analyst said, because the activity is driven from finicky overseas investors, more likely to get out of the Bermuda market as quickly as they came in.

But Bermuda Investment Advisory Services investment analyst, Mark Melvin, noted yesterday that the local economy, stunted by the lag in tourism, should get a significant jolt with major building projects on the cards.

He said, "The domestic economy, from my point of view, based on tourism is not doing very well. But all I have to do is walk past the Bermudiana, a $150-million hole in the ground, to feel a bit better.

"That's nearly 20 percent of the country's Gross Domestic Product, that will hit that hole in the ground in the next two to three years. Will there be economic expansion? Well, I guess so.

"The US is growing at two percent of its GNP (Gross National Product) a year.

And here we are talking about adding 20 percent. There are some huge projects coming up.

"And then, looking at international business. It's growth never seems to stop. The company incorporations continue to go up. International business is accounting for more than 50 percent of income coming into the country.'' But during a Bermuda stock trading cycle that is normally marked by inactivity, the BSX index has been enlivened with capital injections from overseas.

Mr. Melvin cautioned, "A lot of that interest from overseas may be temporary.

These investors are used to trading in and out of stocks left, right and centre. The kind of people who are creating the volumes now going across the exchange are the type of investors who are very active in moving in and out of securities very rapidly.

"Traditionally for Bermuda securities, people acquire shares and sit on them, to be pulled out 20 years later.

"The run up in the value of the stocks is certainly something that has been on the cards for a very long time. When the US markets were racing through the roof during the last two years, investors took the view that the market was high and questioned whether it would go further.

"They look around for the next hot place to go and lo and behold, there's little Bermuda, where they find maybe half a dozen small, but very decent businesses.'' He added: "They look at the multiples and the fundamentals underlying those stocks and they think about how US banks are trading 2.1 times book, and the bank of Butterfield was trading at 75 percent times book. "And they come storming in to buy shares. It hasn't surprised me that it happened, but rather how long it took to happen. And it is great for the local shareholders.

"Does it mark a permanent shift in the way local securities will be traded? Who can say? But those who are buying in, large overseas investment fund companies, are not likely to retain that position. That market is likely to be fickle, and largely dependent on people who are overseas.'' The prices have risen quickly, because it is unusual to find large positions that can be taken with local securities.

Said Mr. Melvin, "If you wanted to build a large position in ACE, you could do it in a day. But you would have to go to the New York stock market. You could buy $50 million, a small amount on the float of ACE shares.

"Try to do that here and it could take months.'' Bermudian investors, who have sat on shares for a long time, watching the New York Stock Exchange go through the roof, are more likely to move to the sell side now. If a profit can be made, they may be more inclined to sell off long held positions.

Those with cash to invest have increasingly discussed with their local investment advisors a desire to look overseas. More people are opting for that route, after considering limited options at home.

Said Mr. Melvin, "Bermudians are finally waking up to the notion that the $25,000 per person investment limit means that a family of four can move $100,000 into an overseas investment.''