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

To: Art Baeckel who wrote (21186)	7/31/2000 7:47:52 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

WEEKAHEAD-Latam stocks seen roiled by US rate fears Reuters Company News - July 30, 2000 12:33 Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Jump to first matched term By Susan Schneider MEXICO CITY, July 30 (Reuters) - Latin American stock markets will keep an eye on their powerful northern neighbour this week, with the possibility of another U.S. interest rate threatening to wreak havoc in Mexico and Argentina. After the U.S. government reported on Friday that gross domestic product grew at a breakneck 5.2 percent pace in the second quarter, investors around the world are betting on another rate increase by the Federal Reserve. Rate jitters are likely to hit particularly hard in Mexico, thanks to its heavy dependence on the United States for export revenues, and in Argentina, where the peso currency's peg to the dollar makes the nation particularly sensitive to rate jumps. Brazil's battered stocks could fare better as traders see conditions ripe for a turnaround, though any rebound is expected to hinge heavily on a strong showing in U.S. markets. That leaves Venezuela as the potential bright spot of the week. An expected win by President Hugo Chavez in Sunday's presidential election could prompt investors to gamble that he will stick to his pledge to dedicate more time to fixing the country's economy. MEXICAN stocks are vulnerable not only to investor worries about a U.S. rate increase but also to the lingering effects of a U.S. decision to take action against Mexico for failing to curb the monopolistic powers of telephone giant Telmex. Telmex , the heaviest weighted share on Mexico's index , slid nearly 6 percent on Friday on the news, which could increase pressure to break up what Telmex rivals see as a near monopoly. "Obviously this affair over the monopoly is punishing Telmex shares and for that reason the whole market is falling," said one trader. Analysts say that although the majority of Mexican companies reported strong earnings in the second quarter, a few notable exceptions tempered an otherwise positive period, including Telmex. ARGENTINE stocks may extend last week's 4.4 percent slide as investors brace for another increasingly likely U.S. interest rate increase. The benchmark Merval index appeared to be in for a rocky road at least in coming days, though traders said its long-term prospects are not menaced by rising U.S. rates. "We're being careful, buying very cautiously. Conditions are not that good for the short term. For the long term, however, I would buy," said Mariano Arnau, a trader for Raymond James Argentina. BRAZILIAN shares, which have been battered lower in thin volume by successive losses on Wall Street, may be poised to climb but there are clouds on the horizon if key foreign markets see-saw or a public graft scandal grows, traders said. "The (Brazilian) market could post a good turnaround next week," said Roberto Dotta, fund manager with Tudor Asset Management in Sao Paulo. "The fundamentals are very positive." But lingering worries that a public scandal will implicate high-ranking government officials could also cloud the market, said dealers. The case involves graft of some $100 billion dollars destined for a public building project. Brazil's benchmark Bovespa index lost 5.2 percent last week to end at a two-week low of 16,485.6 on July 28. The index is down 3.6 percent since the start of the year. VENEZUELAN shares could be the beneficiaries of investor relief that the nation's extended period of political reforms has ended. Sunday's vote was Venezuela's sixth national election in less than two years and follows congressional and presidential votes in 1998 and two referendums and the election of an assembly to write a new constitution in 1999. The market's IBC share index rallied 2.5 percent last week on opinion polls showing a comfortable Chavez victory. In CHILE, the market was expected to endure a volatile session on Monday, the last day for companies to turn in their second-quarter results, traders said. The peso , which hit a historic low on Friday, will also be an influential factor as it has been pressuring equities as of late, they said. The IPSA index of leading stocks is emerging from a turbulent week after Friday's 1.79 percent decline to 95.68 took the week's plunge to 4.17 percent.

To: Art Baeckel who wrote (21186)	8/1/2000 7:49:22 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

UPDATE 2-Spain's Terra gains customers but losses deepen Reuters Company News - July 31, 2000 08:58 Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. (adds closing share price paragraph 3) By Dan Trotta MADRID, July 31 (Reuters) - Terra Networks , the top Internet service provider in Spain and Latin America, reported deepening first-half losses on Monday despite an increase in customers, with its shares diving in the wake of the news. Terra, a unit of Spanish telecoms giant Telefonica and in the process of taking over U.S. portal Lycos , piled up net attributable losses of 165.9 million euros ($153.3 million) in the first half, more than double the losses of 70.4 million euros a year earlier on a proforma basis. Its results sent Terra shares into a tailspin, closing 4.4 percent lower at 41 euros. The stock earlier fell more than six percent. Analysts said the losses appeared to come from steep operating expenses in advertising and marketing. "The number of subscribers and page views look pretty, but for these companies to regain their lost share value they are going to have to show better results," said Felipe Gomez-Serrano, an analyst at Caja Madrid. HONEYMOON ENDING "The honeymoon isn't over yet but it's starting to end," he said, adding that Terra revenues were better than he expected but the losses were worse than forecast. Terra shares have tumbled since peaking at an intraday high of 157.65 euros on February 14, just before a worldwide decline in tech stocks, but were still more than three times their debut price of 13 euros last November. Terra also has suffered from the ongoing $12.5 billion all-share acquisition of Lycos, as the market has considered it a high price to pay for the merged Terra Lycos to become the world's third-largest Internet firm operating in 37 countries. SALES, CLIENT BASE ON THE RISE The good news was that Terra's first-half sales rose 178 percent to 83.6 million euros ($77.26 million) on a proforma basis with help from higher advertising and e-commerce income. Terra said its subscriber base doubled during the first half of the year to 2.66 million customers, adding 174,000 new paying customers from January to June. Non-paying customers grew 167 percent in the first half of the year, largely due to new services in Brazil, Mexico and Chile, the company said. The company, set up in late 1998 as Telefonica Interactiva, expects to turn a profit in 2002. Its rapid growth was engineered by former Telefonica Chairman Juan Villalonga, who resigned last week amid a probe into alleged insider trading. Villalonga's replacement, Cesar Alierta, has pledged to continue with all of the parent company's pending strategic deals, including the takeover of Lycos.