Enron's Skilling Cites Stock-Price Plunge As Main Reason for Leaving CEO Post
The Wall Street Journal, 08/16/01

Enron's Lay to Name Two to Chairman's Office, Newspaper Reports
Bloomberg, 08/16/01

Veritas Software, Vitesse Decline Amid Tech Slump, Energy Surge
The Wall Street Journal, 08/16/01
Houston-Area Energy Giant Plans to Quickly Fill CEO Position
Houston Chronicle - Texas, 08/16/01
Enron's Skilling Cites Stock-Price Plunge as Main Reason for Leaving CEO Post
Dow Jones Business News, 08/16/01
Enron's Skilling says resigned due to plummeting share price
AFX News, 08/16/01
After a tumultuous six months as the energy company's president and CEO, Jeffrey Skilling says "No mas," tendering his resignation.
Redherring.com, 08/16/01
Enron shares decline after CEO resigns
National Post, 08/16/01
Shares Fall, With the Nasdaq Closing at a 4-Month Low
The New York Times, 08/16/01
Skilling quits, jolts Enron
The Times of India, 08/16/01
World Watch
The Wall Street Journal, 08/16/01
Markets / Your Money Enron Stock Hits 52-Week Low on Skilling's Exit Reaction: Some analysts, however, reaffirm their confidence in the energy trader's bold strategy.
Los Angeles Times, 08/16/01
USA: Enron reels as heir-apparent Skilling exits.
Reuters English News Service, 08/15/01
Bandwidth Market: Price For OC48 Package Shifts Downward
Dow Jones Energy Service, 08/15/01
Enron's CEO Skilling Departs, Testing Enron Again
Dow Jones News Service, 08/15/01

Historic status for pipelines resisted
Houston Chronicle, 08/15/01

Enron plans to quickly fill top positions
Houston Chronicle, 08/15/01

CHINA: ANALYSIS-India investors seen gaining from U.S. policy shift.
Reuters English News Service, 08/16/01
INDIA: Belgium's Tractabel pulls out of India - paper.
Reuters English News Service, 08/16/01
TERMS OF REFERENCE FOR INDIA'S ENRON PROBE TO BE FINALISED
Asia Pulse, 08/16/01

Enron's Former CEO Says He Failed in Some Businesses, CNBC Says
Bloomberg, 08/16/01




Enron's Skilling Cites Stock-Price Plunge As Main Reason for Leaving CEO Post
By John R. Emshwiller
Staff Reporter of The Wall Street Journal

08/16/2001
The Wall Street Journal
A2
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Jeffrey K. Skilling said that the pressure he felt from Enron Corp.'s plummeting stock price was the main reason he decided to resign Tuesday as the energy giant's chief executive officer after only about six months in the job. 
In an interview yesterday, the 47-year-old Mr. Skilling elaborated on his decision to leave Houston-based Enron. On Tuesday, Mr. Skilling insisted he had resigned for "personal reasons" unrelated to Enron's business activities.
In the interview, he reiterated that he wasn't under any pressure to resign from the company's board or Chairman Kenneth Lay, who has resumed the CEO's duties at the nation's biggest energy trader. 
However, yesterday Mr. Skilling said that his "personal reasons" were deeply enmeshed with feelings that he had failed in a crucial business area during his brief tenure as CEO. Calling the company's stock performance a "kind of ultimate score card," Mr. Skilling noted that Enron's share price had fallen by some 50% this year. 
Mr. Skilling said he took that stock-price drop very personally. "I put a lot of pressure on myself" for that decline, he said. "I felt I must not be communicating well enough" with investors. He felt this particularly given Enron's strong financial results over the past several quarters, based largely on growing volumes in its trading business, which covers a range of items, including electricity, pulp and paper. 
If the stock price had remained up "I don't think I would have felt the pressure to leave," he said. 
In January, Enron topped $84 a share in New York Stock Exchange composite trading. It closed Tuesday, before the announcement of Mr. Skilling's resignation, at $42.93 a share. As of 4 p.m. yesterday, Enron traded at $40.25, after falling below $37 during the day. 
Mr. Skilling, who had been at Enron 11 years, said the depressed stock price was particularly tough to explain to fellow Enron employees, many of whom are shareholders. "People would say `What is going on with the stock, Jeff?' I would have to say I didn't know. It has been frustrating," said Mr. Skilling. 
The self-portrait offered by Mr. Skilling in the interview is rather different from the widely held image of him as an ambitious, bright and thick-skinned business strategist whose long-held goal had been becoming Enron CEO. Mr. Skilling said that the "final straw" in his decision to leave had come on a visit last week to England in connection with the deaths of three Enron workers in a power-plant accident there. That trip helped reinforce "how tenuous life is," said Mr. Skilling, who has three children from a previous marriage and recently became engaged. 
While Mr. Skilling said Enron is in "great shape," his departure raised anxiety in the investment community. Merrill Lynch, for instance, lowered its rating on Enron to neutral from buy based on "uncertainty" created by the resignation. 
Yesterday, an Enron spokesman confirmed that Mr. Lay plans to name two executives to the existing "office of the chairman" within the next few days or weeks. The spokesman said Mr. Lay hadn't yet revealed whom the two would be. The office of the chairman had consisted of Mr. Lay and Mr. Skilling.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Enron's Lay to Name Two to Chairman's Office, Newspaper Reports
2001-08-16 08:41 (New York)


     Houston, Aug. 16 (Bloomberg) -- Enron Corp. Chairman Kenneth
Lay plans to name two company executives to the ``office of the
chairman'' as soon as the next few days, the Wall Street Journal
reported, citing an unnamed Enron spokesman.
     The appointments follow the resignation Tuesday of Jeffrey
Skilling as chief executive. Lay took back his job as CEO of the
biggest energy trader.
     Skilling had said he resigned for personal reasons. Pressure
from Enron's falling stock price also contributed to his decision,
he said in an interview with the Journal. Skilling joined Enron in
1990 and became chief executive in February.
     ``I felt I must not be communicating well enough'' with
investors, he said, according to the newspaper. Houston-based
Enron's shares had fallen 48 percent this year before Skilling
stepped down, though second-quarter profit rose 40 percent from a
year earlier, and revenue had almost tripled.
     The ``final straw,'' showing ``how tenuous life is,''
happened last week on a trip to England related to the deaths of
three Enron workers in a power-plant explosion, Skilling said in
the newspaper interview.
     Enron's stock fell $2.68, or 6.2 percent, to $40.25
yesterday.


