US Firms to London?
London’s AIM market has found itself welcoming a flotilla of US firms, as increasing numbers of growing North American businesses cross the Atlantic in search of a stock market listing.
The causes of this influx are two-fold. Firstly there are the quirks of the US market itself. As Donald Stewart of law firm Faegre & Benson explains, US corporate finance advisers keen to raise equity finance for small and medium sized companies are getting themselves acquainted with AIM because ‘NASDAQ’ has raised its bar.
Imposing minimum market capitalizations and share
prices has left large numbers of
Then there is the regulation. In the wake of the Enron scandal, US regulators introduced the controversial Sarbanes-Oxley standards, which were designed to tighten up the regulation and accounting standards applicable to quoted companies.
While they appear to have achieved this some have suggested that they may have actually gone too far and, as a side effect, increasing numbers of growing US companies have started to look overseas for a stock market listing. AIM seems to be the natural choice.
Certainly to Jarvis Coffin, chief executive of Massachusetts-based internet advertising group Burst Media, (click link for 2008 company report REVENUES $28m) the aforementioned factors were key in deciding to list in London.
It has been a sunny spring for AIM, with valuations getting a much needed boost from a recovery in investor sentiment. The AIM All Share index, which began the year below 400, is now over 500. Advisers will be hoping this heralds a renewed enthusiasm among companies for floating on the market, which has seen only two initial public offerings so far this year.
Because of the wide range of sizes among AIM companies, and the preference of some firms to serve particular niches of the market, there is only a weak correlation between the number of clients on an adviser’s books and the total valuation of those clients.
The most striking change this month is that Collins Stewart has dropped to fifth place in the broker table and seventh as a nomad. The firm, which has normally come second in both of those rankings since our records began in 2007, lost six clients last month, but it retains the biggest slice of AIM by market capitalization, representing companies worth almost £3 billion.
AIM Adviser Index Article Date: Jun 11 2009
Among the accountants, there is no change in ranking: the top seven, all global businesses except for Baker Tilly, are head and shoulders above the rest in terms of client numbers and market capitalization of those clients. Across the top ten, client numbers are down slightly, while market capitalization is up 15 per cent. Meanwhile, Lawrence Graham, Norton Rose and Eversheds continue to head the league of leading AIM lawyers.
Data sourced from The AIM Guide (published by Vitesse Media) on 18/05/2009. Market capitalisation data correct at end of previous month. The AIM Adviser Index is intended as a snapshot of the market and Vitesse Media is not responsible for errors or omissions in the information provided by AIM-listed companies about their advisers.
it chaperoned onto the market the year before. Its transactions included
a £45 million funding for Vietnam Property Fund and a £53 million placing for the aforementioned Resaca, with both getting away in the first seven months of 2008.
Cenkos and KBC Peel Hunt both completed five floats apiece, similar
to their 2007 totals, though Grant Thornton’s five was six less than it managed the year before. Collins Stewart, partly voluntarily, was another to bring fewer companies to AIM, its two floats as nomad being some way from the 15 AIM newcomers it schooled to market in 2007.
Investment fund specialist Fairfax I.S. oversaw the largest single transaction, the £116.6 million February float of Terra Catalyst Fund, while its one other client raised no funds.
The leading nomad in terms of client price performance was WH Ireland, whose single company, JSJS Designs, was introduced at 2p before quickly settling at a higher price. Collins Stewart’s two clients performed relatively strongly, with acquisitive shell Marwyn Materials up 55 per cent and Yangtze China Investment down a fairly modest eight per cent.
Among the leading brokers, KBC Peel Hunt and Seymour Pierce were jointly the most active with five new clients each.
Meanwhile, the most active accountants were Deloitte and KPMG, with nine clients each, followed by AIM specialists Baker Tilly and Grant Thornton with eight apiece.
This feature is a shortened version of the full research report, New Issues on AIM 2009. To order the report, call 020 7250 7056 or email email@example.com