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

To: Steve Fancy who wrote (6301)	8/4/1998 5:53:00 PM
From: Jerry A. Laska	Respond to of 22640

Steve, I look at what happened today and figure that it could have been worse. The last time we saw the Dow fall to these levels on the Dow TBR went to 101 or thereabouts. So it looks to me as if the auction was good for 8 points or so in relation to the Dow; not as much as I was hoping for but it's something at least. The way we charged through support at 8524 on the Dow (the low last June in that mini-correction) makes me think we continue down tomorrow morning and maybe get a little rally about midmorning or in the afternoon (maybe this is just wishful thinking). I guess from what I'm hearing that we can thank Ralph Acampora for this sell-off. Hang in there, Jerry

To: Steve Fancy who wrote (6301)	8/4/1998 6:29:00 PM
From: Jerry A. Laska	Respond to of 22640

Brazil's Telemar group seeks "strategic" partner BRASILIA, Aug 4 (Reuters) - The all-Brazilian Telemar group, which bought one of the telephone companies sold at last week's Telebras (TBR - news; TELB4.SA) privatization, will seek a ''strategic'' foreign partner to boost the consortium's competitiveness, an official with the group said Tuesday. ''The entry of our future partner will not just mean the entry of Telemar into the world market, but will also give it strength in the financial market,'' said Carlos Jereissati, president of La Fonte Participacoes, a Brazilian investment company participating in the Telemar group. Telemar won the bidding last week for Tele Norte Leste, a fixed-line company covering 16 Brazilian states from Rio de Janeiro in the South through the Northeast and into the huge Amazon region. It will pay 3.43 billion reais ($2.95 billion) for the holding company, which includes Telerj (TERJ4.SA) and Telemig (TMGR6.SA), two of the country's biggest telephone operations. On Wednesday, the government auctioned off a total of 12 companies spun off from the Telebras telecommunications system. The investment wing of Brazil's National Development Bank, BNDESPar, late Monday agreed to buy a 25 percent stake in Telemar for 686.8 million reais ($592 million). Jereissati said of that 25 percent, the BNDESpar intended to sell 15 percent to Telemar's future foreign partner. He said at a news conference that the partner would probably be ''Anglo-Saxon,'' and from the telecommunications sector. U.S. consultants McKinsey Inc. are drawing up recommendations for a suitable candidate to turn Telemar into ''a global player,'' he said. Jereissati also provided details on the ownership of Telemar. A 55.1 stake, representing Telemar's ''hard core,'' was owned by Brazilian construction company Andrade Gutierrez, industrial group Inepar (INEP4.SA), La Fonte, two Brazilian car insurers and other local interests. A group of Brazilian public sector pension funds held a further 19.9 percent and BNDESPar accounted for the remaining 25 percent. biz.yahoo.com

To: Steve Fancy who wrote (6301)	8/4/1998 6:31:00 PM
From: Jerry A. Laska	Respond to of 22640

Brazil Bovespa index down 5.29 pct, mirroring Dow SAO PAULO, Aug 4 (Reuters) - Brazil's key Bovespa (^BVSP - news) stock index plunged 5.29 percent in moderate trade following sharp declines in U.S. equities, brokers said. ''Local investors are dumping shares amid fears over the situation overseas,'' a trader at a local brokerage said. U.S. shares fell more than three percent on concerns over a weak Japanese yen and second half U.S. corporate profits. Sao Paulo's Bovespa index fell below 10,000 points shortly before close to 9,862 as Telebras preferred (TELB4.SA) tumbled 6.03 percent to 127.80 reais. Shares worth 772.4 million reais ($663 million) had traded hands. Telecoms stocks led the decline. Ericsson (ERIC4.SA) telephone equipment maker and Telesp (TLSP4.SA) regional telephone company were two of the worst performers. Ericsson preferred fell 10.45 percent to 24 reais and Telesp preferred fell 6.07 percent to 262.99 reais. biz.yahoo.com

To: Steve Fancy who wrote (6301)	8/4/1998 6:34:00 PM
From: Jerry A. Laska	Respond to of 22640

Brazil shrs close off 5.32 pct following Dow Jones SAO PAULO, Aug 4 (Reuters) - Brazil's key Sao Paulo Bovespa index closed off 5.32 percent in heavier than normal trade as investors dumped shares following a steep decline in U.S. equities, brokers said. ''The Brazilian market is very linked to the American, and for that reason we suffered this sharp drop,'' a trader at a local brokerage said. The Bovespa closed down for the third session in a row at 9,860 points. Despite a strong start, Brazilian equities turned around as U.S. stocks tumbled more than 3.4 percent on concern over a weakening yen and the impact on corporate profits. Telebras preferred (TELB4.SA), which accounts for about 50 percent of trading, plunged 6.47 percent to close off at 127.20 reais. Telecoms, which shot up following the Telebras privatization last Wednesday, led declining stocks. Telesp (TLSP4.SA) regional phone company plunged off 6.07 percent at 262.99 reais. Ericsson (ERIC4.SA) skidded 10.45 percent at 24 reais. Volume was slightly heavier than usual with shares worth 801.9 million ($689 million) trading hands, compared with average daily volume of about 700 million reais. biz.yahoo.com

To: Steve Fancy who wrote (6301)	8/4/1998 7:53:00 PM
From: Jerry A. Laska	Respond to of 22640

