London's AIM takes on International flavour

Companies attracted by investors base and flexible rules

 

Kuala Lumpur 22 Sept 2007 - More international companies are seeking listing on London's Alternative Investment Market (AIM), attracted by the institutional investor base and flexible regulations, according to Grant Thornton Capital Markets director Fiona Owen.

This is not lost on Malaysian companies, which have shown interest in pursuing a listing on that market. Owen told StarBiz the number of initial public offerings (IPOs) heading for the AIM had taken on a more international flavour. She said a survey showed that 75% of new IPOs going to AIM were from international markets.

"Also the quality of deals and the quantity of funds being raised has increased a lot over the past two years," she said. Owen said the attraction of AIM was its deep pool of capital. She also said investors on AIM had a good understanding of certain sectors such as natural resources and London's ability to provide analyst coverage on listed companies.

She said depending on the sector a company is involved in, it could mean, with the profile London offers, potentially getting a better valuation. a key advantage of AIM was the ease of follow-up fund raising, which was helpful for growth companies in terms of the time it takes and costs, she said.

"For a company looking at acquisition or growth, it means they can move quickly," she added. The London Stock Exchange created AIM in 1995 and started with just 10 companies. Today, there are now over 1,600 listings on AIM. Owen said the AIM started with listings from British businesses and then evolved into companies with growth strategies involving Britain and Europe.

"But now you are starting to see the market saying, if you have a good business and a good growth strategy and the returns are timely, then investors will back that company. Ultimately investors are looking at the size of the returns they are going to get," she said.

Shamsir Jasani Grant Thornton managing partner Dato' N K Jasani said there had been good feedback from Malaysian companies on potentially listing on AIM as it offered the advantage of greater flexibility and the time taken to list. He said many would want to expand into other countries like Indonesia, China and India and therefore find a listing on AIM would give them the benefit of faster secondary fund raising.

"We also see potential of listed Malaysian companies wanting to list on AIM," he added. among the benefits to Malaysian companies listing on AIM is the funding of greenfield operations.

Owen said there were currently two Malaysia incorporated companies listed on AIM. Seven others are incorporated in other jurisdictions that could be identified with Malaysia through their directors or shareholders. There has also been a listing on AIM to raise funds for investment in Sabah and Sarawak.

Grant Thornton is a leading adviser in terms of funds raised on AIM. End.