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AIM-focused investors remain generally sceptical about prospects for this year, according to the Taking AIM survey by accountant Baker Tilly. But companies in the resources, oil and gas, and mining sectors were predicted to show the strongest growth in 2008.

Meanwhile, the technology sector, which was favoured by those investors surveyed for last year's Taking AIM research, has dropped to the bottom of the list of preferred sectors.

The fund managers' pessimism was mainly driven by the uncertainty in global markets. However, some investors said that the increased capital gains tax for investors in start-up companies, the general fall in business confidence, and the switch by investors to the perceived safety of bigger companies would also have a negative impact on AIM.

Hot sectors

Of the investors surveyed, 44 per cent predicted that the best performers this year would be mining, resources, oil and gas. In the previous survey, only 16 per cent said these categories would produce the best performance during 2007.

Nearly a fifth of investors predicted that support services companies would provide the best returns during this year, a slight fall on the 16 per cent who were positive towards support services last time.

Other sectors favoured this year include healthcare (14 per cent), manufacturing (14 per cent) and defence (10 per cent). Last year, only 6 per cent favoured healthcare or manufacturing, and no fund managers were positive on defence.

IPOs

Nearly two thirds of investors said that the number of IPOs would fall again in 2008. Only one investor believed that the number would rise, and 46 per cent predicted a fall in the number of UK company IPOs.

Cool sectors

The biggest shift of opinion was seen towards technology companies. In the last survey, 27 per cent of investors said they would have the most positive performance ever during 2007.

Baker Tilly’s head of Capital Markets, Chilton Taylor, said: “Not surprisingly, investors are much more pessimistic about the markets for 2008. However, investors that take a stock-picking approach will still find some value in investing on AIM.”

Faegre & Benson’s Corporate partner, Melanie Wadsworth, said: “Even in a difficult trading environment, quality AIM companies with a proven track record and strong business plan will attract investors. The market still has much to offer, particularly in sectors which are somewhat less vulnerable to any potential recession, such as resources and defence.”

The 12th Taking AIM survey, undertaken by accountant and business adviser Baker Tilly in partnership with Faegre & Benson, was carried out by an independent marketing consultancy. The survey of listed firms involved 200 companies currently quoted on AIM, 50 private companies and 50 institutional investors actively investing in AIM-listed companies. The 12th annual survey is produced in the 13th year since AIM's inception.

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