Small Talk: Annoyed traders take aim at on-and-off company performers

Traders are becoming increasingly irate with companies that are suspended from AIM over basic administrative delays or accounting errors. There have been numerous examples, such as Small Talk favourite Cape Diamonds, which was off the market for six months.

A case in point occurred last week. Shares in Gable Holdings, which specialises in the European insurance and reinsurance sector, restarted trading last Wednesday after a month-and-a-half suspension.

Gable, which was first admitted to AIM in January 2005 when it raised £1m, requested suspension on 29 June, after a technical delay in the publication of its full-year accounts for 2006. The company said the accounts were late because of delays to the audit of Gable Insurance, an operation in Liechtenstein.

The shares resumed trading after Gable posted its audited annual reports and accounts to shareholders. It returned to the market with a bullish trading update, saying its underwriting results had been excellent despite challenging conditions in the UK.

Despite the release of the unaudited results at the end of June, and the update, the stock fell 10 per cent on its return to close at 14.5p.

One trader said: "A good trading statement just doesn't cut the mustard when you have been suspended. The market isn't happy about things like that." Sources close to the company said the suspension had been annoying for everyone, and that the delays had been out of its hands.

Some participants had expected even further falls. One said the drop really reflected the market, which had fallen similar levels over the suspension period.

The company tried to calm the nerves of investors in the wake of the suspension but a few feathers remained ruffled.

Dual listing all the rage

Is this a trend? There seems to be a small number of companies listed on AIM targeting dual listings on other growth markets. Last week, African Eagle Resources secured a dual listing on the Alternative Exchange of the Johannesburg Stock Exchange. This follows the move by Pan African Resources to list on the same exchange in July, and Zambezi debuting on the Australian Stock Exchange the same month.

This has been driven by several motives: primarily to raise additional funds, but also to boost the liquidity in the stock. One market participant said: "There has been such an influx of junior mining stocks that investors in London probably feel a bit of fatigue. They've got a few big institutions in there but not much retail activity."

For African Eagle, the South African market was the obvious choice as its assets are in Africa. It raised R104.2m (£7.2m) after a placement of 53 million shares, with about 30 per cent of its shareholder register in South African investors' hands.

Econergy seeks wind of change in Latin America

Econergy, a US-based independent power producer, has been quick to capitalise on the global surge of interest in renewable resources. After listing on AIM as a carbon credit trader a year ago, it is now hoping to tap an appetite for renewable energy in South America. This relatively underdeveloped sector requires extensive investment to reap returns and is a tricky business to get right, yet its projects in South America are intriguing.

As energy reserves shrink, the demand for electricity outstrips supply and over-dependence on imported oil and gas increases, South American governments are looking to diversify their supplies. Growing political pressure to localise power supply in Bolivia, Mexico, Costa Rica and Brazil has made significant profit margins possible, and Econergy estimates the average returns on its projects in those countries to be about 20 per cent.

The group has already bought several wind farms in Bolivia, Mexico and Chile, and confirmed on Friday it had acquired its fourth renewable energy project in Latin America. The 18 megawatt Pedro do Sal wind project in Piaui, Brazil, is expected to cost around $51m (£25.4m), but it has already struck a deal to supply the state electricity company Electrobras for 20 years.

A word of warning. Historical volatility has shown there are considerable political uncertainties and risks in the area. The market will be watching intently to see how well it succeeds.