Investor/An insider's guide to the market: During April, equity markets enjoyed a welcome respite from the relentless declines that have plagued most markets over recent years.

In absolute terms, the rises in the broad equity indices were close to spectacular. This was particularly the case in Europe where the FTSE Eurotop 300 index, which includes Europe's largest quoted companies, rose by close to 11 per cent. This was the best European calendar month performance in well over six years.

The April rise in US markets was also very strong with the S&P 500 index rising by just under 8 per cent and the technology laden Nasdaq rising by close to 9 per cent. The April rise in UK and Irish equities was somewhat lower than the US and Continental European performances. Nevertheless, both the FTSE 100 and the ISEQ Overall indices each rose by about 6.5 per cent during April.

The catalyst for this broad-based equity market recovery in April was clearly the speedy end to the war in Iraq and the subsequent reduction in the price of oil.

Despite this April bounce, UK and European markets are still showing negative returns over the year-to-date period. For example, in the four months to end-April the FTSE 100 is down 0.3 per cent whilst the FTSE Eurotop 300 is down 3.5 per cent.

In contrast, US equity indices are now just in positive territory since the beginning of the year and the ISEQ Overall index is in fact up by 5 per cent so far in 2003. However, current index levels are still well below the all-time highs that most equity markets reached in late 1999 or early 2000. The S&P 500 index is still 40 per cent below its all time high whilst most continental European markets are trading at about 50 per cent of their peak levels.

Viewed in this light the market rise in April becomes far less impressive. It may well be the case that share prices had overreacted on the downside to geopolitical uncertainties and therefore the April bounce could turn out to be a one-off recovery that won't be sustained.

If coming months bring improved economic data and if corporate profits advance then equity markets may build on the April recovery heralding the end of the bear market.

However, the April bounce on its own is not sufficient to infer that the three-year-old equity bear market is now over.

Irrespective of global trends investors in the Irish equity market have benefited on a relative basis from the defensive characteristics of many Irish-quoted shares.

The table above shows the share price performance of a selection of leading Irish-quoted stocks. With the exception of Ryanair, the share prices of these companies have risen so far this year. CRH's share price rose by 17 per cent in the four months to end April while Bank of Ireland's shares rose by just over 12 per cent.

However, in the 12 months to end April the extent of the weakness in equity share prices over the past year becomes apparent. Of the selection of companies listed only Ryanair and Fyffes have managed to produce a positive return with modest rises of 1.8 per cent and 3 per cent respectively. Over the 12 months to end April, Irish Life & Permanent is down by 31 per cent while CRH is down by 28.6 per cent with Bank of Ireland's shares lower by 15.4 per cent.

In assessing the prospects for the Irish equity market, a key feature is the fact that Irish corporate profits have continued to grow at a healthy pace throughout recent years.

Therefore, the share price declines experienced by companies such as Bank of Ireland and CRH mean that they now offer attractive investment value. This is reflected in the price earnings ratio (PER) for the ISEQ index of 11.7 compared with 14.5 for the FTSE 100 and 19.1 for the S&P 500.

With the prospective returns from alternative investments such as bonds and cash at 40-year lows investing in company shares does now look relatively attractive.

It is probably the case that the market recovery in April has restored some badly needed confidence to equity markets. With some of the fear removed, investors are likely to refocus on the traditional valuation yardsticks for judging investment value such as the PER and dividend yield.

Judged by these criteria it is certainly the case that many well managed Irish stocks should deliver much better long-term returns than either bonds or property from current share price levels.

A reasonably benign global economic and political background would be a precondition for this to be translated into a sustainable rally in Irish share prices.

It will be several months yet before there is enough information to form a firm judgment on this. However, post the April recovery in share prices, the odds that the rest of 2003 may bring some cheer to long-suffering equity investors have improved considerably.