Brazil shares end higher amid optimism on telecoms
SAO PAULO, July 30 (Reuters) - Brazilian stocks closed up 3.76 percent as investors went after
shares of Telebras (TELB4.SA) and cellular phone companies amid optimism that new management
will bring needed investments and higher profits.
''Everybody's revising their evaluations in a more positive light,'' said Roque Sut Ribeiro, an equity
fund manager at Marka Nikko Asset Management in Sao Paulo.
Sao Paulo's key Bovespa (^BVSP - news) index of the 58 most active stocks closed up at 10,939.
Telebras preferred rose 5.86 percent to 144.5 reais, one day after the 12 units that were carved out
of the telephone monopoly were sold for $19 billion.
Investors were returning to Telebras stock in the last few days of its trading life as an avenue to buy
into the 12 holding companies that will soon replace the former telephone monopoly on Brazilian and
U.S. exchanges. Telebras' common shares closed up 5.5 percent to 105.50 reais on Thursday.
Total trading volume surged to 1.24 billion reais ($1.06 billion), the highest in more than three
months. Trading in Telebras shares accounted for more than 60 percent of total operations,
compared with the average of about 50 percent.
''Trading is heavily concentrated in Telebras and other telecoms,'' Ribeiro said.
Telebras shareholders will be able to take possession of the new shares as early as next week,
Brazil's securities and exchange commission CVM said. They also have the option of trading their
shares in for Telebras receipts (TELB40.SA) which will represent all 12 holdings.
Cellular phone companies such as Telerj Celular (TRJC6.SA) and Telesp Celular (TSPC6.SA)
outperformed the market after international heavyweights paid hefty premiums Wednesday to gain
control of fast-growing markets for wireless services.
Telerj Celular closed up 7.14 percent at 75 reais, while Telesp Celular surged to close up 9.66
percent at 125 reais.
Fixed-line telephone companies Telemig (TMGR6.SA) and Telerj (TERJ4.SA) bucked the market's
upward trend, leading declining stocks. The companies are controlled by Tele-Norte Leste, one of
the 12 Telebras units sold to a Brazilian investment group on Wednesday for more than $3 billion.
''The consortium that won doesn't have a telephone operator and that's caused concern,'' a trader at
a local brokerage said. ''There are also questions about how the group will meet investment
requirements.''
Telemig plummeted to close 12.95 percent down at 74.60 reais and Telerj ended off 1.6 percent at
80 reais.
Among blue chip stocks, state-controlled oil company Petrobras (PETR4.SA) closed up 1.16
percent at 262.01 reais, while Brazil's energy holding company Eletrobras (ELET6.SA) surged to
close up 5.04 percent at 37 reais. Cia. Vale do Rio Doce ended up 0.77 percent at 24.99 reais.
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