Trading of local companies' shares on the Bermuda Stock Exchange plummeted in 2002, falling 77 percent to 3.8 million shares from 16.7 million in 2001, the BSX reported yesterday.

The BSX said the decline was largely attributable to the listing of the Bank of Bermuda on the Nasdaq Stock Exchange last year, after which time very few of the bank's shares traded on the local exchange.

The bank's move and the subsequent slump in its stock price also affected the BSX/Royal Gazette Compsite Index, which dropped 17.43 percent to 2,240.40 during the year.

But the BSX did record an increase in listings during the year and also saw cross-trading volumes of international stocks rise.

"The Bermuda Stock Exchange is pleased to announce the continued increase in the number of new listings in 2002," said chief executive officer Greg Wojciechowski (pictured).

"Like so many businesses and world markets, the BSX has felt the impact of the global economic slowdown this year, however in spite of this, I am delighted to report that the BSX continued to see growth in our listing product.

" This sustained growth clearly demonstrates a healthy niche-market that has been created and is being supported by the Bermuda Stock Exchange."

He added: "Whilst the BSX saw growth in the number of new listings, domestic trading volumes and the index value fell compared to 2001. The decrease in trading volume can be attributed to the shift in the bulk of trading in the Bank of Bermuda's stock from the BSX to the Nasdaq market.

"In addition, the BSX/RG Composite index, which is weighted on a market capitalisation basis, was directly impacted by the decline in the market price of the Bank of Bermuda, as this security constitutes approximately 55 percent of the overall index valuation."

But Mr. Wojciechowski said local investors who did not hold Bank of Bermuda shares made money last year.

"Despite the overall decline in the index, the broad market, excluding the Bank of Bermuda remained stable over the last year, modestly advancing 1.69 percent."

The BSX International Crossing Market recorded an increase in volume on a year on year basis, rising from 10.6 billion shares to 14.2 billion in 2002 with a share value of $413.7 billion in 2002, the BSX said.

The BSX ended the year with 34 more issuers on the BSX.

New listings included one domestic issuer, three Bermuda-registered insurers listings on the international secondary market and 71 collective investment schemes.

The BSX also reported that it continued to expand the Bermuda Securities Depository (BSD), the Exchange's fully electronic clearing, settlement and depository service.

"At year-end, seven securities had been made depository eligible with over 75 percent of the transactions executed on the BSX being settled in a book-entry fashion within the BSD.

"Once all listed domestic securities have been made depository eligible, the Exchange will have completed its operational build-out, punctuating its commitment to introducing and maintaining international securities market standards in Bermuda."