Westwind Research digs into AIM trends

Saw a timely and topical research note yesterday out of Westwind Partners. In their commentary on Canaccord’s recent quarter, the Westwind Research team made some interesting observations that might lead one to believe that the AIM isn’t quite as fruitful a place as it used to be for Canadian issuers. As one of the leaders of the Canada-AIM lead financing contingent (along with CIBC, GMP and RBC), if Canaccord is seeing weakness overseas, that can’t bode well for the huge pipeline of mining and VC-backed tech AIM offerings we’d been hearing about. Here’s the excerpt:

“Another concern is the revenue outlook for the U.K. market. On the conference call, management spoke of current weakness on the AIM market and how it does not yet see the conditions in that marketplace improving. In contrast, statistics from the AIM web site show that equity trading volumes were up 11% on a sequential month basis on the AIM market in October 2006, and new issue dollar volume was up by 228%. These figures run counter to management’s commentary. Either management is trying to keep investors’ expectations low, or alternatively it appears that Canaccord is losing market share. With the AIM market seeing increased competition, the latter would not surprise us.”

Now the remarks suggest that the AIM is thriving on the one hand, yet not meaningful to Canaccord as it had been. All good things must come to an end, perhaps. Are the days of 15 & 20x revenue valuations overseas for our local firms fading fast?

MRM