NEARLY half of small company investors are shunning the junior stockmarket.

The Alternative Investment Market, which two East Lancashire firms are listed on and a third is set to join, is snubbed by many investors because of high profile problems with a handful of companies.

A survey of more than 100 investment institutions found that many worried about AIM's reputation and a third felt performance of AIM companies had been poor. But accountants KPMG who carried out the survey, said investors were missing out on the opportunities AIM offered.

"Fund managers have tarred the entire market with the same brush that has been applied to the small number of AIM companies that have got into difficulties," said Andrew Kitchingman, the firm's finance partner in the North West. "They risk missing opportunities as AIM has proved to be a very effective stockmarket nursery for a substantial number of good quality, high growth companies."

Inter LInk Foods, the firm behind Crossfield Foods in Blackburn, last week unveiled plans to float on AIM to raise more than £2 million for further expansion. Blackburn-based spectacle manufacturer Crown Eyeglass has been one of the longest serving members of AIM.

But TDS CIrcuits, another Blackburn member, saw its share price fall by more than half earlier this year after issuing a profits warning. It had previously been one of the market's star performers of recent years.

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