From AIM to bust

Is your job at risk from the collapse of the AIM market?

The past three years have seen a boom in companies floating on the Alternative Investment Market (AIM), the market for smaller and mid-range companies, with the number listed doubling to some 1,600.

But AIM has lost nearly a quarter of its value since May as investors shift to safer stocks, worried that many new arrivals are now coming either from risky or out-of-favour sectors.

"Is the bubble going to burst? I think yes," warns Adam Clark, director of recruiter Beckford Hughes.

Until this downturn in sentiment, recruiters were warning that most banks were short of transactional expertise to work on both AIM - where organisations have to become nominated advisors or "nomads" - and LSE listings.

This is now changing completely, warns Clark. "The market will not sustain all the big players as well as the boutique ones. Too many people have jumped in and there has been much too much hype," he predicts.

"There will be a backlash, and I think we will see people being let go at both big players and the boutiques," he adds, though once the bigger firms reduce their activity, that may then lessen the impact on the smaller houses.

"There is bound to be a shake-out," agrees one stockbroker active on AIM, who did not want to be named.

But with AIM well known for its sharp cycles, activity - and recruitment - is unlikely to dry up altogether, just become more discerning, he argues.

"A little healthy shake of the branches does not mean the tree is going to fall down."