The Bermuda Stock Exchange (BSX) plunged to its lowest level in more than six years after the share price of Butterfield Bank fell 14 percent yesterday.

The BSX index of domestic public companies fell 131 points, or 5.7 percent, to close the trading day on 2,166.58 — hitting a low not seen since November 2002. The index is down 10 percent for the week.

Yesterday's fall continues a slide which has seen the BSX index slide by just shy of 60 percent from its all-time high of 5,382.06 on July 25, 2007 and is a reminder of how quickly the economic downturn has wiped out hundreds of millions of dollars off the value of Bermuda's traded companies.

As Butterfield Bank is by far the largest domestic company listed on the BSX, any downturn in its fortunes has a major impact on the index.

Yesterday the bank's share price slid 75 cents to close on $4.50, completing a fall of 18 percent for this week. The bank has now lost 56 percent of its market value this year.

Butterfield has suffered from the impact of the US housing slump through investments linked to American mortgages. In the fourth quarter of last year, the bank took a $121 million charge relating to the fall in the value of such investments.

Last month, Butterfield announced a $200 million capital raise through the sale of preference shares guaranteed by the Government. This will provide it with a "capital buffer" that will ensure the bank can withstand a serious economic downturn, according to "stress tests" carried out by financial regulator the Bermuda Monetary Authority.

The bank's chief executive officer Alan Thompson, as well as BMA CEO Matthew Elderfield, have stressed that customers' deposits held in the bank are safe.

Other local companies have seen hefty falls in their share prices this year as well. Bermuda Commercial Bank has fallen 34 percent since the end of 2008, while insurer and pension provider Argus Group has slumped 23 percent, and energy company Belco Holdings has tumbled 17 percent.

The BSX has lost more than a third of its value this year.

Meanwhile, US stocks rose again yesterday to complete their biggest four-week gain since 1933.

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