attractive to private investors seeking a shelter than it was before.