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

To: Crazy Canuck who wrote (360)	4/30/2000 8:39:00 PM
From: Crazy Canuck	Read Replies (1) \| Respond to of 960

Mid last week, an investor forwarded me a copy of some news and asked how these developments would effect CPT / SEG. It involved an alliance of 5 Brokerage firms in Asia, that on the surface seemed to compete with some parts of SEG's business plans. Before posting it, I wanted to be sure that I fully understood the ramifications that this news had on the CPT / SEG's expansion plans. Due to the nature of this news, I felt that the only one who could answer my questions in depth was Mr. Toby Chu (SEG's President and CEO). As a result, I forwarded this article to him. I then contacted Keith Massey and we followed up with a conference phone call to Mr. Chu to discuss the ramifications and implications of these recent developments. You could say that once again, we ended up conducting a fairly extensive and far ranging interview with him. To be accurate, we actually made two phone calls to him. One while he was in Greece, and the other when he was in Amsterdam. In case anyone is wondering . . . Yes, my phone bill will be hidden from my wife this month. The following article is the one we sent to him. I also sent him a summary of the notes I took during our phone conversation. I did this to ensure that we had fully and accurately had understood his comments and would not be misrepresenting his views in any way. After a short while, he responded and told us that our notes were accurate and they correctly reflected his views. I have included these notes as a follow on to the article below. I also want to mention that just after we had concluded our conversations with Mr. Chu, another poster from the StockHouse thread (Beararn) also contacted me to discuss the recent reports of the NASDAQ expansion plans. Although Mr. Chu has touched on this issue in his comments to Keith and I, I agreed with Beararn that this NASDAQ news was very specific and relevant to SEG's plans. Contrary to what was earlier suggested to the thread about not inundating Mr. Chu with emails and letting him focus on the business, I agreed with Beararn that this news was important enough to ask Mr. Chu for a comment. Beararn had already forwarded a copy of this information to Tracy Kidd (CPT's IR person), and had spoken with her as well. Beararn has informed me that he too is planning to post a copy of his communications with Mr. Chu on the StockHouse thread later tonight or early tomorrow morning. As a bit of a preamble, after talking with Mr. Chu and hearing him explain the issues behind this article I have to say that what I had initially perceived might be a negative for this company appears to have the potential to become a real positive for them. *Here is the article that I sent to Mr. Chu for his review . . .* Five Asian securities houses form Asian online trading network HONG KONG, April 26 (AFP) - Five Asian securities houses have formed the first cross-border online trading network in Asia which will enable investors to invest in four different markets through a single Internet channel. Called Asia Stock E-xchange Network, the alliance agreement signed Wednesday is a joint venture between Aizawa Securities Ltd. of Japan, Capital Securities Corp. of Taiwan, Dongwon Securities of South Korea and Tai Fook Securities Group Ltd. and Japan Asia Securities Group Ltd. of Hong Kong. Regional investment bank Japan Asia Securities Group is the originator and co-ordinator of the alliance. Under the alliance, each participating brokerage will hold a trading account with the other four partners. The Asia Stock E-xchange Network is expected to start business in early June. Online trading is expected to boom in Asia and in South Korea online share transaction volumes are already over 40 percent of the total. The combined market capitalization of Hong Kong, Taiwan, Tokyo and Seoul stock exchanges was 5,400 billion US dollars at the end of March and the transaction volume totaled some 20 billion US dollars per day. *Here is the essence of our two (very loooong distance) telephone conversations with Mr. Chu . . .* He thanked us for sending him that article regarding the regional cross border brokerage alliance. He told us that he has been aware of this arrangement for some time now. In fact, he recently met with the Senior Management of Tai Fook (including the Chairman of this firm) to discuss this issue. The purpose of the meeting was to discuss both their regional expansion aspirations and SEG's Global plans. He stressed to us that from his perspective this meeting was both very productive and encouraging. He said that some people may not be aware that co-operation among exchanges and participating brokerage houses is not a new concept and that several similar alliances have been made in other areas of the world. He went on to say that it has been going on for years, and it is only recently that there has been a widespread realization among firms that in order to survive and thrive there is a real need to expand their reach beyond their firm's normal borders. This realization has prompted many firms to look to ways to do this quickly and efficiently. These co-operatives allows these participating exchanges and Brokerage firms to further extend their services into their own regional parts of the world. SEG's business model allows these regional groups to take this a step further and extend their reach to a much, much larger global audience. He assured us that this is just one of the many reasons why SEG is being received so well when they have been sitting down with prospective partners around the globe. He emphasized that these co-operatives are part of the evolution that is just now starting to take