Challenging Global Economic Conditions Impact Domestic Market Performance. BSX Sees Traction with Insurance Linked Securities.

Hamilton, Bermuda - 8 January 2010 – The Bermuda Stock Exchange (BSX) reported today that the impact of global economic slowdown has created a challenging commercial environment for domestic companies resulting in most share prices ending the year at lower levels. The BSX’s listing business has remained buoyant and the BSX has made continued progress in entering and supporting the Insurance Linked Security space.

The total market capitalization of the BSX as at 31 December 2009 (excluding fund listings) stood at over $225 billion of which approximately $1.4 billion represented the domestic market.  Total trading volume for the period was 5.7 million shares with a corresponding value of $50.9 m compared to 7,397,732 shares with a corresponding value of $101.5 m for 2008.

The RG/BSX Index closed the year at 2072.41 which is 39.35% lower than 2008.

As at 31 December 2009, 670 issuers were listed on the BSX. Included in the new listings were the Variable Note Programme of Montana Re and the common shares of Ram Re, underscoring the BSX’s commitment to provide market support to Bermuda’s insurance industry. The Exchange also listed a further 11 international derivative warrants originating from a division of CALYON.  There were also 55 new collective investment vehicles listed and 5 subsequent issues processed during the year, including the HSBC Holdings Rights Issue.

Noteworthy in 2009, was the placement of the country’s largest ever initial public offer (IPO) with Butterfield Bank raising $200m largely supported by Bermuda based investors.  Commenting on the offer, BSX Chief Compliance Officer, Mr. James McKirdy said “The BSX was delighted to support the operational requirements of the Bank in seamlessly settling the IPO into the Bermuda market and providing an aftermarket trading platform through the BSX the day immediately following that settlement.  In addition, we were surprised as were many at the subsequent turnover of the issue in the aftermarket.  This resolutely underscores that the domestic capital market works and that Bermuda based investors have an investment appetite for well structured and regulated investment opportunities”

In 2009, the BSX made significant changes to its data dissemination capabilities by upgrading the backbone of its website thus making additional data on BSX listed issuers available including a ticker feed of trading prices.

In making the year-end announcement, BSX President and Chief Executive Officer Greg Wojciechowski stated, “2009 continued to be a challenging year in the global financial markets. 

Encouraging was the gradual thaw of the credit freeze and positive response in the world’s equity markets, that said those supporting the capital markets still have work to do to ensure that fortified backstops exist to prevent a repeat performance of this market dislocation while remaining ever so careful not to create an regulatory environment which may stifle rather than nurture the sparks of innovation that will ignite future global economic growth.”

He went on to note “In respect of Bermuda, significant work has been undertaken by stakeholders to ensure that Bermuda’s regulatory and operating infrastructure remains in line with international standards and changes are made when and where necessary to strengthen this foundation, firmly anchoring Bermuda’s position as the premier offshore international financial center.   No development better illustrates this point and Bermuda’s commitment to transparency and international cooperation then in April when Bermuda was the first country to ascend from the Organization for Economic Cooperation and Development’s (OECD) “grey list” to its “white list” of jurisdictions which have substantially implemented internationally agreed tax standards.” 

In closing he stated, “I have every confidence that the hard work that has been done in Bermuda to create a commercial and regulatory environment that supports innovative business transactions and solutions will be rewarded by the markets through an increased flow of new business to the jurisdiction.”