The spat between the London Stock Exchange and its American rivals is getting silly. In its latest news release — a thoroughly up-beat pre-close period trading statement — the LSE has taken to referring its junior AIM market as “the world’s most successful market for smaller companies.”
Is it? Roel Campos, the SEC commissioner who recently claimed his words had been taken out of context when he suggested AIM was little more than a casino, might disagree — as might John Thain, the New York Stock Exchange’s chief executive, who suggested AIM might be damaging the City of London’s reputation.
But the real teeth grinding will be at Nasdaq, the LSE’s largest shareholder, which has been touting itself as the world’s great market for growth stocks for about 36 years.
So what do the numbers say? Well, in the year to date, new issues on AIM are down 16 per cent, but, in the LSE’s words, “remain good” at 375 flotations. The total number of companies trading on AIM rose by 206 to 1,632 — indicating that some 169 firms were taken over, moved to a primary listing, de-listed or simply went bust during the period.
In performance terms, the FTSE AIM index has dipped 32 points or 0.27 per cent to 1139 in the year to date. From its all time high in March 2000, the index is down 61 per cent, while since inception in 1996, the index is up 12 per cent.
Yes, 12 per cent in 11 years. AIM may have proved a wildly successful market for those selling businesses and/or raising money, but for investors — in capital terms at least — the experience has been rather different.
