Nomads braced for downturn in 2008 activity on AIM
1 July 2008
Nominated advisers to the AIM market are braced for a difficult year, with many expecting a significant slowdown in the number of transactions. Most also believe that continuing international interest – notably from India – will underpin the market in 2008.
The poll, taken by London-based law firm LG, asked 150 London-based Nomads and brokers, representing well over half the Nomad firms active in the London market, for their views on a range of issues currently of concern. The findings reveal that:
- 97% believe there will be fewer than 70 flotations on AIM in the whole of 2008. Significantly, 42% of Nomads are more pessimistic still, anticipating a year-end total of 50 or fewer IPOs.
- In 2009 few Nomads anticipate much increase in market activity, with over 90% forecasting no more than 125 IPOs in the whole of 2009. Just over a third of Nomads polled (35%) anticipate fewer than 75 IPOs in 2009.
- Despite expectations of a low level of activity, almost two thirds believe there will be little reduction in the current number of Nomads active in the London market with 65% anticipating there will be between 61 and 70 firms registered this time next year and a further 14% believing the current total of 71 will remain unchanged.
- Most Nomads also believe international activity will remain important to the AIM market, with 74% anticipating up to 15 new admissions will come from India in the next year.
- Following the ground-breaking bid for London broker Hichens Harrison by India's Religare earlier this year, most Nomads anticipate further acquisitions of Nomads and brokers by Indian financial services companies in the coming year. For 47% this is "probable" while a further 21% said they expect more bids from India, where many banks and financial services companies have access to a strong pipeline of potential new business.
"There is undeniably a downturn in activity on the AIM market this year, but growing international interest, notably from India," commented Tom Nicholls, partner at LG.
"Although the outlook is difficult on the domestic front, we believe the continuing international interest in AIM helps to explain the relative optimism of many firms over the prospects for next year."
Notes to editors:
- LG is a London-based business law firm which has acted on 75 AIM transactions in the past 18 months raising £2.3 billion in new funds.
- The firm also has a very successful India Group, which is currently advising on several AIM transactions involving Indian companies.
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Tom Nicholls
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Sunil Kakkad
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