Abreast of the Market
Veritas Software, Vitesse Decline Amid Tech Slump, Energy Surge
By Robert O'Brien
Dow Jones Newswires

08/16/2001
The Wall Street Journal
C2
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -- Energy stocks found reason to rally, but weakness in technology issues caused market averages to fade in another thinly traded summer session. 
BEA Systems hit a 52-week low as investors reacted to the downbeat forecast that accompanied the San Jose, Calif., software maker's fiscal second-quarter results Tuesday. BEA Systems fell $1.56, or 8.4%, to $17.04 in Nasdaq Stock Market trading.
At best, reaction to the earnings results in the group drew an inconsequential response. Semiconductor-equipment maker Applied Materials finished nine cents higher at 43.74 on Nasdaq, while Nvidia, a maker of three-dimensional graphics processors, rose 10 cents, to 85.95 on Nasdaq, after its quarterly profit statement. 
In a more accurate gauge of investor caution, companies about to record quarterly results faded. Brocade Communications, a maker of data-storage software products, eased 1.82, or 5.7%, to 30.34 on Nasdaq, before its release of quarterly results, which came out after trading closed; the results matched analysts' forecasts. 
"I think so many investors are just reluctant to establish big positions," said Scott Curtis, head of U.S. equity trading at Credit Lyonnais Securities. 
The Dow Jones Industrial Average finished with what, at least by recent standards, appeared to be a substantial move. After falling less than one point Monday, and four points Tuesday, the industrial average fell 66.22 points, shedding 0.6%, to finish at 10345.95. 
That move came on slightly, though not substantially, improved volume, with one billion shares changing hands on the New York Stock Exchange, compared with 962 million shares Tuesday. 
The Nasdaq Composite Index, stung by the weakness in technology, dropped 45.64, or 2.3%, to 1918.89. 
Several natural-gas companies rallied after the release of weekly gas-storage data showed inventories, which had increased sharply during recent weeks to the dismay of the group, grew little during the latest period. 
Energy companies such as Apache, which rose 2.79, or 5.4%, to 54.14, Devon Energy (Amex), which gained 1.90, to 52.66, and Burlington Resources, which rose 1.50, to 43.57, made big moves in the aftermath of the inventory data. 
Oilfield-service providers made big moves. Halliburton gained 2.30, or 7.5%, to 32.84, while Schlumberger added 2.95, or 5.9%, to 53.20, and Transocean Sedco Forex gained 1.52, or 5%, to 31.99. 
Power-generation and energy-marketing concern Enron fell to a 52-week low amid brisk trading, after President and Chief Executive Jeffrey K. Skilling resigned from the Houston company. Enron fell 2.68, or 6.2%, to 40.25, with 29.7 million shares changing hands, compared with a daily average of about four million. 
Several companies identified as among the holdings of investor Warren Buffett's Berkshire Hathaway progressed. Honeywell International, gained 64 cents, to 37.32, as Office Depot, another new addition to the portfolio, fell 37 cents, to 12.92. 
Among Berkshire's largest holdings, Coca-Cola rose 1.54, to 47.58, while Gillette tacked on 1.59, or 5.7%, to 29.50. 
Berkshire Hathaway's Class A increased 500, to 69,600, while Class B gained eight to 2,313. 
Veritas Software (Nasdaq) fell 3.04, or 8.1%, to 34.40. Morgan Stanley said its analysis of the Mountain View, Calif., storage-management software maker's recent securities filings led it to conclude that one of the company's new products has had an unexpected sales decline. 
Vitesse Semiconductor eased 1.57, or 8.2%, to 17.67 on Nasdaq. The Camarillo, Calif., maker of communications-network chips warned in a securities filing that revenue for the current fourth quarter will be below third-quarter totals. 
Network Appliance added 36 cents, to 13.12, in Nasdaq trading. The Santa Clara, Calif., maker of data-storage products reported fiscal first-quarter results that matched forecasts, and drew criticism from analysts. However, UBS Warburg issued relatively constructive comments, saying the company had begun to turn the corner on its recent problems. 
CenturyTel rose 4.09, or 13%, to 34.71. Alltel made an unsolicited bid for the Monroe, La., company of $5.9 billion in stock and cash. Alltel fell 4.16, or 6.8%, to 56.90. 
Maxim Integrated Products shed 3.66, or 7.3%, to 46.50 on Nasdaq, as investors turned cautious ahead of the Sunnyvale, Calif., chip maker's quarterly results, due today. Merrill Lynch reduced earnings estimates for the current quarter, but said any fundamental challenges will hit their nadir with the September-ending quarter. 
Telium rose 1.67, or 18%, to 10.76 on Nasdaq. The Oceanport, N.J., optical-switches maker fell to a new low in Tuesday trading, as investors anticipated the expiration of the lockup on sales by insiders; the lockup expired yesterday. Thomas Weisel Partners reiterated a buy rating. 
Advanced Micro Devices, which dropped 7% Tuesday, declined 75 cents, to 14.75. Salomon Smith Barney reduced its earnings forecast for the Sunnyvale, Calif., chip maker, citing increasing competitive pressure from Intel. 
Dell Computer fell 1.07, to 25.50 on Nasdaq. Credit Suisse First Boston reduced its earnings forecast ahead of the Round Rock, Texas, computer maker's release of quarterly results, scheduled for today. 
Deere gained 1.49, to 43.37. Goldman Sachs named the Moline, Ill., farm-equipment maker to its recommended list, citing a rationale for increased equipment sales. Goldman also upgraded Agco, a Duluth, Ga., farm-equipment maker. Agco rose 80 cents, or 7.8%, to 11.10. 
Watson Pharmaceuticals fell 3.22, or 5.3%, to 57.28. The Corona, Calif., pharmaceuticals maker, which reported on-target earnings Tuesday, reacted to concerns from traders that the company's revenue from generic medicine could fall slightly for the second half of the year. 
Dow Chemical, of Midland, Mich., gained 36 cents, to 35.50, helped by remarks from Credit Suisse First Boston, which suggested that investors overweight their exposure to the chemicals group. 
Knight Trading fell 61 cents, or 5.2%, to 11.11 on Nasdaq. The Jersey City, N.J., securities-brokerage house has begun to charge some clients transaction fees for receipt of their stock orders, reversing its stance on the issue. 
Abercrombie & Fitch gained 2.15, or 7.1%, to 32.24. The Reynoldsburg, Ohio, apparel retailer reported stronger-than-expected fiscal second-quarter earnings. In a research note, Credit Suisse First Boston said the company offered the best lineup of merchandise for fall in the industry.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Houston-Area Energy Giant Plans to Quickly Fill CEO Position
Laura Goldberg

08/16/2001
KRTBN Knight-Ridder Tribune Business News: Houston Chronicle - Texas
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM)

