An increase in the average amount raised by small companies on the Australian Securities Exchange (ASX) in the first half of this calendar year could indicate an improvement in investor confidence, according to financial planning and accounting firm HLB Mann Judd.

Small companies - those with a market capitalisation of $100 million or less - raised $11.4 million on average through initial public offerings (IPOs) in the first six months of 2009, up 52 per cent from the $7.5 million reported in the first half of 2008 and up 29.5 per cent from the $8.8 million in 2007.

"I think it's an indication there is more appetite for risk in the investor market, which hasn't been there over the last 18 months as a result of the global financial crisis," HLB Mann Judd corporate finance director Geoff Webster said.

"It is far more difficult to get any underwriting [for small companies], and therefore it's a far more risky process for them than for the larger caps," Webster said.

"They have to be very certain that they have the underlying demand before they start the process."

Excluding property trusts and listed investment companies, a total of eight companies were floated in the six-month period and raised $90.9 million.

The number of companies that listed this year was far less than in previous years.

In the second quarter of 2009 only one company took the plunge into public waters, compared to 18 in 2008 and 71 in 2007.

Five of the listed companies were companies from the materials sector, representing $26.7 million of total money raised through IPOs.

Smaller companies have outperformed the general market this year.

The S&P/ASX 200 Small Ordinaries Index increased by 25.8 per cent, compared to a 9.9 per cent increase by the S&P/ASX 200 Index.

Webster expects small companies to continue to do well in the coming period.

"The small IPO market tends to be a cyclical market rather than defensive," he said. "The potential for them is to share in cyclical growth."