A recent study undertaken by Baker Tilly reported that investors believed the
raft of overseas IPOs was to blame for AIM’s underperformance in 2006.
‘AIM has proved itself. Nobody forces an investor to invest in a particular
company,’ said AIM advisory board chairman Adam Hart.
‘The UK investors are concerned about the number of overseas companies that
carry a higher risk of underperforming. Some have, and this has tarnished AIM as
a whole, but just like any other, this is a “caveat emptor” market.’
AIM has 472 overseas businesses listed on it, Baker Tilly reported.
To date Australia (44), Canada (44) and the US (39) have provided the most
companies to the junior exchange.
The study showed that 12% of those polled thought the increased number of
overseas companies was a factor in contributing to AIM’s poor performance last
Nearly half (49%) of the 51 institutions invested in AIM cited the
globalisation of the market as ‘generally detrimental.’ The majority of the
market companies thought that globalisation had been a benefit to the growth
Hart said: ‘There are relatively low levels of IPO activity compared to this
time last year, but this is because the fund managers are saying “we don’t want
to see so many companies listing” because they’ve got pretty full portfolios
after so much activity.’
He added: ‘I think we will see a much more muted level of IPO activity, but
this suggests that the quality of those that do get through the IPO process will
be ensured because fund managers are being more selective.’
As Hart predicted earlier this year, more top AIM companies are vaulting to
the main list after benefiting from the comfortable climate on the junior
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