The Bermuda Stock Exchange is encouraging more secondary listings in a bid to make up for the loss of trading volume seen after Bank of Bermuda listed on NASDAQ.

The volume of trades on the BSX has dropped dramatically since Bermuda's largest bank launched on the NASDAQ, and has left the exchange even more volatile and amounts traded varying from nil to tens of thousands.

But last week the BSX's chief executive officer Greg Wojciechowski said that the exchange was looking to other areas of business to keep it afloat.

“Whilst we have seen some reduction in the number of trades or the volume of trades in the local context we have certainly seen an increase in the number of companies using the listing service and the exchange so that it is a balance,” said Mr. Wojciechowski.

And he said the hedge fund work and the Mezzanine Market on the BSX were also doing very well for the exchanges business.

Speaking at the launch of White Mountains Insurance's secondary listing on the BSX last week, Mr. Wojciechowski said that there were other insurance companies who could secondary list with the exchange in the near future.

The original insurance companies to secondary list were ACE Ltd. and XL Capital but in the past year and a half it has gone up to eight - IPC Re, Scottish RE, Partner Re, Max Re, Montpelier Re and now White Mountains.

“We have been working hard for the past 18 to 24 months to target insurance companies to get them to consider a secondary listing to emphasise or to re-emphasise their commitment to developing Bermuda as the prestigious international business centre and to continue our positioning as the leader in the insurance industry,” added Mr. Wojciechowski.”We have had great success in that period. Over the past 12 to 18 months we have seen the number of insurance companies come up to eight from when we started when it was two.”

He said that it had been good there was more and more interest coming from companies in the insurance sector who were asking questions about secondary listings on the BSX. Mr. Wojciechowski said that building the number of listings was good for the BSX and the additions would also help build the number of constituents on their insurance index.

“You may recall that the insurance index is an index compiled by the BSX that provides the market with a bell weather,if you will,of the performance of those companies as a group,” he said.

And he said it was of benefit to the companies as it gave them a secondary listing on a national stock exchange of Bermuda and therefore firmly establishes their connection with Bermuda as well as providing them with an alternative trading venue should they need it.

“It really does show that they are committed to being part of the Bermuda business community - and there is not a doubt in my mind that they are - but it is a way of publicly stating that,” he said. “And quite frankly from the exchanges side it helps us develop this particular sector.”

He said that the exchange's business had been driven by trading volumes, but was now changing to move into other sectors.

“One of the things about the exchange, from a commercial perspective, is that it derives its business through trading volumes,” he said. “Most of the larger exchanges do see revenue generated that way, but also by listing services is another way exchanges can go.

“We are losing some of that transaction activity and seeing continued growth on listing and other services we provide.”

He said that it was difficult to increase liquidity in the exchange as there were a number of small shareholders in a lot of the local domestic companies that make up the BSX.

But he said the modernisation of the exchange and the enhancement of their operational systems improved matters.

“For example the implementation of the Bermuda Securities Depository where we de-materialised share certificates, that makes trading easier and down the road should create cost efficiencies in trading across the exchange, that will help develop liquidity,” he said.

“Also continue to have public awareness seminars so people understand the opportunities that are available in investing in Bermuda companies and see perhaps investing in those companies as an alternative or even just as a diversification of their current portfolio.”