AIM, which was set up in 1995, continues to prosper despite serious concerns about its future following the financial crisis of 2008/09. In short, it is now in rude health.
Currently, 959 stocks are quoted on AIM, 43% below the record 1,694 that were quoted in 2007. As the increase in total AIM capitalisation suggests – the 2007 figure was £97.6bn v £100.2bn currently – the quality – perceived or otherwise – of AIM-quoted stocks has risen.
The comparisons with 1995 underline how AIM has expanded; there were just 121 stocks then quoted, worth a modest £2.4bn. Importantly, too, AIM has been disproportionately skewed towards the new economy, with a substantial number of internet, technology and biotech stocks.
Since 1995, AIM has raised c£104bn, with 2006 and 2007 being its most successful years – raising around £16bn in each of those years – compared with our estimated 2017 figure of £5.5bn. Interestingly, the majority of the money raised derives from further issues of existing AIM stocks rather than from those undertaking an IPO.
AIM currently hosts 11 stocks with market capitalisations of over £1bn. The largest is on-line fashion business, ASOS, worth c£5bn. Fevertree Drinks, Hutchison China Meditech and Boohoo all have market capitalisations of c£2.5bn – all are young companies.
Although the future for AIM looks bright, it could be disrupted by a weak economy, higher interest rates, tighter regulation, a less-friendly tax regime or even AIM-related shortcomings.