Investors that managed to pick up shares in Northwest Investment Group (LON:NWIG) just after its admission to the Alternative Investment Market in June last year can lay claim to backing the best performing initial public offering of 2010. Putting aside wide spreads on trading, tightly held shares and no deals yet from the Chinese-focused investment group, a 480% share gain was nevertheless a very impressive result.
After a very quiet period in 2008/09, there were officially 43 new company admissions to AIM in 2010 – excluding re-admissions and those switching from the Main Market. Unofficially, the number looks closer to 45 following a pre-Christmas surge of activity. Of those companies that got their IPOs away (and there were many that failed), 31 managed to close the year with a share price that that beat their original issue price. Five were unmoved and nine had fallen below their first day trading level. The worst performer was gold exploration group Scotgold Resources (LON:SGZ), which floated in February and finished the year down 30% at 3.5p after authorities blocked its plans to open a mine in the Grampian Highlands of Scotland (although it has recovered somewhat since).
Overall, the amount of money raised in IPOs on AIM scraped £1.0bn in 2010 – up from £0.6bn the year before and £0.9bn in 2008 but still way off the £6.2bn raised in 2007 and £9.6bn raised in 2006. In total, IPO fundraising on all markets of the London Stock Exchange rose by more than 573% in 2010, with 89 companies from across the globe raising over £10bn.
Tracey Pierce, Director of Equity Primary Markets at London Stock Exchange Group (LON:LSE), said: “We have seen a rejuvenation in the IPO market during 2010. Whilst in 2009 our markets supported a significant amount of fundraising through further issues, 2010 injected some very positive signs of life into the new issues market, including a number of major wins for London. With high profile listings from India, Russia, Asia and the Middle East, plus many other countries, the London Stock Exchange remains the international market of choice for companies with truly global ambitions. We believe that these new floats are just the beginning…
