AIM Maintains Its Asian Appeal, At Least For Now
5th April 2010, Corporate Financing Week
Malaysian data centre provider CSF Group has gone public on London’s AIM index with a GBP28mn IPO, signalling the end of a barren spell for share offerings by Asian companies on the junior bourse and underscoring a renewed appeal for such listings from the region. Not only does the IPO represent the largest listing from the region. Not only does the IPO represent the largest listing by an Asian enterprise on AIM in over twelve months, but it is also the largest tech sector offering during the same time period. For a bourse which has long marketed itself as a home for high-growth companies in industries such as the tech sector, the listing will no doubt come as welcome news. The IPO also serves to highlight the overall dynamism of the exchange, which has rallied 6.92% in the y-t-d, outperforming the wider FTSE All-share index.
London’s junior bourse has long served as an attractive place to list for high-growth Asian firms, particularly from China. CFW identifies this appeal as being threefold: 1) it provides foreign companies with exposure to international investors; 2) offers a fast-track listing process; and 3) has low regulatory requirements, at least relative to Hong Kong and London’s primary bourse. In addition, CSF’s public offering also appears to be something of a play towards the lucrative data centre sector, which itself is going through a sustained phase of growth at present. The Asian data centre market is set to grow by 15% this year and by a further 16% in 2011, according to market researcher Frost & Sullivan.
One note of caution, however; CFW, believes that in the long-term AIM’s Asian Appeal may begin to wane amid competition from rival bourses. China’s newly launched Growth Enterprise Market (GEM) is certain to compete directly for listings with AIM. China’s answer to the US’s Nasdaq board was established to appeal to growth-stage firms emerging from Asia. In fact, competition is already underway. In the first two months of 2010, the GEM hosted 22 new listings, while AIM received just eight, and more importantly only one from overseas.