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Oil slump threatens outlook for AIM listings after bumper 2014: UHY
[LONDON] Slumping oil prices could curb new equity listings on Britain's Alternative Investment Market, where many small oil and gas explorers have traditionally sought financing, according to AIM-focused accountancy firm UHY Hacker Young.
Last year the value of initial public offerings on AIM hit its highest since 2007 at 2.4 billion pounds (US$3.71 billion), twice the sum raised in 2013, according to data compiled by UHY, the 9th largest auditor on AIM by number of clients according to Adviser Rankings.
But listings in the energy sector have all but dried up since June as the oil price has halved, leading oil majors to cut their spending plans and denting the economic appeal of renewable energy projects.
Only one oil & gas producer or explorer, Savannah Petroleum , has listed on AIM in the past six months and the year's total of three is half the 2013 figure. "There is a risk that the IPO pipeline could slow somewhat as the oil price plunge takes its toll on the oil and gas and renewable energy companies that have traditionally been served very well by the AIM market," Laurence Sacker, a partner at UHY, said.
The energy sector accounts for 121 of the 845 companies listed on the FTSE AIM index, including industry heavyweight Amerisur Resources, making it the third largest sector after materials and information technology, Thomson Reuters data showed.
Globally, shelved energy IPOs over the past six months include Dubai's oil-rig contractor Shelf Drilling, which was planning to list on the London Stock Exchange, Chesapeake Oilfield Services, a unit of Chesapeake Energy , and Samudra Energy, which owns oil and gas interests in Indonesia and was eyeing a listing in Singapore.
Britain-focused companies could make up for part of the lost IPOs in the energy sector, however, if the country's economic recovery remains on track, UHY's Sacker said.
Local companies that listed on AIM in the last quarter include the Mortgage Advice Bureau, a network of British mortgage brokers, and soft drinks maker Fevertree.