London's Aim stock market was negatively affected in 2015 because of a lack of new issues. The year saw only 39 initial public offerings (IPOs), marking the lowest number of companies getting listed on the exchange since 2009.
According to research by accountants UHY Hacker Young, while Aim helped raise about £600m (€812.7m, $888m) in 2015, the total number of listings declined by 52 for the year, marking the biggest net decrease since 2012. In comparison, 2014 saw Aim have 85 listings. The accounting firm said 2015 saw "a notable downswing in Aim's fortunes".
Apart from the absence of new listings, the Aim market saw many delistings in 2015. While 25 delistings occurred due to companies being taken over, the decline in commodity prices saw 12 mining companies and 11 oil and gas companies quit. There were 23 delistings as a result of financial stress and insolvency and 18 companies exiting the market because of Nomad resignations.
While the London Stock Exchange (LSE) agreed that 2015 was a difficult year for the Aim market, it argued that during the year, existing companies had raised £4bn in secondary issues on Aim, marking a 27% increase from 2014. It also pointed out that while the FTSE 100 and FTSE 250 witnessed declines, Aim's 2015 IPOs saw their shares rise on average 9%.
"For a growth market like Aim, the ability of existing companies to come to the market for fresh funds is almost more important than the number of IPOs," the LSE said.
Another concern has been the Chinese groups that are listed on Aim. Only a handful of Chinese businesses left on Aim of the overall 45 have seen their share price increase in the past 12 months, according to the Financial Times.
Laurence Sacker, a partner at UHY Hacker Young, said: "A number of Chinese companies listed in the US and Hong Kong that raised money from investors left those shareholders nursing bruising losses, so it's only right that Aim should have reviewed its own position and it seems that it was decided to tighten controls in this area."
Sacker added that Aim had long been built on its appeal to mining and oil and gas companies but a collapse in commodity prices such as oil, copper and iron coupled with the China slowdown made 2015 a tough year for Aim.
For the day (4 January, 2016), the FTSE AIM 100 index was trading at 3,511.64, down 0.28%.