Enron Corp. plans to move quickly to name potential successors to Jeffrey Skilling, who unexpectedly stepped down Tuesday as the energy giant's chief executive officer and president. 
Chairman Ken Lay took over as CEO, a role he gave up to Skilling in February. Lay is also serving as president.
Within days or weeks, Lay plans to name two Enron executives to join him in the office of the chairman, Enron spokesman Mark Palmer said Wednesday. 
The two would get responsibilities that could give them an opportunity to become president or chief executive officer "at the right time," Palmer said. He wouldn't speculate on who might be named. 
Skilling surprised Wall Street with his announcement he was leaving for undisclosed "personal and family reasons." His decision, he said, wasn't related to Enron's business. 
Lay stressed that Enron is in good shape, no strategic changes are planned and no problems are about to be disclosed. 
But Skilling's resignation -- especially after just six months on a job he worked a long time to get -- raised questions among analysts, who were quick to note Enron's closing stock price had dropped from as high as $82 at the end of January to $42.93 Tuesday. Skilling's departure was made public after Tuesday's market close. 
Problems have dogged Enron, including troubles with its new broadband venture, uncertainty over its potential exposure from California's energy woes, continued disputes over a power plant project in India, and questions about the company's long-term strategy to expand from energy trading into a variety of other commodities. 
Skilling's departure simply added more questions, leaving investors wondering Wednesday who might fill the void and whether other problems are lurking. 
At one point Wednesday, Enron's stock declined to $36.87, but it gained ground by the time the market closed, ending the regular trading day down $2.68 at $40.25. 
Lay, when he spoke to analysts Tuesday during a conference call, stressed that Enron has plenty of experienced talent in its senior ranks. He said top executive roles would be filled internally. 
Names bandied about on Wall Street Wednesday as possible successors included Mark Frevert, CEO of Enron Wholesale Services; Lawrence "Greg" Whalley, chief operating officer of Enron Wholesale Services; and Dave Delainey, CEO of Enron Energy Services. 
In his call, Lay mentioned those three but also singled out other Enron executives including Stanley Horton, Kevin Hannon, Andrew Fastow, Richard Causey and Steven Kean. 
Analysts view Enron's talent pool differently. 
Carol Coale, with Prudential Securities in Houston, wrote in a research note that she "was concerned over the depth of management at Enron," while Raymond Niles at Salomon Smith Barney, also in a research note, talked about Enron's "deep bench." 
Coale met separately with Skilling and Lay on Wednesday and said she walked away feeling "no new bad news" is on the way from Enron. 
She expects Kenneth Rice, head of Enron's broadband unit, to announce his resignation soon but said it won't be a total surprise. Palmer declined comment. 
Two other executives resigned from Enron earlier this year. 
The biggest question hanging over Enron is whether its move into markets such as metals and pulp and paper will prove wise, said Andre Meade, an analyst with Commerzbank Securities. 
The company's core business of wholesale trading and marketing of natural gas and power of remains strong, he said.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


Enron's Skilling Cites Stock-Price Plunge as Main Reason for Leaving CEO Post

08/16/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Jeffrey K. Skilling said that the pressure he felt from Enron Corp.'s plummeting stock price was the main reason he decided to resign Tuesday as the energy giant's chief executive officer after only about six months in the job, Thursday's Wall Street Journal reported. 
In an interview Wednesday, the 47-year-old Mr. Skilling elaborated on his decision to leave Houston-based Enron (ENE). Tuesday, Mr. Skilling insisted he had resigned for "personal reasons" unrelated to Enron's business activities.
In the interview, he reiterated that he wasn't under any pressure to resign from the company's board or Chairman Kenneth Lay, who has resumed the CEO's duties at the nation's biggest energy trader. 
However, Mr. Skilling said that his "personal reasons" were deeply enmeshed with feelings that he had failed in a crucial business area during his brief tenure as CEO. Calling the company's stock performance a "kind of ultimate score card," Mr. Skilling noted that Enron's share price had fallen by some 50% this year. 
Mr. Skilling said he took that stock-price drop very personally. "I put a lot of pressure on myself" for that decline, he said. "I felt I must not be communicating well enough" with investors. He felt this particularly given Enron's strong financial results over the past several quarters, based largely on growing volumes in its trading business, which covers a range of items, including electricity, pulp and paper. 
If the stock price had remained up "I don't think I would have felt the pressure to leave," he said. 
In January, Enron topped $84 a share in New York Stock Exchange composite trading. It closed Tuesday, before the announcement of Mr. Skilling's resignation, at $42.93 a share. As of 4 p.m. Wednesday, Enron traded at $40.25, after falling below $37 during the day. 
Mr. Skilling, who had been at Enron 11 years, said the depressed stock price was particularly tough to explain to fellow Enron employees, many of whom are shareholders. "People would say `What is going on with the stock, Jeff?' I would have to say I didn't know. It has been frustrating," said Mr. Skilling. 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


Enron's Skilling says resigned due to plummeting share price

08/16/2001
AFX News
(c) 2001 by AFP-Extel News Ltd

NEW YORK (AFX) - Enron Corp's outgoing chief executive Jeffrey Skilling said that the pressure he felt from the company's plummeting stock price was the main reason he decided to resign. 
In an interview with the Wall Street Journal, Skilling said he was under no pressure from the company's board to resign.
But the "personal reasons" cited Turesday for his departure were deeply enmeshed with feelings that he had failed in a crucial business area during his brief tenure as CEO. 
Calling the company's stock performance a "kind of ultimate score card," Skilling noted that Enron's share price has fallen by some 50 pct this year. 
"I put a lot of pressure on myself" for that decline, he told the newspaper. "I felt I must not be communicating well enough" with investors. 
He felt this particularly given Enron's strong financial results over the past several quarters, based largely on growing volumes in its trading business, which covers a range of items, including electricity, pulp and paper. 
If the stock price had remained up "I don't think I would have felt the pressure to leave," he said. 
jms 
For more information and to contact AFX: www.afxnews.com and www.afxpress.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Skilling bids farewell to Enron 
After a tumultuous six months as the energy company's president and CEO, Jeffrey Skilling says "No mas," tendering his resignation.
Christopher Locke

08/16/2001
Redherring.com
(c)2001. Red Herring Communications. All rights reserved.

Enron (NYSE: ENE), the energy and gas wholesale giant that once could do no wrong, released some surprisingly bad news Tuesday. 
In a 10-Q filing, the Houston, Texas-based company reported a substantial negative cash flow in the June quarter. At the same time, it announced that president and CEO Jeffrey Skilling had voluntarily resigned from his positions. Kenneth Lay, Enron's chairman of the board, has assumed the CEO and president duties on an interim basis. Mr. Skilling will continue to serve as a consultant to the company and its board of directors.
Mr. Skilling's resignation, which came only six months after he assumed the CEO post, could be a big blow for Enron, since he was the key architect in helping convert the company from a gas-pipeline business into the dominant online energy trader in the industry. 
THE POWER'S STILL ON 
During a conference call to announce the news, Mr. Skilling said his choice to leave was "purely a personal decision -- it has nothing to do with Enron." He also said that he "feels bad" that this move might be construed as a sign of some type of negative relationship between himself and the company. Though Mr. Skilling, 47, was president and CEO for less than a year, he had been with the company since 1990. By voluntarily resigning and voiding his contract, which was to end in 2003, he will not receive a severance package, and his "no compete" clause will be enacted through the end of that contract period. Mr. Skilling did not return a call placed to his office. 
One source at Enron who asked not to be named said that the general mood at the company is relatively sad but that Mr. Lay is a "beloved figure" and people have confidence in his leadership skills. Mr. Lay was Enron's CEO from 1985 until Mr. Skilling's appointment earlier this year. 
During the conference call, Mr. Lay said that although he regrets Mr. Skilling's decision, he has never felt better about the company. "We have the strongest and deepest talent we have ever had and our growth prospects have never been better," he stated. Mr. Lay added that he expects no changes in Enron's earnings outlook and that the talent in the company is so deep that any slot for CEO will be filled internally. After the announcement, Enron's stock dropped 6.2 percent to $40.25, a 52-week low. 
UNDER PRESSURE? 
The most intriguing aspect of this unexpected move is Mr. Skilling's assertion that the choice was made solely for personal reasons, though during the conference call he asked not to be pressed about what those reasons were. Some sources suggest that the recent spate of criticism Enron has endured over a variety of issues might simply have been too much for Mr. Skilling to handle during his brief tenure as president and CEO. 
Recent allegations against Enron have ranged from charges of market manipulation and price gouging to wielding too much influence in Washington, D.C. The price of the company's stock has dropped by more than half since this time last year, and there are rumors of substantial layoffs. 
In addition, Enron -- which has blazed a trail in energy and natural gas wholesaling -- has hit its first major snag: its broadband project has, up to now, been a complete failure. The Broadband Services division accounted for just 0.12 percent of the company's $50.1 billion in revenue for the second quarter of 2001; that division lost $137 million before interest and taxes in the second quarter. In its latest 10-Q filing, the company states: "Enron is significantly modifying the cost structure of Broadband Services to correspond to slower market development and the associated lower revenue outlook.... Enron expects losses to continue through at least 2001 in the Broadband Services segment. Future profitability is dependent on the recovery of the broadband and communications sectors." 
For more on Enron, stay tuned for the September 1 issue of Red Herring magazine. 
Write to christopher.locke@redherring.com.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Financial Post: Briefing
Tracker
Enron shares decline after CEO resigns
National Post

08/16/2001
National Post
National
C02
(c) National Post 2001. All Rights Reserved.

