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

To: Steve Fancy who wrote (1801)	4/21/1998 2:11:00 PM
From: Steve Fancy	Respond to of 22640

Sure seems like a buying opportunity...seems that American traders are leary without the support of the home market. I've been trying to understand what is causing the lull in enthusiasm. Seems that there's still uncertainty after Sergio Motta's death. I've been wondering how the fact that the receipts created as an alternative to holding TBR that are only available to the local market are affecting U.S. sentiment. Jeremy had offered the following statement on the matter. >>Steve, the advantage of the new locally listed "receipt" is that it allows current holders to BUY TIME. Note that this only affects LOCAL investors...not applicable to ADRs. If you are an institutional holder of TBR, and have your performance measured vs the Bovespa index, then right now you are in a tight spot. With TBR accounting for nearly 1/2 the value of the index, you run a big risk by NOT having exposure...you would actually be "short" the market. At the same time, you are painfully aware that the day is coming when you will need to surrender your precious TBR for 12 separate securities...some of which will be good, and some of which would best be described as toxic waste, and totally illiquid. As a mutual fund, you might even find that some of this toxic waste simply does not meet your basic investment criteria (ie market cap/ liquidity etc)...in other words, you probably will not even be ALLOWED to hold some of this stuff. In this situation, the last thing you want is to be forced to offload the radioactive stuff on day one. SO......anwer is, you exchange TODAY your TBR for the new receipt. You can then pick and choose the best moment in the future ( maybe long after the split up) to sell out your receipt, and buy in to the precise combination of subs that you have targeted. It buys you time, and takes away the immediate pressure.<< Any input? sf