AIM outshines other growth markets

This week a Chinese property firm is floating on AIM, in favour of markets closer to home. How does AIM manage to attract more international firms than any of its global counterparts put together?

For smaller firms, growth markets offer the opportunity to raise finance with less stringent entry requirements and lower costs than the main markets.

Yet not all international growth markets are as accessible to start-up firms as others.

AIM needs only four to five months of preparation.

Li Tak-kwong

Chief executive

Libertas Capital

This week China’s Canton Property Investment chose a listing on London’s Alternative Investment Market (AIM) over Hong Kong’s Growth Enterprise Market owing to regulatory barriers.

Less time to prepare

AIM offers an “easier and faster alternative” for Chinese start-up firms looking to raise capital according to a report in the South China Post.

Speaking to the newspaper, Charles Li Tak-kwong, chief executive of UK corporate finance specialist Libertas Capital said that more Chinese firms were likely to follow in Canton’s footsteps.

"AIM needs only four to five months of preparation," he said.

"In Hong Kong, it takes a new listing candidate 12 to 18 months to be vetted and approved by the stock exchange and the Securities and Futures Commission."

Growing popularity

Earlier this month, AIM ranked as the most successful international growth market, attracting more listings than all its global rivals combined.

The total number of listed companies shot from 1,399 in 2005 to 1,643 in 2006, according to accountants Grant Thortons.

AIM has continued to gather momentum and credibility since the dot.com boom.

Philip Secrett

International director of capital markets

Grant Thornton

The US growth market Nasdaq saw listings fall in 2006, while other exchanges such as Singapore’s SESDAQ and India's Indonext experienced only modest growth.

Backed by investor confidence

For Philip Secrett, international director of capital markets at Grant Thornton, "AIM has continued to gather momentum and credibility since the dot.com boom.

“The market has fed off investor confidence and its location in London has been critical,” he said.

The market of choice for growth companies

Learn more about AIM’s popularity for international companies in this presentation.

The total value of companies on AIM rose by over 80 per cent last year.

Magnet for international firms

There are a total of 41 growth markets worldwide – 19 in Europe, 15 in Asia-Pacific, four in the Americas and three in Africa.

According to Secrett, what singles out AIM from the rest is its appeal to firms from all over the world.

"Globally, a mere handful of markets can be said to have truly succeeded in attracting new companies and in growing investor appeal beyond national borders,” he said.

Read coverage of Canton’s listing on AIM in the South China Post (subscription only).