HOUSTON - Enron Corp. shares fell as much as 13% after Jeffrey Skilling resigned on Tuesday, just six months after being promoted to chief executive of the biggest energy-trading company. Enron announced Mr. Skilling's departure after Tuesday's close of regular U.S. trading. Mr. Skilling, who said he left for personal reasons, is the third top executive to leave Enron in the past year.


Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Business/Financial Desk; Section C
THE MARKETS: STOCKS & BONDS
Shares Fall, With the Nasdaq Closing at a 4-Month Low
By Reuters

08/16/2001
The New York Times
Page 6, Column 5
c. 2001 New York Times Company

Stocks dropped yesterday, sending the technology-based Nasdaq composite index to its lowest level in nearly four months. 
Sagging corporate profits again appeared to be a concern for investors. ''People are very cautious,'' said Rick Meckler, president of Liberty View Management in Jersey City, ''and don't have the same willingness to bottom-fish and look out another year.''
Those who thought that the sluggish economy might have started improving by now, with the help of interest rate cuts, are finding that the troubles are proving to be longer-lasting, with companies expected to post another sharp decline in profits. The stock market has made little progress in the last few weeks as investors avoid buying shares until evidence of an economic turnaround seems apparent. ''It's a wait-and-see mode,'' said Peter Coolidge of Brean Murray & Company in New York. ''There is just no catalyst to move stocks one way or another.'' 
The Nasdaq index fell 45.64 points, or 2.32 percent, to 1,918.89 -- its lowest close since April 16. The blue-chip Dow Jones industrial average declined less steeply, falling 66.22 points, or 0.64 percent, to 10,345.95. The broader Standard & Poor's 500-stock index fell 8.71 points, or 0.73 percent, to 1,178.02. Market breadth was slightly positive on the New York Stock Exchange; on the Nasdaq, declining issues outnumbered those advancing, 2,123 to 1,535. Volume was 1.07 million shares. 
Hewlett-Packard was one stock leading the Dow lower. It declined 76 cents, to close at $24.10, ahead of an earnings report due after the end of trading today. 
Dell Computer fell $1.07, to $25.50, also ahead of its earnings announcement today. Credit Suisse First Boston, citing tough industry conditions, trimmed its 2002 earnings projection for Dell by 2.8 percent and cut its 2003 estimates 10 percent. 
Veritas Software fell $3.04, to $34.40, after Morgan Stanley analysts raised questions about the performance of some of the company's products. BEA Systems, the electronic commerce software maker, dropped $1.56, to $17.04. The company said that quarterly earnings met estimates, but it lowered its outlook for the rest of the year, noting the softness in the economy. 
Applied Materials, the semiconductor-equipment maker, rose 9 cents, to $43.74. It reported quarterly net income down more than 90 percent, yet still surpassed its target of breaking even in the badly slumping chip industry. Applied Materials said orders would remain weak in the fourth quarter, but be in line with those in the third quarter. Sales are expected to be flat, but the company said it expected a profit. 
Advanced Micro Devices fell 75 cents, to $14.75, after losing $1.11 on Tuesday. I.B.M. said it has stopped selling desktop PC's in the United States with the company's chips in favor of those made by Intel and might also drop them in Asia. 
Metromedia Fiber Network, of White Plains, fell 44 cents, to 70 cents. The company, which builds high-speed fiber optic communications networks in cities, said that its quarterly loss more than doubled from the period a year earlier and that it was still seeking financing. 
Among energy providers, Enron fell $2.68, to $40.25, on the news of Jeffrey Skilling's surprise resignation as chief executive. 

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

Treasury Prices Lower 
By Bloomberg News 
Bond prices declined on a report that factory output in July leveled off, suggesting to some that the Federal Reserve might not lower interest rates next week. The central bank, which has cut rates six times this year in an effort to reinvigorate the economy, has been expected to lower the federal funds rate again when it meets on Tuesday. 
The price of the benchmark 10-year Treasury note fell 8/32, to 100 2/32. Its yield, which moves in the opposite direction from the price, rose to 4.99 percent from 4.96 percent on Tuesday. The 30-year bond fell 4/32, to 98. Its yield rose to 5.51 percent from 5.50 percent.

Graph tracks the Dow Jones industrial average over the past year. (Sources: Associated Press; Bloomberg Financial Markets) Tables: ''Hot & Cold'' provides a look at stocks with large percentage gains and losses; ''The Favorites'' lists stocks held by largest number of accounts at Merrill Lynch. (Compiled from staff reports, The Associated Press, Bloomberg News, Bridge News, Dow Jones, Reuters) Graph: ''Freddie Mac Yields'' tracks average weekly yields on Federal Home Loan Mortgage Corporation 30-year and 15-year participation certificates since April 2001. Yields track changes in fixed-rate mortgages. (Source: Federal Home Loan Mortgage Corp.) 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	


Skilling quits, jolts Enron
Chidanand Rajghatta

08/16/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

WASHINGTON: Enron Corporation, the American energy giant whose Dabhol power plant in India has been in the eye of a storm over the past decade, suffered a stunning corporate loss on Monday when its Chief Executive Jeff Skilling resigned after only six months in the job. 
The news jolted the energy industry and Wall Street, sending the heavyweight stock, which has already fallen more than 50 per cent over the past year due to multiple setbacks, further down. Enron's paternalist chairman, the 59-year old Kenneth Lay, who had recruited Skilling, will return to the post he had held for 15 years.
The 47-year old Skilling, who was an energy consultant at McKinsey when Lay hired him, was considered something of whiz in the sector. He aggressively led Enron's transformation from an old-line natural gas pipeline company to a commodity trader in energy and bandwidth. 
But the makeover was accompanied by a plethora of setbacks, including the controversy over the Dabhol plant and the energy crisis in California. The company also attracted widespread opprobrium from many other parts of the world over the way it operated. As a result, Enron's stock, which reached a high of $90 last August, trades at less than half of that today. 
Skilling told the media that his reasons for leaving are "strictly personal and he'd just as soon keep it private," something CEO-return Lay confirmed. There are "absolutely no accounting issue, no trading issue, no reserve issue, no previously unknown problem issues" behind the departure, Lay said. 
Lay, who is a Republican Party heavyweight and could just as well have been the Energy Secretary in the Bush administration had he wanted the job, said he would remain as CEO till 2005, "to make sure we have plenty of time to work out an orderly succession." 
Skilling's exit comes on the heels of several other departures from the company over the past year, including that of Rebecca Mark, its high-profile executive who initiated the Dabhol plant and her successor Joseph Sutton. The company also recently lost Sanjay Bhatnagar, who was associated with the Dabhol plant since its inception and was its managing director. 
Rebecca Mark was washed up after Azurix Corporation, Enron's global water business that she was put in charge of, floundered. Bhatnagar was shifted to Singapore to handle Enron's broadband business but resigned his job in January this year "to pursue other interests."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

