Overall AIM delistings are decreasing, according to research by City law firm Trowers & Hamlins and accountancy firm UHY Hacker Young. 

Overall AIM delistings are decreasing, according to research by City law firm Trowers & Hamlins and accountancy firm UHY Hacker Young.

Although the total amount of AIM delistings have reduced by 11 per cent to 72 from its peak in the last quarter of 2008, the number of companies that are coming off the exchange as a result of insolvency have jumped by 183 per cent to 34 in the last quarter.

Laurence Sacker, partner at UHY Hacker Young, says: “Just as in the rest of the economy, we shouldn’t be too shocked to see AIM continue to suffer from insolvencies. However, commodity prices have recovered from their lows and investors’ willingness to subscribe to secondary fundraisings on AIM has recovered.”

Adds Sacker: “This does suggest that AIM companies have a better chance of raising further funding than they did just a couple of months ago.”

Trading in AIM shares have also recovered. Charles Wilson, partner at law firm Trowers & Hamlins, comments: “Since the beginning of 2009, the AIM index has risen by 29 per cent and that may have dissuaded some companies that were suffering from a very low market capitalisation from delisting.”

However there is still more that can be done. Sacker adds: “We would like to see tax breaks reintroduced for investing in AIM and other smaller companies. Unfortunately calls to allow VCTs more leeway to invest in AIM companies seem to be ignored by the Chancellor.”