Capital Quarter Winter 2020: Q3 Capital Markets

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AIM and the main market

During the quarter to 30 September 2020, new and further issues across AIM and the Main market combined totalled £8.2 billion, the majority of which occurred during September as markets started to see an improvement, following a slow July and August.

The main market had two new issues in July and August, with total combined funds raised of £1.3 million. That compared to £1.6 billion in June and emphasises the halt to new issues at beginning of this quarter amidst fears of a second wave of Covid-19 infections. However, the Main Market experienced somewhat of a comeback in September; the total value of new issues was the highest for any month in 2020, totalling £2.5 billion and relating to three new IPOs and one transfer over from AIM. As at the end of September 2020, 1,119 companies were actively listed on the main market.

On AIM, a further £1.1 billion was raised in the quarter to 30 September 2020, including both new and further issues, down from £2 billion in the previous quarter largely due to there being minimal funds raised in August, and comparatively higher further funds raised in May and June while companies pushed to seek additional funding to support working capital.

New issues on AIM totalled £148 million, up from just £24 million in the previous quarter following improvements after hopes of a vaccine were restored. The disparity between performance in months within this quarter alone, is representative of an overall highly turbulent year with ongoing impacts of Covid and a continuation of Brexit uncertainties.

August was a particularly bad month with there being six departures from AIM in the month, contributing to a total 14 cancellations in the quarter. However, this being the lowest cancellations per quarter in 2020. New issues, of which there were five, included the readmission to trading on AIM of oil and gas company i3 Energy plc, alongside its successful acquisition of producing assets in Canada. PKF Littlejohn acted as the reporting accountants on the transaction, which saw i3 Energy complete a placing of £29 million.

The total market value of AIM increased from £97 billion at the end of quarter to 30 June 2020, to £107 billion as at the end of the quarter to 30 September 2020, an increase of £10 billion, despite the number of companies actively listed falling from 830 at June 2020.

Written by Lauren Haslam in our London office.