The London Stock Exchange's Alternative Investment Market, which targets startup firms, aims for as many as 10 Japanese companies to debut by the end of 2008, even as the global credit crisis limits listings worldwide.

"We expect three to four Japanese companies to come to the market in the second quarter," Naomitsu Abe, senior manager at the LSE in charge of developing business in Japan, said in an interview Tuesday. That may increase to 10 by year's end, he said.

Listings by U.K.-based companies on the London exchange's startup market have declined, as a record number of initial public offerings were canceled in the first quarter amid falling stock prices, a survey by Ernst & Young LLP shows. AIM also faces competition from new electronic trading platforms.

"We are still in a difficult situation, and I can't see any signs of an improvement," said David Davies, head of corporate finance at KBC Peel Hunt Ltd., a securities company in London that helps Japanese firms list on AIM.

AIM raised £5.5 billion in new capital and brought 77 new overseas companies to the market in the nine months to Dec. 31, according to the LSE's Web site. The startup market had 1,347 U.K. companies listed at the end of December, down from 1,353 three months earlier, while the number of overseas companies rose to 347 from 329.

The AIM exchange attracts overseas companies partly because disclosure requirements are less restrictive than for the LSE and firms do not need to demonstrate three years of audited financial statements and maintain minimum market capitalizations. The exchange itself supervises the companies.

Only one company incorporated in Japan, Tokyo-based Secure Design KK, is listed on AIM. Three investment funds that target Japan for their main business and are incorporated elsewhere are also on the exchange.