Brazil shrs tumble 6.13 pct on big dollar outflows
Reuters, Friday, September 04, 1998 at 17:21
SAO PAULO, Sept 4 (Reuters) - Brazil's Bovespa index closed
off 6.13 percent on Friday as reports of huge outflows from the
foreign exchange market unnerved investors already concerned
about a surge in capital flight from emerging countries.
"Today was a catastrophe," said Luiz Carlos Pires, a fund
manager at Agenda Brokerage. "And what's scaring everybody the
most is this constant exodus of dollars."
Sao Paulo's key Bovespa index tumbled to a 26-month low,
closing off 6.13 percent at 5,837 points. Shares recovered from
losses of more than 12 percent during intraday trading,
accompanying a slight rebound in U.S. equities, traders said.
Some traders also speculated that officials intervened in
stock and foreign exchange markets to stabilize prices in late
trading.
Concern over dollar outflows and Moody's Investors
Service's downgrade of Brazilian debt dominated investor
sentiment, however. Traders said that well over $1 billion left
Brazil in the form of net outflows from the commercial and
foreign exchange markets.
"In the afternoon, it looked like around $1.5 billion had
left," Pires said. "This is the worst atmosphere I've ever
seen, affecting stocks, futures and debt markets alike."
Banks led the market's decline along with Telebras common
(SAO:TELB3) which ended off 7.69 percent at 48 reais.
Unibanco (SAO:UBBR4) preferred plummeted 12.03 percent to
close off at 19.97 reais, while Banco Bradesco (SAO:BBDC4)
preferred ended off 7.58 percent at 6.10 reais.
Moody's announced Friday that it lowered the financial
strength ratings of Unibanco, Bradesco and Itau banks. On
Thursday, it downgraded Brazil's debt rating.
Itau (SAO:ITAU4) closed off 6 percent at 470 reais.
State-owned Banco do Brasil (SAO:BBAS4) plunged 10.42 percent to
end off at 8.60 reais.
Shares worth 684.3 million reais traded hands on Friday, up
slightly from the light volume see in the last two months.
Among blue chips, Telebras preferred (SAO:TELB4), which
accounts for up to 50 percent of trading, closed off 6.13
percent at 72 reais. State-owned oil company Petrobras
(SAO:PETR4) slipped 3.75 percent, ending off at 128.01 reais.
Eletrobras ended off 4.08 percent at 18.80 reais and iron
ore miner Cia Vale do Rio Doce (SAO:VALE5) closed off 9.09
percent at 14 reais.
shasta.darlington@reuters.com))
Copyright 1998, Reuters News Service |
