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Specialist lenders, miners and oilers could list this year but number of firms on AIM falls below 1,000

The alternative market ended 2016 with 995 constituents, with 58 new entrants and 103 leavers.

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The alternative market ended 2016 with 995 constituents, with 58 new entrants and 103 leavers

The number of companies listed on AIM fell below the 1,000 mark for the first time in 12 years, according to research from the broker finnCap.

The alternative market ended 2016 with 995 constituents, with 58 new entrants and 103 leavers.

And according to one fund manager, the shake-out last year was no bad thing for the junior bourse.

“These are companies who have reached the end,” said Chris Boxall at Fundamental Asset management.

“These businesses are highly speculative, unprofitable and now have nowhere to go. It is good to see the unloved calling it a day.”

That may sound harsh, but many investors and market participants have been waiting for the system to be flushed out.

The market appeared to be serving its primary purpose with newly listed companies raising £1bn of new money from investors, with existing AIM companies raising a further £3.6bn.

The retrospective was provided as finnCap previewed the prospects for new AIM listings – and it has identified a number of IPO areas it expects to be hot in 2017.

With over £150bn of spending earmarked on roads, rail and other infrastructure projects, the next year could be a good one for contractors and equipment makers, the broker reckons.

Specialist lenders should also prosper, although finnCap warns: “Those without a specialism will find themselves in an increasingly tough competitive space.”

It expects miners will make a return, “but realistic pricing and high quality prospects will be critical to success”.

And the broker expects a “much improved” IPO market for quality oil and gas projects that offer “proven resource upside and development potential”.

finnCap says it may be a difficult year for consumer goods companies with an uncertain outlook for the UK economy.

Meanwhile, Charles Rolls at, drinks maker Fevertree (LON:FEVR), one of the AIM’s most successful listings of recent times, believes it could be another challenging year given the political and economic backdrop.

Quoted in the finnCap report, he said: “The election of Donald Trump and the decision to leave the European Union may generate difficulties in exporting to both sides of the Atlantic.

“However, I don’t think markets ever completely close. It may be difficult this year but with a good management team, and good business – you’ll find a home on AIM.”

Quick facts: Fevertree Drinks PLC

Price: 2153 GBX

AIM:FEVR
Market: AIM
Market Cap: £2.5 billion
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