The Bermuda Stock Exchange broke all records last week after the index soared though its all time high and traded nearly four times the normal volume.

The boom came after speculation that 60/40 ownership rules which restrict foreign investment could be relaxed by Government and a subsequent buying frenzy of Bank of Bermuda shares.

The index has been creeping up for the past month, but on Tuesday broke its all time high of 1,733.5931 set on May 22, 1998 by 11 points.

In a remarkable week of multiple gains, the index broke its all time high by more than 62 points to close at 1,764.66 on Friday.

The Bermuda Stock Exchange also had a record week of trading when $4.4 million worth of shares changed hands -- four times the normal rate. The index in an average week trades between $750,000 and $1 million in a single week.

The flurry of activity has been spurred on by Minister of Finance Eugene Cox last month announcing that the Government is considering relaxing the strict ownership rules which only allow 40 percent foreign investment.

Speculation on this relaxation has pushed stock from Bank of Bermuda, which wants exemption from the rules to list on the NASDAQ, up to an all time high of $40.50, after languishing at around $28 for most of the year so far.

Over 75,036 shares at the bank changed hands last week, when stocks gained $1.50 overall. This amounts to roughly $3 million in shares being bought and sold.

On Tuesday the index gained 16.3 points to tip it over Monday's close of 1,728.7, just points short of the record.

On Monday the burst had come after the Bank of Bermuda shares reached its all time record high of $40, which was surpassed on Thursday's trading at $40.50.

On Monday, 36,124 shares in the bank were traded. It was the first day of trading after the Bank announced record profits on the previous Tuesday as the exchange had been closed for Cup Match until the Monday.

The bank's shares had last hit $40 in 1998, after the last time speculation that the bank's 60/40 restrictions would be lifted.

But a private member's bill to exempt the bank was rejected in the House of Assembly and the price of shares plummeted. Since speculation renewed, the price of shares has shot up.

Currently the bank is restricted in foreign ownership, but Henry Smith, the bank's president and CEO said that to raise additional capital the bank needs more investment from abroad. He says if the shares are floated on the NASDAQ 60/40 ownership cannot be guaranteed.

The bank has felt that its share price is undervalued and that taking the business onto the NASDAQ would raise it.

If the bank's share price continues to rise, then the index will also rise as the bank has a strong weighting in the index.

Bank of Butterfield shares have also been edging up, but not at the same rate.

This week they rose to $17, but have recently been trading for as much as $18.75 when the bank said it was also in discussions to have an exemption from the 60/40 rule.

Bermuda's third bank, Bermuda Commercial Bank, has also seen shares rise slightly in past few months from $5 to a new 52-week high of $7.50.

Chart: Page 14 BUSINESS BUC