Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.896

-0.9%

Nov 21 3:59 PM EST

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To: Tony van Werkhooven who wrote (11915)	1/18/1999 10:31:00 AM
From: Steve Fancy	Read Replies (1) of 22640

Stocks rebound as fears over new forex regime subside After the staggering hike of over 33% last Friday, one of the highest nominal surge in history -- second only to the 36.05% high recorded in February 1991 -- investors expect the market to step back into reality today. The announcement this morning of the Brazilian Central Bank's new foreign exchange regime -- which culminated in the permanent free-float of the real -- was almost everything market participants were expecting and made bourses revert their downward trend, though it may not be enough to sustain another day of hikes. As a result, some analysts expect the São Paulo stock exchange (Bovespa) to lose part of their accumulated gains of Friday. Market participants also explain that bourses should probably remain hostage to developments in the country's capital, Brasília, where the government is trying to rush Congress to finish voting on tax-raising and cost-cutting measures to comply with the International Monetary Fund performance targets and so ensure the loans disbursements. "Approval (of the measures) will allow international investors to re-rate Brazil," the England-based newspaper Financial Times explains in its today's online edition. "Failure would fuel volatility, causing many more bouts of indigestion for investors." Investors will be also closely watching the developments of the meeting among states governors opposed to the federal government as they urge the creation of a new economic policy and the renegotiation of their debts with the federal government. The meeting, some say, may be pure TNT as it is expected to be conducted by Itamar Franco, Minas Gerais state governor. Franco decided some two weeks ago to halt payment on the state's debt with the government for 90-days, strongly hitting Brazil's market and stock exchanges worldwide. (By Paulo R. Monteiro Dias)

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