Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Crazy Canuck who wrote (341)	4/20/2000 4:27:00 PM
From: Crazy Canuck	Read Replies (1) \| Respond to of 960

Here is a very interesting article that was published in today's Vancouver Sun. The share price of Merrill Lynch & Co. rose 10 per cent or $9.25 us to $99.25 Tuesday after is said it will create an online bank and brokerage with HSBC Holdings Plc. Almost five million shares changed hands. The companies will invest $1 billion over five years in the joint venture, which will target wealthy individuals with $100,000 to 500,000 to invest. The agreement excludes the U.S., home to most of Merrill Lunch's 19000 stock brokers and 5.4 million customers. If this news can move that company's stock and market cap that much, then wait till the world finds out about SEG's plans. Especially when they find out that that SEG's portal will be live way before Merrill and HSBC will be. Crazy Canuck

To: Crazy Canuck who wrote (341)	4/20/2000 6:36:00 PM
From: WhatsUpWithThat	Read Replies (1) \| Respond to of 960

Since I first read the Merrill/HSBC announcement, the discussion has troubled me, but I hadn't yet tried to distill this discomfort into a post. This sentence from Mr. Chu, however, pushed me to get to it, because it leads nicely into my point. They [sic] aim is to market this service to both their existing Private Banking clients and Merrill's high net worth banking clients. I can't get incredibly upset about the announcement; to me it seems competition for SEG in name only. I see the Merrill/HSBC partnership as simply another way to try to lock in their high net worth clients by providing a number of Private Banking services, only one of which is the ability - eventually, and expensively - to trade on international markets. More as a way to keep PB clients from going elsewhere than a new service aimed at developing a whole new market, if you get my drift. SEG, I'm sure, didn't predicate the success of their business plan on making the bulk of their revenue from people who'd be Private Banking clients, the thick-carpets/overstuffed-armchairs crowd. There aren't enough of these people - and I suspect many of them aren't what we'd term active traders - to generate significant revenues at online broker rates. And these are people who won't complain about paying high-margin fees anyway for international trades, because they're more used to personalized, broker provided trading (at high rates). That's why banks are trying to increase the ranks of PB, because it's very high margin stuff for them. Does that describe the market SEG is after? Not. I know there are active traders here who'd qualify as Private Banking clients (that $100K and up investing pool), but I bet few of them are signed up for PB services (and those who are, my apologies in advance for categorizing you as the 'thick carpets' crowd <g> ). I think PB in general is more of an old money rather than new money thing, much as the banks are trying to change that. So (long way to get here, I know) I guess what I'm saying is I don't think they could be considered able to take much business out of SEG's market because: - they're providing a whole raft of PB services, of which int'l trading is only one and I don't think they see it as the lynch pin of the service offering - they're mostly aiming at a population that is relatively small, a subset only of the market SEG is targeting - I would think PB clients would tend more to investors than traders, and SEG doesn't plan on making significant revenues from people who make 20 trades a year, I'm sure. This, of course, is simply opinion, and arguable because of that...but it is at least food for thought. WUWT