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

To: Art Baeckel who wrote (21225)	8/3/2000 11:34:32 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

Brazil markets set to swing on political jitters Reuters Company News - August 03, 2000 09:04 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 SAO PAULO, Aug. 3 (Reuters) - Brazilian shares were set for a roller-coaster ride on Thursday as concern over a political scandal that's threatening to tarnish the presidency offsets optimism over healthy government finances, traders said. Investors may tread carefully ahead of the sheduled testimony later Thursday of former top presidential aide Eduardo Jorge before Congress on an embezzlement scandal involving up to $100 million in public funds. Offsetting the scandal-related jitters was the government's announcement late Wednesday that it relaxed its fiscal targets for 2001 under an agreement with the International Monetary Fund. "We should expect a lot of volatility in the market," said Herminio Lucci, a trader at Fator Doria Atherino brokerage in Sao Paulo. "The biggest issue today is Eduardo Jorge's testimony before Congress," although the former chief-of-staff to President Fernando Henrique Cardoso is not obliged to give testimony, Lucci added. "We'll be paying attention to how the market responds to the government's announcement on the primary budget surplus," said Lucci. The Bovespa index ended a yo-yo session on Wednesday 0.15 percent higher at 16,315, registering a turnover that was less than July's daily average. * If Eduardo Jorge gives testimony before Congress, investors will be watching for any evidence that could implicate Cardoso in the political scandal over funds siphoned from an over-budgeted courthouse construction project. * After the close of trading on Wednesday, Brazil's government said it lowered its primary budget surplus target to 3 percent of gross domestic product, from the previous goal of 3.35 percent, under an accord with the IMF. * Shares in Banespa bank may decline after the banking group said net profit in the first half of the year slid 44 percent compared with the year-ago period. "This was a very bad number," said Lucci. Banespa attributed the drop to healthy profits the bank posted in 1999 when interest rates skyrocketed to 45 percent, compared with 16.5 percent now. *Shares in state-owned utility Cesp Parana could extend a recent winning streak as investors seek to profit from the company's privatisation, scheduled for November. The stock shot up more than 12 percent on Wednesday.