On Friday, Sandvine (TSX:SVC) announced that, on March 15th, it would delist its shares from the Alternative Investment Market (AIM) of the London Stock Exchange. The decision, said management, was “based on several factors, including low trading volumes on AIM and the cost and management resources involved in maintaining the AIM listing.”
The news comes as no surprise to those who follow the AIM, which has been hemorrhaging listings for years. The number of companies listed on the market has fallen every year since 2007, from a peak of nearly 1700 to just over 1100 today.
A recent piece in U.K.-based investment site Mindful Money ran down the broader concerns most have with the once white-hot exchange.
“AIM is looking increasingly aimless,” said the uncredited piece. “The light touch regulation which set out to attract companies has often backfired. Firms have been so loosely governed that many have slipped on to AIM with a scant business plan and sometimes no business at all. A number of companies seem to have primarily existed to serve bucket shop brokers, often no better than boiler rooms.”
Robert McWhirter, Portfolio Manager with Selective Asset Management, talked to Cantech Letter today, and said the exchange’s hands-off approach didn’t jive with the informational expectations from modern investors.
“There was a great push by AIM to attract Canadian companies, says McWhirter. “Unfortunately their “you only have to report every 6 months” in the fast moving world of investing and especially in tech stocks didn’t sit well with investors.”
Sandvine will now list solely on the Toronto Stock Exchange which, conversely, is riding a wave of success.
The Toronto Stock Exchange and the TSX Venture Exchange were first in the world for new listings amongst all global exchanges in 2012. It was the fourth consecutive year the TMX topped the list, which is compiled by the World Federation of Exchanges (WFE).
The TMX welcomed 293 new listings in 2012, consisting of 132 new issuers from the TSX and 161 new issuers from the Venture Exchange. The TMX Group was also third in the world for new international listings in 2012, with 31. The London Stock Exchange topped the list at 33, followed by the NYSE Euronext at 32.
The TMX also ranked highly when measured by other metrics. The exchanges were third in the world for equity raised, the $56.3 billion total moved it up from sixth in 2011. The WFE also ranked the TMX Group seventh in the world in terms of total market capitalization in 2012.