International
World Watch
Compiled by David I. Oyama

08/16/2001
The Wall Street Journal
A10
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Nicaraguan Power Plants Draw No Bids 
Nicaragua's attempt to sell six state-owned power plants faltered after the auction drew no bids, marking the latest failure in the country's privatization efforts. Nicaragua had prequalified three companies to bid for the six plants, including two hydroelectric generators, run by state electricity company Enel. The plants have a combined capacity of 350 megawatts. U.S. energy company Enron didn't present a bid before the deadline, while U.S. power company AES asked for an extension, a Nicaraguan official said. Canada's Hydro-Quebec didn't present a bid because it said Nicaragua's government couldn't provide a fiscally and legally stable contract. Enel is studying the possibility of launching a new sale either before or after Nicaraguan presidential elections Nov. 4. 

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Business; Financial Desk
Markets / Your Money Enron Stock Hits 52-Week Low on Skilling's Exit Reaction: Some analysts, however, reaffirm their confidence in the energy trader's bold strategy.
THOMAS S. MULLIGAN
TIMES STAFF WRITER

08/16/2001
Los Angeles Times
Home Edition
C-4
Copyright 2001 / The Times Mirror Company

NEW YORK -- Enron Corp. stock plunged to a 52-week low Wednesday as Wall Street reacted to Tuesday's surprise resignation of Jeffrey K. Skilling, chief executive of the energy-trading giant and one of the main architects of its bold business strategy. 
That strategy--shedding physical assets to become a high-tech middleman for goods as diverse as crude oil and fiber-optic broadband--has increasingly come into question as Enron's stock value has been sliced in half since Skilling took over the helm in February.
Still, several analysts kept the faith Wednesday. Goldman, Sachs & Co., Banc of America Securities and Bear Stearns all reaffirmed their positive ratings on Enron stock. 
Even an analyst who downgraded the shares said he was doing so more because of the uncertainty surrounding Skilling's exit than doubts about Enron's business direction. 
Skilling, 47, called his reasons for resigning "purely personal" and family related. He will continue as a part-time consultant while his mentor and predecessor, Enron Chairman Kenneth L. Lay, takes back the CEO post he had held for 15 years. 
After touching a 52-week low of $36.87 on the New York Stock Exchange early in Wednesday's session, Enron shares recovered to close at $40.25, down $2.68. Trading volume was huge, with more than 29 million shares changing hands--eight times the daily average for Enron. 
Donato J. Eassey, a Merrill Lynch analyst based in Enron's home town of Houston, cut his short-term outlook on the stock from to "neutral" from "buy" and dropped his long-term rating to "accumulate" from "buy." 
Enron tends to trade at more than 20 times per-share earnings, Eassey noted, while its competitors have price-to-earnings ratios of around 16. Enron's P/E premium could melt away "as this new uncertainty brings into question its sustainable growth outlook," Eassey said in a report issued Wednesday. 
The analyst stuck by his earnings estimates for Enron, however, noting that its core energy-wholesaling business is healthy. "It is the noise surrounding its other investments that will once again test Mr. Lay's ability to right the ship," he said. 
Part of the "noise" Eassey referred to is being made in California, where officials have accused Enron of profiteering during the state's electricity crisis by manipulating energy prices. 
Skilling, in an interview last month with the Associated Press, rejected the accusation in typically combative fashion. 
"If we were involved in creating the kind of price volatility that occurred in California, then we are the stupidest people in the world," Skilling said. "It has hammered our stock price and it has probably in some ways created a resistance to additional liberation of markets, which is what we built our entire business on." 
Indeed, if Enron's aggressiveness in California contributed to a climate of caution toward electric-utility deregulation in other states, it could be a major blow to the company's business plan, analysts said.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

USA: Enron reels as heir-apparent Skilling exits.
By C. Bryson Hull

08/15/2001
Reuters English News Service
(C) Reuters Limited 2001.

HOUSTON, Aug 15 (Reuters) - Jeff Skilling's bombshell resignation as president and chief executive of Enron Corp. just six months after taking the job sent the energy giant's stock tumbling on Wednesday and left Wall Street wondering who would replace him. 
Skilling, 47, was long considered the heir apparent to Chairman Kenneth Lay, who will reassume the CEO duties he handed to Skilling in February. Lay, 59, said he had signed on through 2005 in order to have time to prepare a successor.
But the stock market immediately made it clear that Wall Street was not in favor of the departure. Enron dropped to a 19-month low, shedding 6.2 percent or $2.68 to close at $40.25 on the New York Stock Exchange in heavy trading. 
Seeking to assuage concerns that Enron would have a clear executive succession plan, Lay told analysts Wednesday that he would search for his successor from a still-deep talent pool inside Enron. 
Grooming and promoting from the inside is almost a necessity given the company's entrepreneurial culture which encourages employees to create new business ideas and rewards those who succeed with promotions and greater responsibilities. 
"There is a lot of talent within Enron, and they have a deep bench of these people," Salomon Smith Barney analyst Ray Niles said. 
Lay mentioned Mark Frevert, head of Enron's core wholesale energy trading and marketing segment, Chief Financial Officer Andrew Fastow and Chief Accounting Officer Richard Causey, and Executive Vice President Steve Kean as evidence of Enron's management strength. 
With Skilling suddenly gone, Lay quickly acted to assuage investors that Enron would stay its course under his renewed watch. His return to full command was the logical choice, analysts said. 
"I think it is very reassuring. He is the architect of the company, the one who took it from an intrastate pipeline company to a worldwide energy company. There is probably no one more qualified," UBS Warburg analyst Ron Barone said. 
STEPPED OR PUSHED? 
Skilling and Lay both maintain the resignation was a purely personal decision and not related to Enron's recent, persistent stock weakness and string of high-profile stumbles. 
The Harvard Business School graduate suffered a bumpy ride during his short tenure in the No. 2 slot, where he was more often in the spotlight than the boss he took over from Feb. 12. And it was rarely pleasant. 
Skilling took persistent battering over the poor performance of Enron's broadband business, a costly payment fight with the Indian government over the $3 billion Dabhol power plant and the breakup of a marquee video on-demand broadband Internet deal with Blockbuster Inc. . 
California politicians also blamed Enron and others for causing their power crisis, and that culminated with a protester throwing a pie in Skilling's face while he gave a speech in San Francisco. 
Analysts were mixed on whether they believed Skilling was leaving for personal reasons, and not because of the recent woes that marked his tenure. Some suggested that the problems created increasing pressure and incredibly long time demands on Skilling. 
"I think the guy just said 'I've got more money than I can spend, I'm outta here,'" Barone said. 
One analyst who asked not to be identified said Skilling's identification with the limping broadband business may have led the board to ask him to leave. 
Niles said there was nothing good about Skilling's exit, because it leaves Enron without one of the key players in its emergence. 
"I think Skilling is their principal visionary, so he will be missed," he said.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Bandwidth Market: Price For OC48 Package Shifts Downward

