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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: md1derful who wrote (21125)	7/15/2000 5:59:28 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil shares recover as scandal fears wane Reuters, 07/14/2000 17:24 By Andrei Khalip SAO PAULO, July 14 (Reuters) - Brazilian stocks surged 2.7 percent on Friday in recovering ground lost since a political scandal affecting President Cardoso broke out this week, as the day brought no major revelations about the involvement of any senior figures, traders said. "Yesterday there was all this speculation about some bombastic revelations in the special edition of IstoE magazine, so everyone was selling. But nothing big came out of it so the market started recovering," said Evandro dos Reis of Indusval Brokerage. The benchmark Bovespa stock index (INDEX:$BVSP.X) rose 2.66 percent to 16,880, mostly recovering from a sharp 3.6 percent dive it took on Thursday. Turnover, however, was very weak at 450 million reais ($250 million), even compared to Thursday's meager 516 million. The Bovespa is now 0.9 percent higher since the start of the month, but is still 1.2 percent lower than at the start of 2000. "There is still some risk of new twists in the scandal so no one wants to keep positions for the weekend," said Celso Cenise, head of equities at Bonval brokerage, who said he thought the scandal should die out as soon as the latest evidence showed that the opposition, which was pressing for a probe, was also involved. The unraveling political scandal started after the opposition urged an investigation into the embezzlement of as much as $100 million in public funds from an over-budgeted courthouse construction project. Political magazine IstoE published late Thursday transcripts of taped phone conversations linking a minister to a fugitive judge who's accused of siphoning off public funds from the project. Also on Thursday, a note published in a local newspaper showed President Fernando Henrique Cardoso authorized an increase in funds for the over-budgeted project. The government and the presidency says Cardoso is not involved, and in its turn bit back on the opposition, saying the Workers Party's representatives had also authorized the funding. "The patient is not out of hospital yet, but he's not dying," Cenise said about the market. "This black cloud is dispersing a bit. A couple of heads should roll, but most likely not very important." Stocks also got a boost from rising U.S. technology stocks as investors cheered tame inflation numbers in the United States that soothed concern over further interest rate hikes, traders said. Most liquid issues like state oil giant Petrobras (SAO:PETR4), telephone company Telemar (SAO:TNLP4) and electricity power holding Eletrobras (SAO:ELET6) garnered the most from the market's rising wave. "They were the ones which fell the most, hostages to their liquidity, and now they rise a good deal," said one trader. Petrobras rose 3.2 percent to 50 reais and Telemar was 2.6 percent higher at 45 reais. Brasil Telecom (SAO:TCSP4) soared 5.7 percent to 26.2 reais after announcing that it had closed a deal with Spain's Telefonica (MADRID:TEF) to buy an 85.2 percent stake in regional Brazilian operator CRT. Most telecommunication companies -- the hi-tech component of the Brazilian market - also jumped up as they normally do when the U.S. tech-heavy Nasdaq index is on the rise. In the U.S., the Nasdaq composite index gained 1.7 percent. Aracruz (SAO:ARCZ6), pulp and paper maker, rallied 3.4 percent to 3.7 reais on Friday following financial results published on Thursday, described by some analysts as "excellent". Even state bank Banespa (SAO:BESP4), recovered 3.4 percent to 48.6 reais after the nosedive of the past few days, when investors reduced their positions on fears that the bank's already much-delayed privatization could be postponed until as late as 2002. Copyright 2000, Reuters News Service