drove the two stocks to record highs yesterday on the Bermuda Stock Exchange (BSX). Analysts attributed the gains to record profitability announcements at both banks.

There was both local and overseas interest in the stock, according to Lines Overseas Management president Brian Lines.

"What can I say? It's a bull market,'' Mr. Lines said.

Trading in bank stocks pushed the BSX to a record high of 1,539.76, a jump of 62.30 points on a volume of 30,292 shares valued at $572,714. The jump was the second largest since the index climbed a record 68.09 points on August 13, 1997.

Lines Overseas, First Bermuda Securities, Bermuda Commercial Bank, Bank of Butterfield and Bank of Bermuda were all involved in the trades.

Most of the trading activity centred on the Bank of Butterfield which reported record profits of $20.2 million for the first half of its financial year to December 31, 1997.

The stock gained 75 cents to close at $16.75, on a volume of 21,949 shares.

The bank finally popped through its previous high of $16.38 with a trade of 200 shares at $16.50 just after 3 p.m. yesterday. A few minutes later Lines Overseas bought 10,000 shares at $16.75.

The market rose to an offer price of $18 with no takers, and finished the day with a offer of $17.50 and a bid price of $16. The bank's shares reached a low of $8.75 in March 1997.

Meanwhile Bank of Bermuda stock rose $2 to close at $34, a gain of 6.3 percent. Trading started early at 8.45 a.m. with Lines Overseas putting through a cross-trade of 5000 shares at $33. At 9.23 a.m., Bank of Bermuda put through a trade to buy 343 shares at $34 from Lines Overseas.

An offer of stock at $45 was made at 4.14 p.m. but that was later withdrawn.

Trading ended with a bid of $34 and no offers.

Mr. Lines noted that with the price rises, investors were becoming more reluctant to sell their holdings in the banks. People were expecting more gains to come.

"Everybody is trying to buy stock and nothing is for sale,'' he said.

The bank's stock previously traded at a low of $16.38 in January 1997.

The bank's warrants also rose 25 cents to a record high of $8 yesterday. Bank of Bermuda announced record profits of $27.4 million for the first six months of its fiscal year ended December 31.

Investors snap up stocks Bank of Bermuda accounts manager Kurt Ming said it seemed individual investors wanted to buy into both banks at the same time.

"There is a lot of good news out there,'' he said. "A lot of investors don't want to miss the boat. It's a snowball effect.'' He cited record earnings by both banks and the announcement by the Bank of Bermuda it would be seeking a secondary listing on the Nasdaq exchange as reasons for investor interest.

"They are thinking that once the stock is listed, the overseas wheelers and dealers will push the stock up,'' he said.

Mr. Ming also said there was a lack of available bank stock for sale now that prices were rising.

He believes the Bank of Butterfield stock could eventually hit the low to mid-$20 range if its fundamentals are compared with the Bank of Bermuda's.

"Now I have to try and convince my clients to buy other local stocks,'' he said.

He cited Argus Insurance, Belco Holdings, BF&M preferred, as his recommendations among local stocks that are selling for a good price.

Argus Insurance closed up 25 cents at $17 yesterday.

Graph: Bloomberg INDEX RISES -- Overseas investors' purchases of local bank stocks helped drive the Bermuda Stock Exchange Index up 62.3 points to a record 1539.76 yesterday.

BUSINESS BUC