08/15/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

HOUSTON -(Dow Jones)- The price for OC48 capacity on three routes shifted downward Wednesday in the bandwidth market, but no trades were done. 
The OC48 contracts are for bandwidth between New York and Los Angeles, New York and Miami, and Seattle and Los Angeles for calendar year 2003.
The price on all three routes as a package now is $0.00015-$0.000165 a DS0 mile a month. 
The previous quote for an OC48 for calendar year 2003 on the New York-Los Angeles route had been $0.00016-$0.00019/DS0 mile/month. But that contract is no longer being quoted, a trader said Wednesday. 
A contract for OC48 for calendar year 2003 on the Seattle-Los Angeles route last traded Aug. 1 at $0.000175/DS0 mile/month as part of a similar three-route package. 
A contract for OC48 capacity for 2003 on the New York-Miami route last traded Aug. 2 at $0.00016/DS0 mile/month. That represents a decline of $0.00001 on the offer price. 
Traders and brokers also spent much of the day discussing the surprise departure of Jeffrey Skilling as president and chief executive of Enron Corp. (ENE). Skilling was an early proponent of bandwidth trading. 
Although Skilling and the company said he was leaving for personal reasons, some wondered whether Enron's declining share price was the reason for the departure. In the last year, Enron shares had traded as high as $90.75 and as low as $42. But word of Skilling's departure sent the share price as low as $36.87 Wednesday, before it closed at $40.24 for the day. 
"I kind of believe what (Skilling) said," one broker said. "The guy helped build the company, you'd think the board would stick with him if he wanted to stay." 
-By Michael Rieke and Erwin Seba, Dow Jones Newswires; 713-547-9207; michael.rieke@wsj.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Enron's CEO Skilling Departs, Testing Enron Again
By Christina Cheddar
Of DOW JONES NEWSWIRES

08/15/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- The sudden departure of Enron Corp. (ENE) President and Chief Executive Jeffrey Skilling after six months on the job has provided yet another blow to the company's ailing stock price. 
Skilling is departing for undisclosed personal reasons, and his predecessor, Kenneth Lay, will replace him. Lay, who is currently chairman, has extended his employment contract by two years through 2005, and will look to mold the next level of succession.
Wall Street once marveled at Enron, the small Texas gas pipeline operator that seized the opportunities presented by deregulating energy markets to reinvent itself as the world's largest energy trading company. 
But more recently, Enron has been under fire, and its stock price, which has been more than halved since the start of the year, reflects that. 
"I think right now what you have is this panicked knee-jerked reaction," said UBS Warburg analyst Ronald Barone, commenting on the decline in Enron's stock price Wednesday. Enron shares set a 52-week low of $36.87 intraday, and closed at $40, down $2.93, or 6.8%. 
Barone, who met earlier Wednesday with executives as part of a previously scheduled meeting between UBS Warburg clients and Enron management, said he expects Enron stock will recover once "the dust settles," and investors begin to see Enron continue to move its strategy forward. 
"I don't think there is a need for any major tinkering," Barone said. 
Analysts expect to see Enron continue to reduce its international exposure, look to stem losses at its broadband division and more clearly communicate how it plans to continue to achieve sustainable profit growth. 
Departure Has Psychological Impact 

Still, Skilling's departure has had a psychological impact because he was seen as a key architect of the company's transformation. 
Skilling, a McKinsey & Co. consultant, started working with Lay and Enron in the late 1980s as the company was began its evolution to compete in the newly deregulated natural gas market. 
He later joined Enron in 1990, and served as chairman and chief executive of Enron North America Corp. and its predecessor companies from 1991 to 1996, before being named president and chief operating officer. 
J. Michael Walker, an Enron employee for 25 years, reported to Skilling in the mid-1990s. Walker, now a senior manager at CapGemini Ernst & Young, said investors have doubts about whether Enron can sustain its current earnings growth. 
"Very few investors understand they are the company that makes markets," Walker said. "The market cannot function without Enron." 
Walker expects investors will only be persuaded when they see the company continue to report strong earnings growth. 

The timing of the resignation also factored into the market's reaction to the news because the announcement came as the news flow had begun to turn in Enron's favor, said Anatol Feygin, an analyst at J.P. Morgan Chase & Co. 
Feygin cited the progress Enron is making in India as an example. Enron owns a controlling stake in the Dabhol Power Co., which operates a power plant that halted generating electricity in late May after the state-controlled power board, the plant's sole customer, stopped making payments for the power it purchased. After months of frustration and political wrangling, progress is being made. The Indian Supreme Court has handed down a favorable ruling, and federal ministers have agreed to a power bill that will reform the entire sector. 
Enron also continues to divest itself of non-core assets. Recently, the company sold its 50% stake in a power plant in Puerto Rico and the North American water business of its Azurix unit. 
However, some had been critical of the sales process because it was taking the company longer than expected to sell some of its non-core assets because of a weak global market. 
Feygin said Skilling may have made the mistake trying to implement the divestiture plan too quickly. 
Analysts see the sale of these assets as an essential part of Enron's strategy to focus more on its information-based and logistics businesses. 
In addition, the pressure caused by the California power crisis has eased. Enron was one of the companies selling power to the state's financially troubled utilities when power prices skyrocketed to record heights. As a result, Enron shares often were pressured whenever political rhetoric turned against power generators and traders in the Western market. 

