Ready, AIM, Fire?

Giles: As the Budget and new Listing Rules bed in … what now for AIM, London's Alternative Investment Market?

Louise: Welcome to Mergerspresso, AG's soundbite on all things corporate finance. Hi I'm Louise Pritchard.

Giles: And I'm Giles Distin. So, Louise, how are things looking for the AIM market?

Louise: Very uncertain. Delistings have long outpaced IPOs, and many more companies are having existential angst about their AIM listing. The number of AIM companies has now dropped below 700 for the first time since 2001.

Giles: And AIM is historically the junior market, but the shakeup to the Listing Rules mean that in several areas, including major transactions, it's now slightly more regulated than the Main Market.

Louise: Well that's true, although some companies are weighing that against the much higher audit and compliance costs of the Main Market. What impact do you think the Budget had on AIM?

Giles: Well, the big fear was that all inheritance tax exemptions would be abolished for AIM shares. Ultimately, this was halved to a 50% relief on inheritance tax, with an effective tax rate of 20%. So not as bad as people feared, but no genuine incentives in there.

Louise: I agree – Liquidity is key – so the government should factor this into its wider pension reforms. However, it is possible that extending IHT to pension pots may divert some extra investment into AIM to benefit from this relief. But AIM itself does need to create more positive incentives to list there

Giles: One to watch, then. Do get in touch with your views on the future of AIM. And please, tune in again next time for more from us at Mergerspresso.