After an almost unprecedented period of growth from 2005 onwards the Aim IPO market stuttered over the second half of 2007 as global market jitters and the ensuing credit crunch sapped the confidence of many investors in the new issues market.
But, the market did not wither up and die altogether. The volume of new issues and the value of the monies raised fell but IPOs kept coming right up to Christmas with some, such as Ukrainian farming outfit Landkom which raised £54m in November, still hitting their targets and raising significant amounts.
But, anecdotally an even higher number of potential new issues found a more wintry reception in the City as fund managers who made their gains before the credit crunch were content to sit on their hands until the end of the year.
Charles Stanley Securities' head of corporate finance Rick Thompson, said: "The market has got more tricky recently. But I think on Aim the IPO market never stops in its entirety. Companies may have to suffer the Dragon's Den syndrome - giving away more than you want - but the presence of venture Capital Trust (VCT) money means [IPOs] can probably still get away."
Although it will undoubtedly be more difficult, certain sectors could help sustain the IPO market including one which had little representation in London until recently - shipping. According to corporate finance lawyer Tony Edwards of Stephenson Harwood there are up to 20 shipping companies considering an Aim listing to raise capital to take advantage of booming trading conditions in global shipping. Hellenic Carriers has announced its intention to list following the floats of Globus Maritime and Global Oecanic Carriers in 2007, both of which have performed well.
So even in tough times, white knights can come from unexepected quarters. Nevertheless, the first half of 2008 will be tougher for Aim IPOs than for some time.
