Investment Tools Vendor Eyes Emerging Markets

By Maria Trombly, Asia/Technology Correspondent

December 5, 2005 - The lack of corporate transparency that slows the maturation of many emerging-market countries provides an opening for AlphaTrade, a Vancouver, Canada-based provider of real-time financial data and analytical tools for investors.

Take, for example, General Steel Holdings, a steel company in Beijing that was formerly known as the American Construction Co. and trades on the over-the-counter bulletin board in the U.S.--as does AlphaTrade. Increasing financial disclosures is a major goal for the next several months, says General Steel CFO John Chen. Which explains why he spends $12,000 a year on AlphaTrade software.

Investors can now go to the steel producer's bilingual Web site--reflecting an initiative by the company's investor-relations department--and view the current stock price, historical data, pertinent news releases and regulatory filings, all powered by AlphaTrade.

For any Chinese enterprise like General Steel, which has been trading in the U.S. market since October 2004, "transparency is definitely at the top of the list," says Chen. "A lot of investors are interested in hearing news from China. They want to learn how people do business in China. We had to find a way to let them know, to educate them more about China."

The $12,000 gets Chen market data and charting tools for investors as well as the ability to issue e-mail blasts and place a banner ad in a prime location on AlphaTrade's log-in screen.

Other Chinese companies have online investor-relations functions that need technology support. This year's hot initial public offering, search engine Baidu.com, offers data through Edgar Online. China Unicom, which listed on the New York Stock Exchange in 2000, uses a Hong Kong vendor, Quam, that offers quotes on a one-hour delay along with historical data. China Mobile, which listed in 1997, also uses Quam.

However, not all Chinese stock issuers are up to speed in this regard. The biggest IPO of the past four years, China Construction Bank, shows day-old stock data on its site and offers no historical information. It has a blank financial highlights page and only a couple of months-old announcements in the press release section, which makes no mention of the record-breaking IPO in October.

China Life Insurance, which listed on the NYSE in 2003, has limited information on a Web site that is not fully bilingual (the button for historical data is in Chinese, for example) and that has an awkward interface with a homemade feel.

Sinopec Shanghai Petrochemical Co., which listed on the NYSE in 1993, has a cleaner interface for its historical data but no charts.

As a vendor, AlphaTrade stands out with its smooth interface and depth of information, says Chen. Before bringing in AlphaTrade--a deal that was announced Oct. 20--General Steel did what many other Chinese companies still do: "We manually put up the documents and headlines," he says. "We didn't have a stock ticker or stock price history."

Two other companies in China and about 100 worldwide subscribe to AlphaTrade, says the company's CEO, Penny Perfect. That includes 12 customers in Eastern Europe, she says. Emerging markets "are very receptive. [Companies] have a feeling that they need some help, and we have an easy-to-use product. Because we're multilingual, people can look at stuff in their own language, and our pricing is very cost-effective," with basic subscriptions for the stock ticker and charts running from $50 to $350 a month.

According to Chen, it took only a couple of days to have AlphaTrade tools available on the General Steel site. AlphaTrade e-mailed the software, and an in-house technician installed it.

That process can take as little as 15 minutes, Perfect explains, but General Steel's timing was complicated by distance and time-zone differences.

AlphaTrade also offers its products to both retail investors and institutions. The former can choose from a free, stripped-down, time-delayed product or a real-time service that starts at $17 a month. Smaller, online brokerages use AlphaTrade to deliver inexpensive, co-branded investment tools. One of these firms is Sharewatch in Cork, Ireland. In October, Sharewatch announced an agreement to be AlphaTrade's exclusive marketer in Ireland and the U.K. At the same time, they said they would add the London Stock Exchange (LSE) to their product range, effective Dec. 1, giving clients access to premium content for Irish and U.K. companies.

LSE will be the first exchange outside North America with data on the AlphaTrade system; other markets, including Hong Kong, Shenzhen and Shanghai, are coming in the first half of 2006, Perfect says. The company made Nasdaq's TotalView available in its flagship E-Gate system in July 2005.

"The [AlphaTrade] content is so far ahead of anything that's available from other vendors," says Sharewatch managing director Peter Byrne. For example, he adds, AlphaTrade has a service for delivering data to cell phones. He describes Sharewatch as "one of Europe's principal financial portals offering high-tech, low-cost share trading/CFD [contracts for difference] tools and platforms," and notes that AlphaTrade delivers quality at a low price.