Aim is a 'bloodbath waiting to happen'

Investors on the Alternative Investment Market (Aim) are suffering a crisis of confidence, says Danny Fortson in The Independent on Sunday. Given the glut of new listings, many in risky sectors, some are predicting a 'bloodbath'.

Investors on the Alternative Investment Market (Aim) are suffering a crisis of confidence, says Danny Fortson in The Independent on Sunday. The Aim All-Share index has fallen by 25% since May, as a glut of new listings led many to re-evaluate their position in the market. "The quality isn't there," says one anonymous market source, while Andy Smith, manager of biotech fund SV Life Sciences, is more blunt: "Investors are participating in a bloodbath waiting to happen."

The issue for investors is one of over-supply and under-scrutiny. Some 1,500 companies have listed on the Aim since its inception in 1995. Most recently, US firms, frustrated by stringent compliance requirements in their home market, have fallen over themselves to list in London instead. But with new issues doubling in the last three years, investors are becoming increasingly demanding, says Yvette Essen in The Daily Telegraph.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.