Subject: Enron moves make waves in electronic trading industry.(Brief ...
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 4 Aug 2000 01:40:00 -0700 (PDT)

We need some advice on this one - we are not in any negotiation with Altra 
now and anything we were talking about is under a Confidentiality.

Andy needs some advice on how to pursue - obviously it helps them to say the 
haven't been left out of the loop.  Andy will fill more in.

---------------------- Forwarded by Louise Kitchen/HOU/ECT on 04/08/2000 
08:36 ---------------------------
From: Rahil Jafry on 04/08/2000 08:32
To: Louise Kitchen/HOU/ECT@ECT, Andy Zipper/Corp/Enron@Enron, 
[email-masked], Dave Samuels/HOU/ECT@ECT
cc:  

Subject: Enron moves make waves in electronic trading industry.(Brief ...

Once again, Altra is clueless....

Enron moves make waves in electronic trading industry.(Brief
Article)(Statistical Data Included)
Monica Perin

07/21/2000
Houston Business Journal
11
Copyright 2000 Information Access Company. All rights reserved.
COPYRIGHT 2000 American City Business Journals, Inc.

  Leading online platform signs agreements with HoustonStreet Exchange
and True Quote

  EnronOnline, Enron Corp.'s giant online platform,, has made the first
Commodity in what may become a consolidation of competing electronic
trading exchanges in the energy industry.

  Enron Net Works, the division which operates EnronOnline, last week
signed cooperative agreements with HoustonStreet Exchange and True quote
LLC.

  And industry sources confirm that EnronOnline is negotiating similar
deals with several other exchanges, including Houston-based Altra Energy
Technologies and RedMeteor, as well as e-Speed, an exchange backed by
Dynegy and, Williams.

  HoustonStreet Exchange, headquartered in Portsmouth, N.H., was
recently ranked among the top 20 dependent energy exchanges by AMR
Research, a Boston consulting firm which put Altra in first place.

  True Quote, based in Louisville, Ky.,  a startup trading platform
being developed by APB Energy -- an over-the-counter brokerage firm --
along with PG&E National Energy Group, EnForm Technology and Microsoft
Corp.

  EnronOnline is the world largest commodity trading platform, but users
an only trade with Enron. Rather than being a true trading exchange,
industry insiders describe it as simply an online extension of Enron's
business.

  But in EnronOnline's first six months of operation after being
launched last November, the value of transactions conducted on the,
system surpassed $50 billion at a rate of $1.5 billion a day. The
platform offers trading in a wide variety of commodities, from most
forms of energy to bandwidth and paper

  MORE EYEBALLS

  The agreements EnronOnline has struck will enable the company to post
the prices at which it will buy or sell natural gas and electricity on
HousonStreet.com and TrueQuote.com Neither HoustonStreet nor TrueQuote
prices, however, will appear on EnronOnline. Customers on those two
sites who click on an Enron quote will be instantly linked to
EnronOnline, where the trades will take place.

  "As Louise (Kitchen, president of EnronOnline) said, extending their
pricing to more eyeballs will build more transaction volume for Enron,"
says Paul Bourke, president of Altra. "The question is whether it will
build volume for the other exchanges.

  "We are talking to Enron," Bourke adds. "We are intrigued, and we are
attempting understand what the business benefits to Altra would be."

  He says an Enron-Altra deal would be "more complicated" than those
involving other exchanges because of Altra's significant liquidity in
natural gas. Altra is the leader in online natural gas trading.

  While none of the exchanges would reveal what, if any, financial terms
are involved in the agreements--other than to say there is no sharing of
commissions --Bourke says he expects that if Altra and Enron finalize an
agreement, Enron would take a small equity position in Altra. He
speculates that this is what Enron did with HoustonStreet.

  Brian Pieri, vice president of Red Meteor, says the value of
EnronOnline to the other exchanges is that "they bring' tight-bid
offers, which is something the exchanges have to work hard on. And more
people will make the bid offers even tighter."

  This means buy and sell prices are close together, which helps market
liquidity.

  Asked if the additional liquidity and trading volume that Enron might
bring to the other exchanges wouldn't just further fragment the market,
Pieri compared the whole online trading scene to a sixth-grade dance.

  "The boys are all on one side of the room and the girls are on the
other side, and nobody is dancing. Somebody has to start and then
everybody else joins in. Enron brings more validity to this very new
situation," Pied says.

  "All of the exchanges are trying to build liquidity, of which Enron is
the king," says Bill Swanton, an analyst with AMR Research.

  Swanton predicts that the energy exchanges will consolidate within the
next six to eight months, and the ultimate surviving exchanges will not
be owned by any single player.

  "You need an independent exchange. I can't imagine Enron will end up
running it. The trading community won't be satisfied with that," he
says.

  Swanton points out, however, that Enron "will attract attention they
don't want if they force, some of these guys out of business."

  But HoustonStreet's CEO, Frank Getman, takes a different view of what
the Enron deals mean.

  "Web-based energy trading exchanges are no longer about liquidity,
thanks to these EnronOnline data deals," he says. "The game is now about
functionality and value-added services."

Folder Name: Rahil Jafry
Relevance Score on Scale of 100: 97

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