Bank of Bermuda stocks have soared in price -- going up 26 percent in just one week after the Government said it could relax 60/40 ownership rules.

And the bank reached a new 52-week high when stocks touched $36.50 and traded over $1.5 million in stock. Before this week the previous year high had been $35.00.

This combined with a rise in the number of bank shares in circulation because of a bank warrant and share exchange scheme has pushed the Bermuda Stock Exchange index up by 179.92 to 1673.96.

The meteoric rise in the price of shares started at the beginning of June after controversial statements made by the bank's president and chief executive officer Henry Smith when he implied the company could consider leaving the Island.

Despite Mr. Smith's claim that his comments were taken out of context, the debate on the 60/40 issue had been reopened. Share prices started to edge up to $29.50 after lolling at $28.00 for months.

For two years the bank has been seeking an exemption from the rule that means that 60 percent of the bank has to be owned by Bermudians.

Mr. Smith and the board say that to raise more capital the bank would have to get more investment from abroad.

The bank also wants to float stock on the Nasdaq, and says it cannot guarantee 60/40 ownership if it does this. There is also doubt about whether the Nasdaq would allow the bank to float stock with the ownership rule in place.

The bank has said all along that its share price was undervalued, and that taking the company onto the Nasdaq would be good for shareholder value.

In the on-going debate on Friday 23, The Royal Gazette reported a spokesperson from the bank saying the bank would remain headquartered on the Island, but refused to say whether they would move any of their operations elsewhere.

The next day of trading the shares rose $1.75 -- or 6 percent -- to $30.75.

But they once again dipped back to $29.00.

On the eve of Mr. Cox's speech in Paris, the 60/40 issue hit the headlines again in the on-going telecommunications wars, and prices rose to $31.00. On the last day in June The Royal Gazette reported that Mr. Cox said that the Government was considering removing the 60/40 regulations which limit the foreign ownership of companies. The bank's share price soared on the next day of trade to $32, then $33.75 and on Wednesday rose a further 11.5 percent or $3.75 to $36.50.

By the close of trading on Friday, shares had fallen by 50 cents to $36.00, but last week overall saw a massive $1,655,826 worth of shares trade hands -- a total of 57,475 shares.

The weekly increase was $5.00 -- or 16.13 percent. The lowest bid for stock was $32.75. The share's 52 week low stands at $25.91.

The change to the Bermuda Stock Exchange index comes after the BSX's regular six month review, which adjusts the index in line with changes.

Normally the adjustment has little impact on the index, but because of the hike in the bank's share prices and the increase in volume of share, the rise was dramatic.

Of the points, 96.36 of the rise can be attributed to an increase in share price -- and the BSX said it was particularly affected by the Bank of Bermuda hike in price.

The balance, 80.53 points was due to outstanding bank shares being taken over by holders of Millennium Warrants exercising their rights to trade them in for common shares on January 30.

In a statement from the BSX announcing the shift in the index, a spokeswoman said: "Normally such adjustments have little impact on the index, however in this period there was a substantial rise in the number of outstanding shares in the Bank of Bermuda due for the most part to the bank's Millennium Warrants being exercised.