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

To: Art Baeckel who wrote (21223)	8/3/2000 7:56:37 AM
From: Art Baeckel	Read Replies (2) \| Respond to of 22640

l stock index ends steady, politics weigh Reuters Company News - August 02, 2000 17:54 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 (adds relaxing fiscal targets paragraphs 3,9) By Nicholas Winning SAO PAULO, Aug 2 (Reuters) - Brazil's benchmark Bovespa stock index closed steady in nervous trade Wednesday after political developments swung the index more than one percent above and below the break-even point, traders said. The Bovespa ended the yo-yo session 0.15 percent higher at 16,314.47 points. Volume amounted to 578 million reais, compared with the July daily average of 624 million. Markets closed just before the government said it relaxed its fiscal targets for 2001 under an agreement with the International Monetary Fund. The move comes as the government tackles a political scandal over the siphoning off of public funds. "The political factor is what's most influencing the market," said Celso Senise, director of Sao Paulo's Bonval brokerage. "It's just a few participants who are pushing the market around." Chief among the political factors was a scandal involving the embezzlement of some $100 million in public money that has plagued President Fernando Henrique Cardoso in recent weeks. Political allies and several top businessmen rallied behind the president earlier in the day, but traders say the boat could rock some more when former Cardoso chief-of-staff Eduardo Jorge, who the media have linked to the scandal, gives evidence Thursday. Also weighing down the market was a Supreme Court decision on whether or not the government had short-changed contributions to the mandatory workers FGTS fund between 1987 and 1991, traders said. An hour before the market's close, the court delayed its ruling, which the Central Bank says could cost the government up to $30 billion, until next Thursday. It gave no reason for the move. But the government's announcement, late Wednesday, that it is now targeting a primary budget surplus for the public sector of 3.0 percent of gross domestic product from 3.35 percent previously, could help fuel investor confidence, economists said. Shares in state-owned Brazilian utility Cesp Parana were among the most traded on the Bovespa, shooting up more than 12 percent on the reemergence of speculation about the company's privatisation prospects, traders said. "The shares have hit these recent peaks because it's probable some investors have some details on the (privatization) transaction that haven't been made available to the market yet," Banco Cidade chief trader Tomi Taterka said earlier. Cesp spokesman Julio Lapa told Reuters there were no new developments in the privatisation timetable. The government has said the minimum price for the stock will be published this month and the auction will take place in November. The stock lost much of the day's gains to close 4.74 percent stronger at 21.2 reais. It closed 14.6 percent higher Tuesday. Also in the electricity utility sector, Gerasul suspended trading half-way through the afternoon session, pending the release of news it said could affect the stock price. The stock was down 3.1 percent at 2.52 reais. The trading halt follows sharp gains in the stock last week on optimism the company's Belgian parent, Tractebel , is set to launch a public offer to buy back the remaining Gerasul stock it does not already own, traders said.