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

To: Crazy Canuck who wrote (340)	4/20/2000 4:21:00 PM
From: Crazy Canuck	Read Replies (2) \| Respond to of 960

When the news came out about the Merrill Lynch and HSBC plans, I sent a copy of the news in an email to Toby Chu (CPT's President). In my email, I asked him to comment on it. I have to tell you that I found it very encouraging to read what he had to say! Here is his response. Crazy Canuck ___________________________________________ 1. The new global financial services they are offering are targeted for high net worth individuals, not average investors. They aim is to market this service to both their existing Private Banking clients and Merrill's high net worth banking clients. They are not offering this to their retail clients because it would mean that they would be competing directly with HSBC's own 'InvestDirect' and Merrill's 'merrilllynchonline' business. They are therefore quite specific about who they will be offering these services to. 2. Now for some better news. We are in the process of reviewing a series of 'international charge rates' we have obtained from a handful of global traders. Until recently, these rates were not available to us. Because of this, we couldn't use more exact numbers as comparisons when we drafted the original business plan. Not so much to my surprise, for anyone conducting international trades through these other traders, it would mean that they would have to pay an average commission structure approximately 3 to 6 times more than they would have if they traded locally. Simply put, Hong Kong residents are now paying 0.25% - 1% per transaction buying Hong Kong stocks. If an investor was to use Charles Schwab to conduct trades from abroad for shares in Hong Kong which had a value of US less than $1 per share (which represents a majority of the stocks trading in the Hong Kong markets), they would end up paying a minimum of 4% + basic charge of $39 US. Taking this further, lets assume an overseas investor wanted to sell (or buy) 5000 shares of SEG at US $1, their commission would then be a total of US $249. Actually, I should not have used Schwab as an example, because I have been informed that Schwab does not currently allow Internet trading for international stocks. Investors must call Schwab's Global Trading Desk to execute such trade. Now, if that investor were to conduct the same trade directly through SEG's partnered broker, they would only be paying a commission charge of between 0.5% - 1%. This would result in a net charge to them of $25 to $50. MAX. Investors may find that Merrill / HSBC's fee could be as high as Charles Schwab's is. SEG will be offering many of the same kinds of services and accessibility at a fraction of the cost that they will be charging for. And most importantly, we will not be restricting our services to 'affluent clients' as indicated in their news wire. As you can see, the margin for conducting international trade as it now exists is excessive and in some cases prohibitive. Using the example I just referred to, if an investor were to use SEG's web site, they would have saved at least 400% on their commission charges. Well it is no wonder HSBC and Merrill are jumping into the game. Based on what I know that we are doing and have planned, I am confident that SEG will easily gain and retain a dominant position in this market. I also want to mention that it is nice to see this news as the HSBC / Merrill plan proves that SEG has the global vision and ability to identify business opportunities the same way that Mega size players such as HSBC and Merrill Lynch can. And it is nice to be able to say that we already have a significant head start on our competition! Toby