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Gold/Mining/Energy : Capital Alliance Group - CPT (CDNX) -- Ignore unavailable to you. Want to Upgrade?

To: keith massey who wrote (13)	3/13/2000 3:34:00 PM
From: keith massey	Read Replies (2) \| Respond to of 960

It is not surprising to see other companies trying to grab a piece of this huge, relatively untapped market. I have done some research and already understand that Etrade and Paribas E-Cortal have expanded into Europe and that TD Waterhouse is presently attempting to expand into the Asian and India markets. I guess we can now add Charles Schwab to that list. Presently SEG has no direct competitor in that no other company is functioning as a portal business with stockbrokers. Emerging countries are very restrictive to foreign trade competition; therefore, there is no incentive for local brokers to partner up with newcomers in the same industry. A similar structure has been attempted with broker networks and referral programs but none have worked because each broker was afraid of having their clientele stolen away from them. Because SEG is partnering up and have non-competition agreements in the brokerage business, brokers welcome them with opens arms. TD Waterhouse, ETrade and now Schwab are trying to expand to foreign countries by attempting to partner with local brokers in joint ventures. However, since these joint ventures are still functioning as brokerages, they are limited to their respective markets. There are miles of red tape to do a single joint venture in a single country and it will be a very time consuming and costly venture for these groups to expand all the various countries that SEG is has already targeted. The beautiful thing about SEG?s business plan is that they are not doing a joint venture but instead are becoming a portal for the trade which means they can by-pass the miles of red tape and be the first to market. In addition, SEG is presently building strategic relationships and executing binding memorandum of understanding with leading brokers throughout in the Asian market place, which will also provide them with a competitive edge. Not only with SEG?s clients have access to the partners brokers trading facility, but they will also have access to the various trading and research reports offered by the various firms. Since these firms are already the leading brokers in their respective country these reports will be a valuable asset that likely cannot be provided right away by the competition. You may have noticed in the Charles Schwab news release that they will not have the basic facility operational until the fourth quarter of 2000 and then will roll out different countries in stages. You can expect similar delays with the other groups as they attempt to cut through the red tape. A little competition is good but in this case I think SEG has a competitive advantage and has the chance to become one of the major players in the foreign market service game. Best Regards KEITH

To: keith massey who wrote (13)	3/14/2000 7:27:00 PM
From: AriKirA	Respond to of 960

Might as well CC's post on stockhouse pertaining to the Schwab article... Good Evening Tom, I want to take a stab at addressing some of your questions. Would the rest of the world use Capital or go with an established name such as Schwab. I think that branding is important and Schwab does have a good name. That said, one of the features that has me sold on SEG's plans is that they will very soon be seen as BOTH a brand name portal and a portal to the regional brand name brokers throughout the globe. Their partners will be brokers from the best firms in their respective regions of the world. I believe that there currently are hundreds of brokerage firms in the world now, and SEG will be a marketing tool for many of them. I also am comfortable that there are parts of the world where Schwab (or other firms) are either not well known, or do not have a strong presence as yet. Building a brand name brokerage firm takes time and money. SEG does not have to do this. They will be focusing on building their portal brand name. I understand that a significant portion of their revenues will be directed at doing just that. One of the advantages of working with a diverse number of different firms around the world (rather than just one brokerage house - Schwab) is that SEG will also be able to provide their users with access to ALL of the client firms analysts' reports. They will not be restricted to just one firm's reports. This could soon become a huge database that will be seen as a tremendous value added service to those using SEG's portal. As a portal (not a broker) they also will not need to complete all of the regulatory forms to begin trading, or go through the long approval processes that go with that. Their business model is to establish a relationship with a few of the key brokers from the major firms in each of their designated target areas. Once they are confident that these firms can handle the volume and service their clients, they then sign the deal, and move on to the next exchange to do the same. This process will be a relatively fast one as opposed to the more established firms having to expand their International branch offices, etc.. I also believe that as SEG will not be a subsiduary of one or two major firms, the other larger firms will be more willing to do business with them than they would be if they were an arm of one of their major competitors - such as Schwab. The Asian exchanges are extremely fragmented and Capital will provide a huge opportunity for all Asian countries to inter-invest, but will anyone outside Asia use it. I sure will! A friend of mine is on a business trip to Thailand right now, and he has called me to rave about some of the opportunities he has found over there. We have some family friends who are teaching in Hong Kong, and they are coming home soon. I know he is an investor, and I bet he will be using SEG's portal to maintain his portfolio as well. I know of a friend who will be travelling to Mexico soon, and he is eager to find out when an Australian company is coming off halt so he can buy it at the open. I could go on here, but my point is that I feel that the more people understand the global opportunities that are presenting themselves, the more in demand this service will be. Capital also states that it has made arrangements with leading brokerage houses. I wonder how these houses are prepared to handle this extra volume. Once again, I believe that SEG will have completed a pretty thorough due diligence check on the firms, and in short order, they will have the depth of experience to be able to assist their partner firms with solutions that they have seen other firms employ in other parts of the world. Kind of a global help desk. Their system is already taxed to the maximum as witnessed by the recent TOM situation on the Hong Kong exchange. This was a demand surge that was specific to one exchange on one day. Whether you were a client of Schwab's, Morgan Stanley's, or Waterhouse's would not have mattered. Another parallal can be drawn by the situation in our own country. The Royal/TD/Scotia are almost completely broken down. I know that there are frustrations with many of the on-line trading firms, even Schwab is having its own problems(http://www.siliconinvestor.com/readmsg.aspx?msgid=13075969&s=schwab).. I see this as an industry wide issue that will be relatively short term problem (in the grand scheme of things) and it will rectify itself. Afterall, there is just too much money at stake. The only broker that can function seems to be Schwabb and perhaps the smaller banks. Will the added traffic render the Capital Alliance brokers useless. Who is to say that Schwabb doesn't become one of the brokers that SEG uses in selected markets. I see this as not a Win - Lose equation. Once again, SEG will be signing with some of the best brokerage houses in the world. Schwab is just one of hundreds. A big one mind you, but not the only one. As with the situation on the Vancouver exchange will Schwabb be able to enlist the services of like minded houses in other countries. I also believe that by being a portal who is not in bed with or owned by one of the Big firms, the other larger firms will be more willing to do business with them. After all, why would any of the other firms be willing to support their competitor's efforts to extend their brand around the world? The last point is would these types of middle man scenarios be accepted in all other countries, I.E. US, Can, Europe, It seems it will be generally accepted in Asia but what about the rest. The answer to your question can be provided by asking you another question . . . How successful have the Internet Portal sites been in N.America? Last time I looked, they were doing very very well. As a matter of fact, I wish I had invested in many of these same companies when they were at the stage that CPT is with SEC now. Capital will certainly provide investors with values to substantiate a lot higher price than it is currently being traded at. There will be gains here but eventually there will be competition of that we can be sure. I totally agree. In my opinion, the first to market advantage will be significant, and the share values will soon reflect this. Crazy Canuck