There has been a marked surge in interest for companies in the Asia Pacific region to seek a listing on the London Stock Exchange's Alternative Investment Market (AIM), according to audit, accounting and business services firm BDO Stoy Hayward LLP corporate finance division partner Jack Clipsham.
Clipsham, who was in Kuala Lumpur for a seminar to introduce the opportunity to list on AIM recently, said AIM was the “perfect place for medium-sized, high-growth companies in the region to list on”.
As such, the BDO group is targeting these companies to list on AIM and be their accountant and auditor.
While the London Stock Exchange's Main Market is the most prestigious and effective listing venue for big-cap companies, AIM (known as the world's leading small-cap growth market) is regarded as a stepping stone to the Main Market.
However, AIM, he said, has become a market in its own right.
Currently, there are over 1,600 companies in AIM which outnumber the number of companies listed on the Main Market. Part of this is because there have been many firms which have moved from the Main Market to AIM, which has a total market capitalisation of over US$200bil.
Malaysian companies in AIM number six, namely Steppe Cement Ltd, Infoscreen Networks, Peninsular Gold, Velosi Ltd, GMO Ltd and Biofutures International. Another AIM member, ICB Financial Group Holdings AG is based in Switzerland but is largely owned by former Finance Minister Tun Daim Zainuddin.
To be a part of AIM, however, requires the appointment of a nominated advisor, which is first approved by the London Stock Exchange, which relies on financial reporting accounts and lawyers for accounting and legal due diligence.
According to Clipsham, regional interest to float shares on AIM first came when BDO assisted in the listing of Chinese firm China Wonder, which received good support.
“We have completed 14 floats of Chinese businesses. Firms from other countries, attracted by the positive investor response to the Chinese experience, are now sitting up and taking notice,” he said. Coincidentally, AIM is also keen to attract overseas companies to list, and will take in firms regardless of sector, as long as it demonstrates positive prospects, good performance and strong management.
Some American companies have also opted to float on AIM, eschewing the stricter-controlled, but closer-to-home Nasdaq.
“The point, however, is to ensure that these firms are attractive to investors, especially the institutionals that have a lot of money to spend and a lot of options, so they tend to pick the best returns and lowest risk counters” Clipsham said.
General investor sentiment in AIM counters, though, have been positive, he added, as nominated advisors have now firmed up their legal and financial requirements. “Due to the quality of due diligence now, AIM counters should be comparable to that on the Main Market, though it's encouraging for companies, they still need to bear in mind that investors are very choosy.”
Did you find this article insightful?