Joseph Correnti, of Wayne Hummer Investments, said the news of Skilling's resignation gave some investors another reason to sell the company's shares. 
"The factors are more perception than reality," he said. 
Correnti was reassured by the decision of Enron's Lay to replace Skilling because he is a known factor. 
Now, market watchers are focusing on getting to know others at the company who are considered to be among the company's rising stars. 
Lay cited, among others, Mark Frevert, chairman of Enron's wholesale trading business; Andrew Fastow, Enron's chief financial officer; and Richard Causey, the company's chief accounting officer; as potential candidates for second-in-command. 
CapGemini's Walker said Enron's talent runs deep. He cited Greg Whalley, president and chief operating officer of Enron Wholesale Services, as another example of an individual who can help Enron grow its market. 
Still, the questions about Skilling's resignation will persist for near term. Those questions gained fuel from the departures several executive over the past year, including Clifford Baxter, Joe Sutton and Tom White, who all served as former vice chairmen at the company and Lou Pai, the former chief executive of Enron Energy Services. 
In downgrading the near-term rating of Enron stock Wednesday to neutral, Merrill Lynch's Donato Eassey said it will take a while for the news of Skilling's resignation to "shake out, and for a new catalyst to take shape." 
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Aug. 15, 2001, 11:18PM
Houston Chronicle
Buried treasure? 
Historic status for pipelines resisted 
By JEFF BLISS 
Bloomberg Business News 
WASHINGTON -- Duke Energy Corp. set out to replace a 30-mile stretch of natural-gas pipeline in Pennsylvania and ended up underwriting a $350,000 history lesson. 
State officials, using a federal preservation law, recommended that the pipeline, known as Big Inch, be considered a historic site, because it was used to supply oil to the U.S. military in World War II. To get approval, Duke agreed to produce a video and booklet that documented the building of the pipeline, whose 1,476-mile length snakes from Texas to New Jersey. 
That was five years ago, and today what happened to Duke is becoming more commonplace. Pipelines owned by El Paso and Enron Corp. in states ranging from Arizona to Iowa to Pennsylvania have been recommended for historic status, adding costs and delays to attempts to replace or upgrade them. 
"This is silly," said Martin Edwards, a lobbyist for the Interstate Natural Gas Association of America. "These are buried natural gas pipelines." 
The companies' complaints have caught the ear of the Bush administration and members of Congress. When the House passed an energy bill this summer, it included a provision to exempt many pipelines from the historic-preservation process. The Senate is considering a similar measure. 
Historians and state preservation officials say there is nothing silly about the debate over what they regard as buried treasure. 
Large-diameter natural-gas pipelines began spreading across the American landscape in the 1930s through the 1950s. They brought a cleaner, more efficient alternative to the gas produced by coal that most pollution-choked cities and towns were using. 
The pipelines "changed a lot of people's way of living," said Lowell Soike, the deputy state historic officer for Iowa. 
Without the force of federal preservation laws, companies won't be compelled to document their pipelines, said Christopher Castaneda, an associate professor of history at California State University-Sacramento. 
The House provision also may prompt exemptions for other structures, leading to a loss of a wealth of historical information, Castaneda said. 
"This might be a dangerous precedent," he said. 
When Duke set out to replace its Pennsylvania pipeline, it sent a routine notice of its plans to the Federal Energy Regulatory Commission, the agency that oversees interstate pipelines. 
When Pennsylvania officials expressed interest in Big Inch, FERC launched a review to ensure Duke preserved the site's history to the state's satisfaction. 
Duke executives say they didn't protest when told of their pipeline's new status. "We got used to doing what it takes" to get projects approved, said John Pepper, a Duke executive who oversees compliance with federal laws. 
Duke began compiling research for a booklet and shot the video on the Big Inch and companion Little Inch. The pipelines got their names from the 24-inch and 20-inch diameter segments used in their construction. 
In the video, designed for fifth-graders and sixth-graders, a fictional character named "Professor Bob" describes how German U-boats roamed the Atlantic seaboard early in World War II and sank U.S. oil tankers at will. 
The federal government and a coalition of companies that included the former Standard Oil Company of New Jersey, Shell Oil Co. and Gulf Oil Co. conceived an overland route to avoid the submarine attacks. Big Inch would carry oil, and Little Inch would transport kerosene and other petroleum products. 
Men like "Wedgehead" Madden and "Hard Times" Schwartz laid 1,476 miles of pipe over a route that cut through the mountains, rivers and marshlands in just 350 days to complete Big Inch in 1943. Workers finished the final weld on Little Inch the next year. The pipelines were the longest and heaviest constructed at the time. 
Texas Eastern Transmission Corp., a unit of Duke, converted the Big Inch pipeline to natural gas after purchasing it from the government in 1947. The company turned over operation of Little Inch to the Texas Eastern Products Pipeline Co. 
The Big Inch story illustrates why a buried pipeline's legacy should be documented, historians and preservation officials said. Communities often mark unseen history, placing plaques where houses stood and trails meandered. 
"Just because it's not a physical manifestation we can see, I don't agree there's no history," Castaneda said. 
For several years, pipeline companies went along with states' requests. That changed when Houston-based El Paso this year decided to resist attempts to classify as historic its pipelines through Arizona. The company said the designation has added seven to eight months to repairs. 
Castaneda said that while he is against the historic-preservation exemption, he understands the pipeline industry's unwillingness to compromise. 
"Should a company have to spend tens of thousands of dollars to document history?" he asked. 

Aug. 15, 2001, 11:59PM
Houston Chronicle
Enron plans to quickly fill top positions 
By LAURA GOLDBERG 
Copyright 2001 Houston Chronicle 
Enron Corp. plans to move quickly to name potential successors to Jeffrey Skilling, who unexpectedly stepped down Tuesday as the energy giant's chief executive officer and president. 
Chairman Ken Lay took over as CEO, a role he gave up to Skilling in February. Lay is also serving as president. 
Within days or weeks, Lay plans to name two Enron executives to join him in the office of the chairman, Enron spokesman Mark Palmer said Wednesday. 
The two would get responsibilities that could give them an opportunity to become president or chief executive officer "at the right time," Palmer said. He wouldn't speculate on who might be named. 
Skilling surprised Wall Street with his announcement he was leaving for undisclosed "personal and family reasons." His decision, he said, wasn't related to Enron's business. 
Lay stressed that Enron is in good shape, no strategic changes are planned and no problems are about to be disclosed. 
But Skilling's resignation -- especially after just six months on a job he worked a long time to get -- raised questions among analysts, who were quick to note Enron's closing stock price had dropped from as high as $82 at the end of January to $42.93 Tuesday. Skilling's departure was made public after Tuesday's market close. 
Problems have dogged Enron, including troubles with its new broadband venture, uncertainty over its potential exposure from California's energy woes, continued disputes over a power plant project in India, and questions about the company's long-term strategy to expand from energy trading into a variety of other commodities. 
Skilling's departure simply added more questions, leaving investors wondering Wednesday who might fill the void and whether other problems are lurking. 
At one point Wednesday, Enron's stock declined to $36.87, but it gained ground by the time the market closed, ending the regular trading day down $2.68 at $40.25. 
Lay, when he spoke to analysts Tuesday during a conference call, stressed that Enron has plenty of experienced talent in its senior ranks. He said top executive roles would be filled internally. 
Names bandied about on Wall Street Wednesday as possible successors included Mark Frevert, CEO of Enron Wholesale Services; Lawrence "Greg" Whalley, chief operating officer of Enron Wholesale Services; and Dave Delainey, CEO of Enron Energy Services. 
In his call, Lay mentioned those three but also singled out other Enron executives including Stanley Horton, Kevin Hannon, Andrew Fastow, Richard Causey and Steven Kean. 
Analysts give differing views of Enron's talent pool. 
Carol Coale, with Prudential Securities in Houston, wrote in a research note that she was "concerned over the depth of management at Enron," while Raymond Niles at Salomon Smith Barney, also in a research note, talked about Enron's "deep bench." 
Coale met separately with Skilling and Lay on Wednesday and said she walked away feeling "no new bad news" is on the way from Enron. 
She expects Kenneth Rice, head of Enron's broadband unit, to announce his resignation soon but said it won't be a total surprise. Palmer declined comment. 
Two other executives left Enron earlier this year. 
The biggest question hanging over Enron is whether its move into markets such as metals and pulp and paper will prove wise, said Andre Meade, an analyst with Commerzbank Securities. 
The company's core business of wholesale trading and marketing of natural gas and power of remains strong, he said. 


CHINA: ANALYSIS-India investors seen gaining from U.S. policy shift.
By Nick Edwards

08/16/2001
Reuters English News Service
(C) Reuters Limited 2001.

