Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Steve Fancy who wrote (1591)	4/13/1998 12:33:00 PM
From: Steve Fancy	Respond to of 22640

Brazil mkts seen calm despite Motta's frail health Reuters, Monday, April 13, 1998 at 12:03 By James Craig SAO PAULO, April 13 (Reuters) - Brazilian stock markets should remain calm despite the worsening health of Communications Minister Sergio Motta, the muscle behind the nation's ambitious telecoms privatization, analysts said on Monday. "This shouldn't affect the markets because privatization is far along," said Regio Martins, a telecommunications analyst at Deutsche Morgan Grenfell in Sao Paulo. Motta, 57, a strong ally of President Fernando Henrique Cardoso who earned the nickname "bulldog" for his stocky build and unflinching loyalty to the president, was hospitalized on Tuesday with a lung infection that aggravated a chronic pulmonary illness. His condition worsened over the weekend and he was moved into the intensive care unit at Albert Einstein Hospital in Sao Paulo. On Monday, he remained in intensive care under sedation and breathing with the help of a respirator. The minister is seen as the architect and leading force behind the government's multi-billion-dollar sell-off of the telecommunications sector, including federal giant Telebras (SAO:TEL) (NYSE:TBR). His deteriorating medical condition has prompted speculation about a possible replacement and the impact of such a move on the market, which is driven by the performance of benchmark Telebras (SAO:TEL.P). Analysts said Motta's continued poor health, or even his possible death, were unlikely to derail Telebras' sale, expected to be the largest privatization in Latin American history and net Brazil some $25 billion in cash. The uncertainty was also not hurting stock prices Monday. The Sao Paulo bolsa opened firmer after the four-day Easter holiday weekend. The bolsa's Bovespa index (INDEX:$BVSP.X) of 51 leading shares was 0.23 percent higher at 12,002 points with benchmark Telebras preferred (SAO:TEL_.P) up 1.19 percent at 144.0 reais. Analysts said investors, encouraged by a new post-split-up Telebras share receipts program announced last week, shrugged off worries about Motta's health and pushed the market higher on Monday. The government plans to break up and sell Telebras in June or July, and most analysts said the process is too far advanced now to be disrupted. "We're moving into the final stretch of privatization," said an analyst at a local investment bank. "Even if someone else were named, it would not have a significant impact on the process." President Fernando Henrique Cardoso was likely Monday to name Communications Ministry Executive Secretary Juarez Quadros to replace Motta on a temporary basis. But the market already is speculating on a permanent replacement. "If it's not Quadros, it could be Mendonca de Barros," said Martins, referring to Luiz Carlos Mendonca de Barros, president of Brazil's National Development Bank (BNDES). Quadros is technically capable and has been No. 2 at the ministry under Motta. His presence would be comforting to the market, analysts said. But Mendonca de Barros would bring privatization and financing experience to the post. Some observers also said newly named National Petroleum Agency chief David Zylbersztajn, Cardoso's son-in-law, could be tapped for the post. Zylbersztajn, architect of Sao Paulo state's energy sector privatization program, is widely seen as a rising star. "He's kind of the man of the moment right now," an analyst said. james.craig@reuters.com))