trading at reduced prices, providing a period of added value for investors.

The lower prices for stocks may reflect uncertainty in the market, according to a Bermuda Investment Advisory Services Ltd. (BIAS) analyst, Mr. Mark Melvin.

Mr. James Masters, executive vice president for the Bank of Bermuda agreed that it was the state of the economic climate that caused a stagnation in share price.

Mr. Melvin has pointed out that the recent slide in the prices of local stocks has meant that several securities that were at one point trading at, or considerably above book value, are now trading at some of the cheapest levels seen for quite some time.

Examples include Bank of Bermuda, which yesterday traded at $18.125. It has meant a premium to the book value of around 20 percent. The share price, however, had been trading as much as 40 or 50 percent above book value.

Bank of Butterfield has traded as low as $10.50, which places it at 80 percent of book value. Dividend yield at this level is nearly five percent.

Until recently, the stock hadn't traded as a discount to book value for a couple of years.

The analyst said Telco has traded as low as $35, which makes it look inexpensive relative to the book value, and increases its already good dividend yield to above six percent. He said that it last traded at $36, which is still inexpensive for the stock.

And Belco recently traded at $19.75, pushing its dividend yield above 5.5 percent.

Mr. Melvin, who provides analysis of trends in the stock market for BIAS clients said: "The Independence discussions have obviously had some impact on the direction of local prices and may well continue to effect short term price fluctuations.

"However, for the longer term investor this could well create some fine buying opportunities.

"The whole point is that you can't get too gloomy about the shape of the local market. What's happening is that the shake-out is actually making some stocks positively attractive.

"If you hold on to your cash and keep your eyes open in the next few days, weeks or months up until whatever happens, happens, later in the year, then you might see these things drift off even more.'' Mr. Masters said: "There are two components which influence the price of securities. One is the performance of the company and how it is doing overall and the second is the general economic background.

"The first is important because the ongoing earnings, and the potential for improvement in earnings is what keeps the stock prices moving up. And that's obviously related to the second part, the general economic climate.

"A company has to be in a favourable economic climate for it to be able to continue to provide improved earnings. It is probably not the first of those two that are causing a problem.

"For example, we said in our last shareholders' letter that our performance we expect to be good, not as good at this stage as our record year last year, but a good solid performance. I think that's true of the other companies as well.

"What's behind it is the general economic uncertainty and the lack of willingness of investors to continue to invest here, based on the uncertainty, which is primarily being caused by the debate on Independence.

"So I think that it is a holding back of investment funds by traditional investors and savers, which is accounting for the downturn in all of these prices.

"For the brave investor who can see the future in a positive way, it is a very opportune time to step in.'' BANKS DECLINE -- Graph shows the Bank of Bermuda (dots and dashes), Bank of Butterfield (dashes) and Bermuda Commercial Bank (dots) price declines as a percentage of their price on November 1. -- Bloomberg