HONG KONG, Aug 16 (Reuters) - Investors in India are set to reap the benefits of a shift in U.S. foreign policy that will urge faster progress on economic reform to provide Washington with a strategic counterbalance to China in Asia. 
Ratings agencies and the IMF have both broadsided India in the past week over a poor economic performance and its stumbling decade-long reform effort. But a $540 million trade concession from Washington, and reassurances that sanctions against New Dehli will be scrapped, are signs of better times ahead.
Investors hope keener U.S. interest in India could lead to a dynamic similar to that in China, which under constant prodding from Washington the past three decades has become a money magnet. China won 80 percent of Asia's foreign direct investment last year and has been a portfolio investor's haven in 2001. 
"The Bush administration is pretty determined to improve relations with India and improve its economic performance," Andrew Ballingal, director of global asset allocation at TAL CEF Asset Management, told Reuters. 
"It's always sensible when considering strategic partners to make sure their economy works," he said. 
Fresh support from India's single biggest trading partner - analysts say Indian exports to the U.S. top $9 billion and two-way trade is around $14 billion - could not be better timed. 
Export growth slumped to just 1.76 percent year on year in India's April-June first quarter, while imports fell 2.4 percent. Industrial growth recorded a dismal 1.9 percent year on year in May and overall GDP growth sank to 5.2 percent in 2000/01 from 6.4 and 6.6 percent in the previous two years. 
POLARISED PERFORMANCE 
Foreign fund investments in India's equity and debt had shrunk to $91 million in July from $900 million in January and the benchmark Bombay stock index has lost 16 percent, or $8.5 billion of its value this year. 
This comes while China's hard currency B-share markets have roughly doubled in value this year and its economy has defied the global slowdown with exports up 27.8 percent year on year in 2000 and annual GDP growth seen at about eight percent to 2003. 
The polarised performance is underscored by foreign direct investment (FDI). China snared $40.8 billion worth in 2000 compared to $2.6 billion spent in India, which has attracted just $23.6 billion over the course of 10 years of economic reform. 
But analysts say India stands to win as President George W. Bush draws a firm line between political and economic relations to counter the strategic gains China will reap from a U.S. policy of engagement to bring Beijing into the global trade system. 
"Trade between nations and commerce is good for the U.S. interest in general... if you trade you're less likely to fight," said Gene Galbraith, chief executive at analysts Asiawise. 
"But the pressure is on Bush from certain factions in the Republican party to be more firm on China," he said. "Bush is playing the India card against China in part... and America's views of India are changing rather rapidly for the good." 
Rather than being a passive pawn on the foreign policy board, investors say New Delhi should seek to capitalise on a shift in U.S. strategy to resolve reform fatigue. 
LUMBERING ELEPHANT 
"India has had the great misfortune to take British 1940s socialism and perfect it," Ballingal said. 
"India really is more of a lumbering elephant to China's leaping tiger, but people are too pessimistic about India. Things have improved over the past five or six years," he said. 
Advocates of India's potential say its burgeoning software industry - a global leader - large English-speaking middle class, huge one billion-strong population, accounting and legal infrastructure and its democracy underpin their faith. 
"China has been incentivised to kick-start reforms because of the WTO and the Olympics. The reason I'd put China ahead of India at the moment is because reform is already happening," Robert Penaloza, a fund manager at Aberdeen Asset Management said. 
"But just because things are not there it doesn't mean they can't be, so there is opportunity... the intention is there in the government, they just have to prove their intentions," said Penaloza whose firm manages about $300 million in India. 
A catalogue of delays in the privatisation of aluminium maker Balco, the Air India airline and now telecoms giant VSNL are unlikely to persuade sceptics. 
Bureaucracy does nothing to encourage doubters who see the woes of U.S. energy giant Enron - India's biggest foreign investor caught in a billion dollar dispute over a private power contract - as symptomatic of India's problems. 
If India gets its act together, economists like BNP Paribas' Andrew Freris say India could grow at nine percent a year, rather than stacking up opportunity costs of economic underperformance. 
With Washington wooing New Delhi in the Asia-Pacific power balance, investment capital may find itself serving the interests of foreign policy especially if China backslides on reform. 
"We think that FDI will continue to flood into China for years to come," Nicholas Bibby, an economist with UBS Warburg in Hong Kong said. "But if China fails to deliver for a lot of these companies, they may well start looking towards India."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

INDIA: Belgium's Tractabel pulls out of India - paper.

08/16/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, Aug 16 (Reuters) - Belgian utility Tractabel Power has exited an Indian joint venture becoming the fourth foreign company to pull out of the country's beleaguered power sector, a business daily said on Thursday. 
Tractabel has sold its entire 50 percent stake in Jindal Tractabel Power Company (JTPC) for 2.35 billion rupees, the Economic Times said. The stake was sold to the Jindal group and financial institutions.
Jindal officials were not immediately available for comment. 
India's power sector has been hit by a spate of pullouts by foreign companies and the continuing controversy over U.S. energy giant Enron Corp's power project. 
Enron has been fighting with a local utility over payment defaults and high tariffs and has already announced its decision to pull out of the $2.9 billion, 2,184 MW project. 
Foreign companies are upset over legal and bureaucratic hassles holding up their projects and the inability of cash-strapped state-run utilities to pay for power purchases. 
Indian laws do not allow direct sale of electricity to consumers and all power generated has to be first sold to the state utilities for distribution. 
Cogentrix of U.S., South Korea's Daewoo Corp, and Electricite de France have already pulled out of the country, while Britain's PowerGen Plc has made clear its desire to quit. 
JTPC is a 50:50 joint venture between Tractabel and the Jindal group, who are one of India's steel producers. The company runs a 260 MW power plant in the southern state of Karnataka which supplies power to a 1.6 million tonne steel plant owned by a Jindal group company. ($1=47.11 Indian rupees).

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

TERMS OF REFERENCE FOR INDIA'S ENRON PROBE TO BE FINALISED

08/16/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

MUMBAI, Aug 16 Asia Pulse - Maharashtra's Chief Minister, Vilasrao Deshmukh, said the terms of reference for a judicial probe into the Enron agreement would be finalised by August 21. 
"We discussed various aspects of terms of references but pending legal opinion on certain issues have postponed the coordination committee meeting to August 21," Deshmukh said after a Democratic Front (DF) coordination committee meeting.
The Chief Minister said the government has broadly accepted the draft document of terms of references prepared by DF allies, barring Congress and Nationalist Congress Party. 
"We have discussed certain issues at length, but we have to put the final terms of reference in a legal framework", Deshmukh said. 
He added that the government was likely to file a fresh affidavit in the Supreme Court, and "We have ensure that our case is not prejudiced there." 
On reports about winding up of Godbole renegotiation panel, Deshmukh said he will request the panel to carry on the renegotiation process, because even if Enron pulls out of the project, the panel's recommendations were required by the government. 
(PTI) 16-08 1712

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Enron's Former CEO Says He Failed in Some Businesses, CNBC Says
2001-08-15 19:55 (New York)


     Houston, Aug. 15 (Bloomberg) -- Enron Corp.'s former Chief
Executive Jeffrey Skilling, who resigned yesterday, said he
decided to leave the energy-trading company after feeling ``he had
failed in crucial business areas,'' financial news network CNBC
reported, citing the Wall Street Journal.

     Skilling quit just six months after he took the job, CNBC
reported. Skilling, who said he left for personal and family
reasons, is the third top executive to leave Enron in the past
year.

     Skilling, who joined Enron in 1990, said yesterday that the
company is sound, and that his reasons for quitting were strictly
personal and would be kept private.

     Many investors give Skilling much of the credit for
transforming Houston-based Enron from a slow-growth operator of
natural-gas pipelines into the second-biggest U.S. energy company
after ExxonMobil Corp. Enron's shares fell $2.68 to $40.25 today.