place on every continent. He then assured us that the SEG business model was developed with these regional co-operatives in mind. On the surface these sharing agreements may appear to some people as competition to some parts of SEG's business plans. He said that on the other hand, they look to these regional groups and the development of these co-operatives as a tremendous opportunity for SEG. The customers of these firms will be able to use SEG to facilitate trades beyond the reach of their own firm and their regional partners. They will feed SEG members to SEG's portal, and SEG will feed business to them in return. With the right arrangements, these groups will allow SEG to expand their reach into exchanges and brokerage firms that they might otherwise not have been targeting in the near term. As he had mentioned earlier, he believed that these co-operatives accelerate their expansion plans in that rather than signing on just one firm, they may end up signing on the other firms in that group as well. An agreement with a combined regional group could provide them with 3, 4, or 5 more firms on exchanges where they had initially only targeted one of each. This would mean that it would accelerate their plans for setting up a truly Global and representative financial portal. The participating firms of these co-operatives benefit greatly as well. Because through SEG, they will be opening themselves up to new investors from around the world. He felt it was important to stress that in order to be successful, these regional co-operatives have some significant hurdles to overcome. They will have to tackle issues such as establishing a clear delineation of whose customer an investor is, ownership of the customer data base, expense allocation, Website development and infrastructure maintenance and support. Each of these issues (among others) tend to become more complex with the addition of more equal partners in a group. In order to be a success, they will have to demonstrate a willingness to co-operate and agree on strategies amongst all partner firms. A reality is that progress can be slower than the market demand for their planned services. He encouraged us to look at the protracted schedule of the joint HSBC and Merrill Lynch development venture as an example. They do not expect to implement their joint venture until December of this year, with Britain as their first launch. Once again, he was very confident that they are ahead of the crowd. He also wanted to point out that where some of these regional co-operatives will be targeting their own clients as potential users for their new service, SEG will be aggressively advertising their portal throughout the world. He assured us that they have an extremely aggressive and powerful global advertising campaign which will be starting in June. They also have a dedicated staff and a solid maintenance contract which will ensure that their Website / financial portal is constantly evolving and strengthening. Where as some firms view their website as a value added service they offer their customers to compliment their core business, SEG (on the other hand) recognizes that ensuring that their portal is well known and is a success is - the core of their business! As it will be the primary focus of their business, they will ensure that their site is state of the art. It will be launched any day now. He says he sometimes likes to think of SEG as a kind of a financial portal equivalent of WalMart. When taking a closer look at that company he said you will see that they have many separate businesses operating within each store. What they have mastered is a highly efficient business model with the ability to execute on that model quickly. They also have a Brand Name that is recognized around the world. That is what he said he expected to do with SEG. We found it interesting that Tai Fook was part of this new Brokerage alliance and was also one of the underwriters for SEG's upcoming IPO and one of their SEG's brokerage partners. Mr. Chu assured us that Tai Fook as the company's sponsor and underwriter is solidly behind SEG. They fully understand where they are headed and where they are in the execution phase of their plan. They are eager to see SEG succeed. Whereas others are in first gear, Mr. Chu felt that they are well into third gear and they are picking up more speed as they go. In Summary . . . He emphasized that the regional co-operation model is not new. It is a wise thing for these firms to be doing now. If he were in their shoes he would be doing the same thing. Where SEG comes in, is that SEG will link many of these co-operatives, stock exchanges and brokerage firms into a truly Global network. Everyone involved stands to benefit. He stressed that the market for this service, and more importantly the demand for SEG's service is staggering. They plan to ensure that the people who are demanding this service know about this company and what they will have to offer them. Crazy Canuck

To: Crazy Canuck who wrote (360)	5/21/2000 1:48:00 PM
From: AriKirA	Respond to of 960

I can't even take a break without seeing a few buying opportunities pass by... One small problem though : I wasn't following the market [gggg] Great to hear you are working on a summary document. With all the information we've seen flow through on this thread we can surely call it the 'best of the best' hehe I can tell you that I was pleased to hear that Mr. Chu, and others from his company have been out pounding the pavement to ensure that the groundwork is completed to lock up the company's contacts around the world. After all, he is building a GLOBAL company. <VBG> Sure sounds like it CC... good to see Mr Chu taking the initiative to personally meet all the potential partners. Have some catching up to do Kind Regards AK