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Richard Feigen, MD of broker and nominated adviser Seymour Pierce, says that there may be more trouble ahead for AIM stocks. ‘The beginning of 2008 will be quite painful, with a lot of blood on the floor, but the market will turn during the year, and possibly early in the year,’ says Feigen, whose firm is broker to 93 AIM-listed companies.

Referring to the liquidity crisis, Feigen continues: ‘The bad news is already in the market. That doesn’t mean the economy won’t continue to see slowing growth and possibly recession. But markets are looking ahead, and have already priced this in.’

Feigen adds that the risk-aversion of investors, who have moved ‘out of growth companies and into blue-chips’, is a normal phenomenon at this stage of an equity market cycle. However, he points out that ‘the large caps are catching up’, with large falls in FTSE 100 companies heralding the next stage in the cycle.

Rosemary Banyard, who co-heads the small and mid-cap team at investment group Schroders, shares Feigen’s outlook of qualified optimism. She points out that the credit crunch will not have an equally devastating effect on all companies.

‘It’ll be tough out there for anyone who’s got lots of debt, whether they are an individual consumer or a company,’ she says. ‘But if you have great finances, and are selling internationally, you should be fine.

‘The stockmarket has not distinguished very well between well-capitalised and debt-ridden companies. The fact that a lot of small companies have come down in price in the last few months throws up value and opportunities.’

Rosemary Banyard and Richard Feigen both appear in Business XL’s Power Top 50, the magazine’s annual round-up of the 50 investors, entrepreneurs and advisers every growing business should know. Click here to find out more.

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