---------------------- 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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