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

To: Art Baeckel who wrote (22378)	7/12/2001 2:20:36 PM
From: Steve Fancy	Respond to of 22640

Missed that Art, you are probably right as TNE looks to be the only one that turned up. Steve

To: Art Baeckel who wrote (22378)	7/12/2001 3:22:33 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

Morgan Stanley Starts Brazil's Telemar At Outperform July 12, 2001 NEW YORK -- Morgan Stanley's new Latin America fixed-line telecommunications analyst, Mario Epelbaum, initiated coverage of two Brazilian companies Thursday with outperform ratings and one with an outperfrom-v rating. "These stocks are suffering from very negative investor sentiment, and we see few prospects for relief in the short term. But we believe that the valuations and long term fundamentals are compelling," Epelbaum wrote in a report Thursday. He sees Brazil's telecommunications needs as grossly undeserved and believes that its telecom sector can continue to grow several points above gross domestic product for a number of years. Epelbaum replaces Luiz Carvalho, who has moved on to cover U.S. wireless companies for Morgan Stanley. Previously Epelbaum covered utilities for the investment bank. Telemar (TNE) is the bank's top wireline pick in Brazil. Epelbaum estimates that the company will have 15 million lines in service by the end of the year, the most in Brazil, and gives the stock an outperform rating and $21 12-month price target per American Depositary Receipt. The target represents upside of close to 60% from current levels. Morgan Stanley sees Brasil Telecom (BRP) as the defensive name among the country's sector pickings. Although an internal shareholder dispute threatens to harm the company's long term potential, Epelbaum gives the stock an outperform rating and $51 price target, representing close to 49% upside from current levels. The bank's analysis suggests that Embratel (EMT), which is controlled by U.S.-based WorldCom (WCOM), is more sensitive than its peers to changes in country risk and the weighted average cost of capital. Embratel holds a dominant 58% share of the Brazilian data market, but data revenues are slowing worldwide. Its other market, long distance, is set to open up in 2002, which is expected to chip away at the company's market share. Seeing most of the issues plaguing Embratel's stock as already priced in, the bank gives it an outperform-v rating and $9 price target to represent a 60% premium over current ADR levels. These Brazilian wirelines are all trading near historical lows under internal macroeconomic strains and pressures from neighboring Argentina. Brazil's currency has weakened about 20% year-to-date and many investors have hit the exits. -By Amy Guthrie, Dow Jones Newswires; 201-938-2225; amy.guthrie@dowjones.com