The contemporary UK investment scene is bustling with AIM shares, pulling in more and more investors everyday. According to market pundits, Alternative Investment Market seems to be a grand launch for LSE. AIM was founded 2 decades back in 1995 with the goal to magnet small firms from all over the globe- to ensure they get adequate capital for a flourishing growth. It launched with simply 10 constituents (homegrown) with a net market worth of 82m pounds.
Growth of AIM
Cut to 2015 February, AIM is boasting around 11oo firms with 217 names from overseas. The market reports reveal that over the last 2 decades, over 3,000 firms have signed up with Alternative Investment Market in between, raising over 60bn pounds of capital.
Easy listing criteria
Dubbed as the entry-level platform of LSE, AIM is usually tagged as “junior market” that stresses on small firms. For the investors, it’s also referred to as (quite often) “lightly regulated”. It’s because the very admission regulations for the firms looking to be listed on AIM list are comparatively less onerous compared to main market listing.
You should know that when a company is looking to join main market, it has to declare its audited finance records for minimum 3 years & should carry an overall worth of 700,000 pounds. But when it comes to AIM, there is no such rigid trading record obligation & also no restrictions on minimum mandatory market capitalisation. Moreover, with AIM-listed firms, the shareholder approval would be required for largest transactions chiefly. Reporting requirements and financial disclosure are usually less demanding compared to main market.
It’s tax free
One of the major reasons behind the popularity of AIM shares is their tax-free status. The Government has removed the stamp duty from the AIM shares in 2014 and AIM sticks have been placed under tax-free Isas. Additionally, a fair share of the stocks here has been exempted from the inheritance tax obligation. The main idea is to get investment in the minnow Brit companies which might emerge as corporate giants tomorrow.
Though some of the AIM shares are considered to be risky given that you would be investing in small companies- yet the contemporary market status has brought to light investment opportunities in several good firms which boast solid management, prospects & profitability. The most successful companies over AIM are Stanley Gibbons, Majestic Wine, James Halstead, ASOS, Mulberry & Domino’s Pizza.
If you are planning to try your luck with AIM shares, it’s best to proceed with a specialist investment management company. The most credible names in the market undertake in-depth research on company & market so that you can land up with an informed decision.