INTERVIEW-Brazil's July trade gap blamed on soy By William Schomberg BRASILIA, Aug 4 (Reuters) - Brazil's $380 million trade deficit in July was a blip in an otherwise improving foreign trade scenario and was caused mainly by a drop in the value of soybean exports, a senior trade official said Tuesday. ''Our aim is to gradually reduce the trade deficit but there will be some months when the trade deficit is bigger or smaller for specific reasons,'' Mauricio Cortes, the Industry and Commerce Ministry's foreign trade secretary, told Reuters. Brazil on Monday announced a July trade deficit of $380 million, compared with a trade surplus of $42 million in June -- the first time the monthly trade figures stayed in the black for more than two years. July's deficit -- which has yet to be revised to include unused import registrations -- was the highest since March's shortfall of $717 million and took the trade deficit for the first seven months of 1998 to $2.382 billion. Still, that is less than half the gap of $5.52 billion posted in the same period last year. While the government highlights growing exports in manufactured goods -- up 12.6 percent in the January-July period -- economists attribute the narrowing of the deficit to lower appetite for imports amid sluggish growth in the economy. A recovery in the economy and the subsequent demand for imports could renew pressure on the current account deficit, now stable at about 4 percent of gross domestic product. Cortes said lower world prices for soybeans cost Brazil about $400 million in July when compared with July 1997. ''Those $400 million more or less account for the deficit in July,'' Cortes said. Brazil's soybean farmers normally start to wind down shipments in July, with exports ending in August. Planting then starts for the new crop. But this year, growers have held back some of their production in the hope of an upturn in world prices, and exports were expected to continue until the end of September, helping the trade balance, Cortes said. The government expected coffee exports would rise in the second half of the year after a recent increase in international prices, he said. The last quarter of the year is normally the peak period for coffee exports. Problems with Brazil's computerized export-registration system also pushed up July's deficit, Cortes continued. For three days in late July, an as-yet-unknown amount of exports were not picked up by the system and will be included in August's figures, he said. Cortes declined to predict how the trade deficit might look at the end of the year -- Industry and Commerce Ministry Jose Botafogo has forecast a shortfall of $4.2 billion -- but he said it would be ''a lot lower'' than last year's $8.4 billion. Capital goods imports would probably rise in the second half of 1998, thanks to an expected acceleration in the economy and to new investments in the telecommunications sector after last week's privatization of the Telebras telecommunications system. ''But we're not worried about capital goods imports,'' Cortes said. ''On the contrary, they will enhance our export capacity so we welcome them.'' biz.yahoo.com

To: Steve Fancy who wrote (6301)	8/4/1998 7:55:00 PM
From: Jerry A. Laska	Respond to of 22640

Telefonica seen gaining from Brazil buys By Carlos Dias and Angelo Pavini SAO PAULO, Aug 4 (Reuters) - Spain's Telefnica (TEF.MC) paid a high price for the three Brazilian phone companies it bought last week, but its new dominance in the region should help it pay the hefty bill, analysts said. ''Telefnica didn't see these purchases just as an isolated deal,'' said Marcelo Mollica, an analyst at Brazilian bank Banco Icatu. ''The gains are strategic in global terms.'' Analysts said Telefnica's strong foothold in Latin America will improve its bargaining power with telecom equipment suppliers and in turn help it save money to pay for its recent acquisitions. Telefnica purchased one fixed-line and two cell phone operators during the privatization of Brazil's telecom giant Telebras (TBR - news) last week for more than $6.5 billion. The Spanish telecom firm already owns a stake in one of Argentina's two telephone companies, is outright owner of the major Peruvian operator, has a controlling share of Chile's CTC (CTC - news), and holds a seven percent stake in a Venezuelan phone company. ''Suppliers are going to fight to win contracts with these companies,'' said Virgilio Freire, president of the Brazilian branch of telecom equipment maker Lucent Technologies (LU - news). Analysts also said Telefnica's acquisitions in Brazil will put the company in a unique position to explore the country's largest and wealthiest phone markets. They said the Spanish operator could easily boost revenues by feeding new lines to more than 17 million phone-starved Brazilians. ''By increasing their installations they're going to have conditions to recover their investments more quickly,'' said Joao Miyashiro, an analyst at Brazilian bank Unibanco. Pundits also said Telefnica will have to adopt an aggressive pricing policy as well as a major staff overhaul, including severe lay-offs, to increase revenues. ''Telefnica should adopt the policy of looking for the fastest returns possible with the reduction of rates and an increase in lines,'' said Fabio Nazari, an analyst at Brazilian bank Fonte Cindam. Telefnica might also increase its gains in Brazil by collecting management fees from the companies it controls. Raising prices, analysts said, is not an option since Brazil's privatization rules state that Telefnica will not be allowed to raise phone rates in the first four years after the acquisitions. Telefnica put up a total of $6.509 billion at the privatization auction of Telebras on July 29, by far the largest sum offered by one single company during the sale. The Spanish operator bought the fixed-line unit Telesp Participacoes for $4.972 billion, or $7,102 per line. That sum is considerably higher than the average $2,600 paid per line for U.S. and Latin American phone companies, analysts said. Telefnica also bought cellular operator Tele Sudeste Celular for $1.169 billion, or $3,685 per line, and Tele Leste Celular for $368 million, or $2,825 per line. Some shareholders and rating agencies responded to the hefty price tags with caution. U.S.-based Standard & Poors' said last week it may cut Telefnica's credit ratings based on its recent investments in Brazil. biz.yahoo.com