Firms paying more for AIM flotations - Business - Evening Standard
       

Firms paying more for AIM flotations

The cost of listing on AIM, the London Stock Exchange's junior market, is continuing to rise, despite the number of flotations during the past 12 months collapsing by almost 90% on the previous year.

A report by the accountancy firm UHY Hacker Young blames a far tougher regulatory environment designed to protect potential investors and save the blushes of stock market officials.

The costs of listing on AIM have now reached an average of 7% of all funds raised from flotations.

UHY Hacker Young says that this increase has come despite an 87% drop in the number of flotations on AIM from 284 in 2007 to just 38 last year.

AIM companies have been harder hit by the stock market sell-off than their fully listed counterparts. Dealers often blame this on the volatility that is created by the illiquidity of shares available to trade.

Brokers are having to work harder to find investors and that is being reflected in costs.

AIM and its predecessor, the Unlisted Securities Market, were originally introduced to give small, developing companies the opportunity to raise fresh capital and obtain a stock market listing more cheaply.

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