The Bermuda Stock Exchange this week reported that domestic trading volume had dropped substantially during 2003, from 3.8 million to 2.8 million, worth a total of $50.8 million during the year.

But Greg Wojciechowski, BSX?s president and chief executive officer, said that all indications were that 2004 would be a better year.

?Indications thus far point to a commercially healthier 2004,? he said. ?And I have every confidence that our dedicated team of stock exchange professionals is in a strong position to support the continued development of the exchange and the domestic financial services industry to ensure that Bermuda?s reputation and us as the world?s premier offshore business jurisdiction is maintained.?

This is the second consecutive year of considerable volume drop for the BSX. In 2002 there was a severe drop in the number of shares traded domestically, with volume dropping 77 percent from 16.7 million in 2001 after Bank of Bermuda listed on the Nasdaq during the year.

But Bermuda?s only stock exchange put a positive spin on the year, saying it has seen ?sustained growth? in the number of new listings on the international exchange.

?The BSX is pleased to announce the continued increase in the number of new listings in 2003,? said Mr. Wojciechowski. ?This sustained growth clearly demonstrates the healthy niche-market that has been created and is being supported by the Bermuda Stock Exchange.?

The Royal Gazette/BSX index also reached a new record high during the year ? with the composite index ended the year at 2,965.34, up 33.55 percent compared with 2002.

Mr. Wojciechowski said: ?In addition, the BSX/RG composite index, which is weighted on a market capitalisation, closed at 2,965.34, an all time high, up 33.55 percent compared with 2002. This is, I believe, testimony to the value that investors place on keeping a component of their investment portfolio in Bermuda securities.?

The BSX International Crossing Market did not grow year-on-year, but stayed at the same levels of 2002 with 12.5 billion shares traded with a share value of $364 billion. He added: ?In respect of international trading volumes, our crossing market remained strong in 2003 and we have every reason to believe that this trend will continue.?

The total market capitalisation of the BSX as at 31 December 2003, excluding fund listings, stood at approximately $120 billion of which $2.9 billion represented the domestic market.

As at 31 December 2002, 383 issuers were listed on the BSX and included in the new listings in 2003 were: Montpelier Re and White Mountains Insurance Group that joined the exchange?s International Secondary Market. There was also one new international BSX Mezzanine Market company and some 16 collective investment vehicles listed in 2003.

In a release issued yesterday, the BSX said 2003 saw the continued development of the Bermuda Securities Depository, the exchange?s electronic clearing, settlement and depository service.

At year-end, nine securities had been made depository eligible with over 90 percent of the transactions executed on the BSX being settled in a book-entry fashion within the Bermuda Securities Depository.

By 31 March 2004 all BSX domestic listed securities will be made Bermuda Securities Depository eligible, which will complete the BSX?s change into an electronic exchange, said the exchange in the release.