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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: S. M. SAIFEE who wrote (3255)	8/8/1999 11:11:00 PM
From: LLCoolG	Respond to of 10027

$10 per trade

To: S. M. SAIFEE who wrote (3255)	8/9/1999 12:29:00 AM
From: Gary Korn	Respond to of 10027

Thursday July 22, 10:49 pm Eastern Time INTERVIEW - Knight/Trimark sees slower growth rate By Jack Reerink NEW YORK, July 22 (Reuters) - Knight/Trimark Group Inc.(Nasdaq:NITE - news), the biggest market maker on the Nasdaq exchange, expects slower growth with the nine-month bull market in stocks pausing, Chief Executive Ken Pasternak said on Thursday. ``If you look at first quarter versus fourth quarter, we grew over 50 percent in volume. That is not a realistic intermediate-term growth rate,' Pasternak told Reuters in a telephone interview. ``The growth rates we're seeing now -- we might grow 5 to 10 percent quarter-over-quarter -- are much more reasonable.' Knight/Trimark, which is based in Jersey City, N.J., makes markets in 7,100 stocks by offering to buy and sell the securities at posted prices. The firm, like other market makers, earns money on the difference, or spread, between what it pays for the stocks (the bid) and what it sells them for (the offer). (See bottom of this post for confirmation of the $10 figure) The firm on Wednesday said its second-quarter profits jumped to a record $50.2 million, up from $11.7 million in the year-ago quarter and up 34 percent from $37.4 million in the first quarter. Revenues rose to a record $224.0 million, up from $80.6 million a year ago. The firm processed an average of 340,454 trades a day in the latest quarter, up 138 percent from a year ago and up 11 percent from the first quarter. The firm processes, or executes, a big part of the 575,000 trades a day investors funnel through the Internet, and has grown with the wild popularity in Web trading. ``We are certainly coming off a six-to-nine-month period where we've had tremendous growth, and now we are coming to a more normal growth context,' Pasternak said. ``We're not pessimistic. We think the market is resting a bit but that the long-term trends for growth are healthy.' Knight/Trimark still is growing at more than double the growth rate of Nasdaq's share volumes, Pasternak said. The firm had a 17.5 percent market share at the quarter's end, up 7 percentage points from a year ago, he added. Pasternak was unfazed by the advent of electronic communications systems (ECNs), or systems that anonymously match stock orders for a small fee. The ECNs have taken market share from traditional exchanges and middlemen such as market makers or specialists, as they are called on the New York Stock Exchange. ``My wife has said if I believed all that scuttlebutt, I'd be selling the house, you guys should be out of business by now,' Pasternak quipped. Knight/Trimark has grown faster than all the ECNs combined in the last six months, he said. ECNs have mushroomed over the last two years and have some powerful backers. Just Wednesday, top mutual fund company Fidelity Investments and leading discount, Internet broker Charles Schwab Corp.(NYSE:SCH - news), investment bank Donaldson Lufkin & Jenrette(NYSE:DLJ - news) and market maker Spear, Leeds and Kellogg said they would start ECNs. To hedge its bets, Knight/Trimark last year put less than $1 million in an ECN called Brass Utility, or Brut, Pasternak said. Since then, securities firms Merrill Lynch and Co. Inc. (NYSE:MER - news), Morgan Stanley Dean Witter & Co. (NYSE:MWD - news) and Goldman Sachs Group Inc. (NYSE:GS - news) also have bought into Brut, reducing Knight/Trimark's ownership to about 14 percent, he added. ------------ FYI, Merrill's research does confirm that NITE makes just about $10 per trade on average: ú Order flow dominance and strong risk mgmt processes improved revenues to $10.09 per trade in 2Q from $9.55 in 1Q.