Factors favour smaller companies, says Gartmore manager

A key indicator of the optimism in the sector is the number of new issues, he says. There have been some 85 issues so far this year, including 16 in June alone - about 80 have been on the Alternative Investment Market. A number of existing firms, such as Corus the steel maker – which has made its way out of the small caps because of its share price recovery - and Baggerbridge Brick are benefiting from strong pricing power in the current market. Their ability to increase prices stems partly from under-investment and a protracted process of mergers and acquisitions over the past 15 y...