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

To: Art Baeckel who wrote (21236)	8/4/2000 8:31:48 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

Brazil stock ends higher, but scandal nerves remain Reuters Company News - August 03, 2000 16:51 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 Nicholas Winning SAO PAULO, Aug. 3 (Reuters) - Brazil's benchmark Bovespa stock index took heart from a rally in U.S. markets to close stronger in light trading on Thursday, but traders said gains did not mean investors were no longer concerned about a government corruption scandal. The Bovespa index ended 2.5 percent stronger at 16,721 after another yo-yo session. Turnover was 431 million reais compared with July's daily average of 624 million. "It has much more to do with foreign markets than an improvement in the domestic political situation," said Marcelo Porto, a trader at the local Concordia brokerage. "I don't believe these gains are a change in the downbeat mood of the market." U.S. stocks fell early, then rallied to end higher ahead of U.S. employment data, due on Friday, which could give a clue to whether the Federal Reserve will raise U.S. interest rates this month. The technology-laden Nasdaq stock composite closed 2.8 percent higher, while the Dow Jones industrial average rose 0.17 percent. Pivatization-candidate Banespa was key among the eight losers on the index after posting a 44 percent drop in first half profits on Wednesday. Banespa stock ended 3.32 percent weaker at 46.89, its lowest close since October 25 when it finished trading at 46.50 reais. Banespa, Brazil's biggest and oldest state banks, said falling Central Bank interest rates since the 1999 currency devaluation had cut net profits down 324.2 million reais ($181 million). "This was a very bad number," said local Fator Doria Atherino trader Herminio Lucci before the market opened. Elsewhere in the market, electricity utility Gerasul chalked up a record high close of 2.88 reais after jumping 14.29 percent higher as players bought the stock ahead of a premium buyout offer from Belgian parent company Tractebel. Tractebel, the energy arm of France's Suez Lyonnaise des Eaux, said it would buy the 29.47 percent of Gerasul it did not own. It offered 3.0 reais per 1000 Gerasul shares. Also in the electricity sector, shares in state-owned Cesp Parana gained another 6.13 percent to close at their second highest-ever close of 22.50 reais on the back of renewed talk about its privatisation prospects. The stock hit a record of 27.80 reais on July 22 on speculation it would renegotiate some of it debt before it was privatised later this year. It was too early to say if political jitters had been lifted from the Bovespa. Markets were all ears for the latest on a scandal involving the embezzlement of some $100 million in public money destined for a Sao Paulo court construction project. The real currency closed marginally firmer after clawing back early losses as a congressional commission heard testimony from former presidential chief-of-staff Eduardo Jorge, linked in media reports to the scandal. Jorge has denied any involvement. "Whatever analysis you make is premature," Porto said. But he added that the testimony itself was a small victory for the government as it showed authorities were tackling the case.