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Enron Mail |
-the-counter (OTC) energy, metals and other commodities.
Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Jay Fitzgerald X-To: Greg Whalley, Bruce Garner X-cc: X-bcc: X-Folder: \Lawrence_Whalley_Dec2000\Notes Folders\Ecommerce X-Origin: Whalley-L X-FileName: gwhalley.nsf ---------------------- Forwarded by Jay Fitzgerald/Corp/Enron on 03/21/2000 09:24 AM --------------------------- "Sven Becker" <Sven.Becker@enron.com< on 03/21/2000 07:08:56 AM To: "John Thompson" <John.Thompson@enron.com<, jay.fitzgerald@enron.com, "Jens Gobel" <Jens.Gobel@enron.com<, "Pedram Mazaheri" <Pedram.Mazaheri@enron.com<, "Jacob Meins" <Jacob.Meins@enron.com<, "Thomas Deinet" <Thomas.Deinet@enron.com<, "Darren Maloney" <Darren.Maloney@enron.com<, "Wilson Kriegel" <Wilson.Kriegel@enron.com< cc: Subject: 7 leading banks and energy concerns announced on Tuesday they had joined forces to launch an online electronic market for trading over -the-counter (OTC) energy, metals and other commodities. By Richard Mably LONDON, March 21 (Reuters) - Seven leading banks and energy concerns announced on Tuesday they had joined forces to launch an online electronic market for trading over-the-counter (OTC) energy, metals and other commodities. In the biggest foray yet on to the internet in those markets, the venture said it planned to begin trading various petroleum and precious-metals based OTC products later this year. It also intends to develop additional markets for global natural gas, electrical power and a variety of base metals in due course. The companies are BP Amoco <BPA.L<, Royal/Dutch Shell <RD.AS< <SHEL.L<, Totalfina <TOTF.PA<, Goldman Sachs <GS.N<, Societe Generale <SOGN.PA<, Morgan Stanley Dean Witter <MWD_pe.N< and Deutsche Bank <DBKGn.DE<. The seven founders, already among the largest players on energy and commodity markets, said they had made a commitment to provide initial market liquidity for the new exchange -- called IntercontinentalExchange. Neal Shear, global head of commodities at Morgan Stanley, said that in markets now valued at $1.8 trillion annually, electronic trading could significantly reduce trading costs. "The capabilities provided ... will offer OTC participants increased market transparency, liquidity and efficiency while preserving the anonymity most market participants require," the companies said in a joint statement. ATLANTA-BASED, USING ESTABLISHED PLATFORM The exchange will be headed by Jeffrey Sprecher, previously President of Atlanta's Continental Power Exchange, the company which developed the trading system to be used by IntercontinentalExchange. Peter Ward, a director of Shell International Trading and Shipping Company said: "We believe we have established a professional marketplace for professional market participants. Our markets will be open to all who have a business interest in them without any artificial restrictions." Some think the electronic OTC market could provide tough competition for futures exchanges despite providing lesser guarantees than more tightly regulated contracts. "If the market becomes mature enough, liquid enough and enough players take an active part in its development, it could take a good stake from the futures market," said one European oil trader not involved in the venture. The New York Mercantile Exchange, the world's leading energy futures market, last week said it had declined a proposal by Morgan Stanley and Goldman Sachs to team up on an electronic communications network. Traditional broking houses might also lose out although dealers said an electronic market could not replicate the sort of information provided person-to-person by brokers. "The idea definitely has merit. But I don't believe it is going to be the immediate downfall of brokers. If you look at the trading screen what kind of information do you get? Very little," said Bo van Wijk of Standard Bank of London. The seven companies said there would be no formal membership of the exchange and no dues or fees beyond those incurred in the process of trading. Currently the bulk of trading in the wholesale OTC energy and metals markets is conducted on the telephone. Beyond the benefits of electronic links, the exchange will create a "paperless back office," the companies said. They also plan to develop facilities which would permit participants to clear and settle OTC products. For related news, double click on one of the following codes: [ELE] [ELN] [LEN] [RTRS] [BPA.L\c] [RD.AS\c] [SHEL.L\c] [TOTF.PA\c] [GS.N\c] [SOGN.PA\c] For related price quotes, double click on one of the following codes: <BPA.L< <RD.AS< <SHEL.L< <TOTF.PA< <GS.N< <SOGN.PA< Tuesday, 21 March 2000 12:52:11 RTRS [nL21251729]
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