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

To: Tony van Werkhooven who wrote (22394)	7/15/2001 10:42:12 AM
From: Z Analyzer	Respond to of 22640

The Brazillian stocks should be down about 25% in us dollars due to the weak real, but the Brazilian phone companies, after losing half their value, from the cursory information I have found still llok to be in teens multiples of earnings vs TMX at 9 times. In other words they don't appear cheap. What am I missing? -Z

To: Tony van Werkhooven who wrote (22394)	7/28/2001 12:49:00 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Investors Look For Signs Brazil Banks Will Ride Out Storm Dow Jones Online News, 07/27/2001 13:58 SAO PAULO -(Dow Jones)- Investors will be looking out for signs that Brazil's key banks are riding out the impact of a slowing economy, an energy crisis and woes stemming from troubled Argentina when reporting season kicks off Monday. For now, analysts are divided on whether banks will be hurt by a possible deterioration in asset quality, increase in bad loan provisions and slowdown in lending growth as Brazil's public could well hold back on spending amid growing economic uncertainty. But analysts believe rising interest rates and a depreciating real will help Banco Itau SA (BITPY), Banco Bradesco SA (E.BBR) and Unibanco-Uniao de Bancos Brasileiros SA (UBB) weather any macroeconomic difficulties. This year so far, interest rates have risen 375 basis points to 19%, and the real has declined 21%. While events in Argentina and their potential impact on Brazil's economy are still unfolding, analysts for now don't believe the South American neighbor will impair banks' fundamentals. Banks with Argentine exposure may suffer some losses, but they are estimated to be very small, say analysts. Even Itau, they say, will largely emerge unscathed despite its being the only one of the three banks that has a retail operation in Argentina, which is known as Banco Itau Buen Ayre and has 80 branches in Buenos Aires. They add that Itau has been busy at winding down its lending to Argentine companies in case the South American neighbor ends up defaulting on its debt and that it is well placed to fend off any economic catastrophe. Antonio Klapka, banking analyst at ABN Amro, describes Itau as his favorite bank because of its unique earnings power and its "crisis-proof" balance sheet. Brazil's fourth-largest retail bank has earned itself an enviable reputation for being able to pull itself through a crisis. Take the first quarter: Itau unveiled a net profit of BRR625 million, compared with BRR365 million a year earlier. The result was boosted by a BRR154 million gain from the positive impact of a weak real as the bank holds a significant position in dollar-denominated assets. Four analysts then forecast the bank to post a net profit of BRR475.3 million. In the first quarter, the real had declined some 10%. Itau Seen Coming Out On Top Among Big Three Earners For the second quarter, Itau is expected to post a net profit of BRR777.1 million - according to a survey of analysts at Lehman Brothers, Bear Stearns and Credit Suisse First Boston. Forecasts range between BRR735.7 million and BRR829 million. During the same period a year earlier, Itau posted a net profit of BRR435 million. As a part of the bank's earnings, analysts are expecting Itau to unveil a non-recurring gain of about BRR225 million after the Brazilian bank recently sold part of its national telecommunications network to Telefonica SA (TEF). Bradesco, Brazil's second-largest retail bank, is forecast by analysts to post a second-quarter net profit of BRR473.9 million, compared with BRR318.2 million in the second quarter of 2000. Analysts' estimates ranged between BRR440 million and BRR516.1 million. And finally, Unibanco - Brazil's sixth-largest retail bank. Analysts predict a second-quarter net profit of BRR245.1 million, compared with a 2000 second-quarter result of BRR104 million. Forecasts range between BRR208 million and BRR314.2 million. Bradesco will report its earnings Monday, followed by Itau on Tuesday. Unibanco has yet to disclose when it will release its results. -By Anthony Dovkants, Dow Jones Newswires; 55-11-3145-1478; anthony.dovkants@dowjones.com (This story was originally published by Dow Jones Newswires) Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved