Ongoing low commodities prices was behind a fall in AIM market listings to their lowest level since the height of the financial crisis, lawyers in the market have said.

Last year the AIM market saw its lowest number of admissions since 2009.

According to London Stock Exchange data published this week, 61 companies were admitted to AIM in 2015, the lowest number since the height of the financial crisis in 2009 when 36 companies were admitted.

However, the total market capitalisation of the companies listed increased from last year, from £71.414bn to £73.076bn.

Commodities crash
Fieldfisher corporate partner Neil Matthews puts the fall in new listings down to the travails of the resource sector due to a slump in commodities prices – Brent Crude hitting an 11-year low this week as it inched below $35 a barrel.

"The main factor is that resources stocks have been very badly hit and that sector has been the mainstay of AIM over the last ten years," he says.

Wragge Lawrence Graham & Co corporate head Sunil Kakkad (pictured) also points to the commodities slump as the reason for the dearth of initial public offerings (IPOs) on AIM in 2015.

He adds: "Similarly if you look at the number of companies that have left AIM the majority of those have been in the resources sector."

There were 121 delistings in 2015, of which only 4 were transfers to the main market, and the total number of companies on the market fell from 1,104 in 2014 to 1,044 in 2015.

However, DLA Piper's EMEA capital markets group head, Alex Tamlyn, argues that the decrease in the number of companies listed on the market is not necessarily a bad thing.

"We have come down from 1,700 companies at the apogee to around 1,000," he says.

"In cutting out the dead wood the market is actually strengthening its brand and making it clear to the international marketplace that it is after companies of quality with fast growth potential," he adds.

Bright spots
While the total amount of money raised on AIM fell from £5.868bn in 2014 to £5.462bn in 2015, there was an increased amount of secondary capital raising activity.

Kakkad says: "The secondary issues market has been very helpful throughout the last 12 months, which has very much been a feature of the work we have seen."

Secondary fundraising accounted for £4.304bn in 2015, up from £3.269bn in 2014.

2015 has shown that there is money available, despite uncertainty in certain markets, for good quality companies

Tamlyn adds: "2015 has shown that there is money available, despite uncertainty in certain markets, for good quality companies."

Partners cite areas such as life sciences, technology and retail as bright spots and are positive about the pipeline of work for the first two quarters of 2016.

Matthews says: "We have been particularly active ourselves in the life sciences space, we have worked on a number of IPOs in that sector in the last 18 months and we continue to do so."

For DLA Piper the technology sector was particularly active, as Tamlyn explains: "For us technology has been the strongest sector and we have seen activity in the online retail space as well."

December was a strong month for both primary and secondary capital raising on the AIM market last year with seven new market entrants, accounting for £318m of new capital raised and a further £319m raised in secondary issues. Partners are hopeful that the strong end to the year will translate to a positive start to 2016.

"We've got IPOs in train at the moment so the first half of 2016 should be comparable with the second half of 2015 which was the stronger half of last year," Tamlyn says.

Travers Smith corporate finance partner Richard Spedding was also confident about his firms IPO pipeline in 2016.

"Over the last quarter we have seen a healthy number of companies position themselves for a Q1 16 AIM IPO – typically based on positive test marketing. Good management teams with clear business plans and growth stories remain attractive."

Kakkad confirms that Wragges' too is currently working on IPOs, which he expects to see the light of day in early 2016, and he is hopeful that the pattern will translate to a stronger year on the AIM market in 2016.

"The pipeline of work that we have suggests to us that we will see more new companies coming to the market than we did last year," he says.

He concludes: "We are quite optimistic about the next 12 months, there are always dark clouds on the horizon in terms of the wider macro-economic indicators but at the moment we don't feel that there is a significant cause for alarm."