ADR REPORT - ADRs hit by profit-taking, Brazil
Reuters, Thursday, January 07, 1999 at 11:25
By Ian Simpson
NEW YORK, Jan 7 (Reuters) - American Depositary Receipts
(ADRs) slipped overall Thursday amid profit-taking and worries
about Brazil's economy.
Dealers said the drop was to be expected after U.S. and
European markets roared higher Wednesday.
The start of President Bill Clinton's impeachment trial in
the Senate also weighed on the U.S. dollar. The currency moved
higher through the morning to trade at 111.28 bid against the
yen.
"Some stocks are just giving up some of the ground they've
gained over the last few days, which was a lot," said Jim
Brophy, with ADR research at BT Alex. Brown.
The Bank of New York index of 445 leading ADRs <.BKADR> was
off 1.84 percent. The Dow industrials (INDEX:$INDU), which notched up
a 2.51 percent gain Wednesday, slipped 48 to 9496 points in
late-morning trade.
Worries about Brazil, Latin America's biggest economy, also
sent shudders through markets around the world. The governor of
Minas Gerais, Brazil's third-biggest state, declared a 90-day
moratorium on debt payments to the federal government.
The move is seen as weakening support for key fiscal
reforms aimed at raising $23.5 billion mandated by an
international loan agreement last year.
The dispute over debt "will show whether the federal
government is going to keep a close tab on things," a trader
said.
Bellwether Brazilian telephone issue Telebras SA (SAO:TELB4)
(NYSE:TBH) was off 1-7/8 to 76. Telephone company Telesp Par
(NYSE:TSP) slipped 7/8 to 21-1/2.
The ING Barings Latin American index of leading regional
stocks <.LAT> was off 2.3 percent.
European telecommunications ADRs gave up some of the strong
gains they registered Wednesday. Finland's Nokia Group
(HELS:NOKS.A) (NYSE:NOK.A) eased 2-8/16 to 138-15/16.
Telefonica de Espana (MADRID:TEF) (NYSE:TEF), which has major
investments in Brazil and other Latin American countries, was
off 10-1/8 to 153-1/2.
British mobile phone company Vodafone Group Plc (ISEL:VOD)
(NYSE:VOD) was off 5-1/4 to 175-1/2. The drop came after a report
that U.S. group MCI WorldCom Inc. (NASDAQ:WCOM) planned to top
Vodafone's estimated $55 billion offer for U.S. wireless
concern AirTouch Communications Inc. (NYSE:ATI).
ADRs allow U.S. trade of foreign shares.
Copyright 1999, Reuters News Service
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