More than 100 companies joined the Alternative Investment Market (AIM) in the first quarter of 2005 - and corporate finance lawyers predict that the record-breaking run is set to continue.

Some 109 companies were admitted from January to March, raising £536 million. If this continues for the rest of the year, 2005 could eclipse 2004 - itself a record year - when 294 businesses joined.


The rush to market can partly be explained by companies trying to list ahead of changes to the AIM rules on 1 April, including a requirement that cash shell companies raise a minimum of £3 million on admission.


However, AIM specialists said the changes should not dent the market's momentum. Raj Karia, a partner at City firm Norton Rose, said AIM's decision to become an exchange-regulated market when the EU prospectus directive comes into force in the UK on 1 July was more significant.


He said: 'This should mean that the light touch regime which AIM has had should continue.'


Richard Hildebrand, a corporate finance partner at Trowers & Hamlins, agreed. He said: 'Companies with good strategic aims, backed by strong management, should easily be able to raise more than £3 million.'