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Technology Stocks : Compaq
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To: rupert1 who wrote (54277)3/21/1999 3:31:00 PM
From: Racso  Read Replies (1) of 97611
 
Victor: the Brazilian devaluation started on Jan 12. The Real devalued from 1.2064 to 2.2150 per Dollar at its worst and now
has settled around 1.8526. Given the timing of CPQ's announcement, it seems the impact refers to Q4 receivables paid during Q1. In dollar terms, the impact at worst was close to 46% [i.e. US c82.89/Real pre-devaluation translated into US c45.15/Real at peak devaluation]. Currently, the impact would be close to 35%. I agree the Brazilian
situation is improving and the exchange rate has stabilized for the
last two weeks.
The actual impact is hard to estimate since it depends of their
exposure management. One thing we should all remember is that the
devaluation didn't take many multinationals by surprise [BKB actually
made money out of it].
On the impact of the Brazilian devaluation on other Latin American sales, I think CPQ was expressing its worst fears [economic recession
in neighbor countries]. Those fears have subsided as Brazil stabilizes.
Re my comment on other brokers "catching up" with Kumar, I meant it
facetiously...
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