Ireland's banks need 31 billion euros in capital after "appalling" lending decisions left the country's financial system on the brink of collapse, Finance Minister Brian Lenihan said last month. Bank of Ireland said its plan will help raise a total of 2.8 billion euros after expenses and buying back state warrants.

"There may be some disappointment at the dilution, but it's well anticipated and overall the transaction terms look attractive," said Sebastian Orsi, an analyst at Merrion Capital in Dublin. "The money has been effectively raised now. I'd expect a good level of take-up of the rights."

Here is a section from the latter:

Yesterday, Citigroup analysts Aynsley Lammin and Clyde Lewis said that despite a difficult outlook for CRH's private non-residential US exposure, there was "increasing evidence" that the economy there was turning more positive. CRH generates almost 50pc of its turnover and profits in North America.

Forecasts
Citigroup added that CRH has one of the strongest balance sheets in the sector and was well placed to "lead the next phase of consolidation in the sector". The analysts also slightly increased their earnings forecasts for CRH.

Eoin Treacy's view Ireland's stock market index was heavily weighted by banks and financials prior to the credit crisis, so much so that the country's only sector index is for financials. The sector fell 99% from its 2007 peak and shows every sign of now forming a lengthy base. This process could take years as long positions are unwound and shares are diluted by rights issues. Such has been the extent of the decline relative to the peak that a log scale chart is probably more suitable for anything other than a short-term chart analysis.

The sector found support in March 2009, bounced emphatically and continues to consolidate below the September high near 2500. The overextension relative to the 200-day moving average has been unwound, but the MA continues to trend downwards and the sector has yet to sustain a move back above it. In the short-term, a sustained move below 1000 would be required to question scope for some additional higher to lateral ranging. We will not be able to say with any degree of confidence that the base has been completed without a sustained move above 2500. However, common characteristics of any base are the possibility of large percentage moves, high volatility and an inability to sustain upward breaks. This suggests that the least risky time to purchase Irish financials, if one were so inclined, would be once they have found support following occasional medium-term setbacks.

While the Irish economy has been lumped together with some of the worst performing Mediterranean's, the Irish stock market is not currently behaving in the same manner as those of Greece, Spain and Portugal. Because of the relative demise of the financial sector, now less than 10% of the Index, companies with an export bias dominate the ISEQ. The Index is currently testing the upper side of the 6-month range and a downward dynamic would be required to question potential for a successful upside break. A sustained move back below 2750 would be needed to limit medium-term upside potential.

CRH broke back above €30 last week and in the process completed the 18-month base. The share has posted a progression of mostly higher reaction lows since July 2008 and these would need to be taken out to question scope for further upside over the medium term.

Ryanair bottomed in October 2008 and broke upwards to new recovery highs at the beginning of April. A sustained move back below €3.60 would be required to question scope for further higher to lateral ranging.

Kerry Group has been among some of the better performing processed food companies globally over the last year. It broke upwards to new all-time highs in February consolidated above the high and remains in a consistent step sequence medium-term uptrend. A sustained move back below €22 would be required to question scope for further medium-term upside. (Also see Comment of the Day on February 19th).

Elsewhere in the Irish food sector, Glanbia has been forming a base since December 2008 and completed it in early April. It would need to sustain above back below €3 to question scope for further upside. Aryzta remains in a consistent medium-term uptrend and would need to take out the progression of higher reaction lows to question scope for further medium-term upside. Fyffes continues to consolidate between 35 and 50¢ and is currently retested the lower side of the range. It needs to sustain a rally back above 40¢ to indicate a more sustained bounce is underway.

DCC broke back above the 200-day moving average a year ago and remains in a relatively consistent uptrend. It found support in the region of the MA in February and broke upwards to new recovery highs two weeks ago. A sustained move back below the MA would be required to question the consistency of the overall uptrend.

Dragon Oil broke upwards from its base a year ago and consolidated mostly below €5 from June. It reasserted the medium-term uptrend in February and would need to sustain a move back below €5 to question scope for continued higher to lateral ranging. .

The performance of the above shares suggests that while the Irish market sustained a crushing blow with the collapse of the financial sector, that export led companies, particularly those in the food sector are leading the market higher. The falling value of the Euro as well as the deflationary effects of Ireland's recession should help contain domestic costs while the recovering global market may offer the opportunity to increase margins. The Irish market appears to be relatively well positioned to play catch-up with some of the better-performing developed markets over the medium-term.