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

To: Steve Fancy who wrote (6531)	8/11/1998 11:58:00 PM
From: Steve Fancy	Respond to of 22640

TABLE -Telerj (SAO:TERJ3) 6-mo net 89.708 mln reais Reuters, Tuesday, August 11, 1998 at 19:17 SAO PAULO, Aug 11 (Reuters) - Brazilian telecommunications firm Telerj (SAO:TERJ4), which serves Rio de Janeiro state, released the following financial results Tuesday for the January-to-June period. Jan-June 1998 Net 89.708 mln Net Revs 685.904 mln Gross Revs 1.024 bln Oper Profit 52.022 mln Pre-Tax Profit 45.459 mln Net Worth 2.970 bln NOTE: All figures in non-inflation-adjusted Brazilian reais. No comparative figures were given. Telerj is one of 16 operators under the control of holding company Tele Norte Leste Participacoes, which was privatized on July 29. Prior to the sale it was spun off from federally owned Telebras (SAO:TELB4). Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (6531)	8/12/1998 12:03:00 AM
From: Steve Fancy	Respond to of 22640

ANALYSIS - Brazil stocks in for rocky ride Reuters, Tuesday, August 11, 1998 at 19:27 By Shasta Darlington SAO PAULO, Aug 11 (Reuters) - Brazilian shares tumbled for the eighth consecutive session on Tuesday in a clear sign that the nation's stock markets are in for a bumpy ride even if the country's economic and political outlook improve, analysts said. President Fernando Henrique Cardoso's administration has reined in soaring interest rates to pre-Asia crisis levels, posted a monthly trade surplus and virtually guaranteed its re-election in October presidential races. The efforts shored up multinational industrial companies' confidence in Brazil, spurring multibillion dollar investments, especially in the telephone and electricity sectors. But they have failed to prompt foreign institutional investors to pour funds into the country's stocks, traders said. "There are big risk premiums for emerging markets right now and anything else is a non-issue," said Flavio Menezes, who manages $350 million in equities at Banco Patrimonio. "There is no way Brazil is going to decouple from the U.S." Sao Paulo's key Bovespa index of the 58 most-traded shares has plummeted more than 16 percent in the last seven sessions. The decline began just two days after Brazil completed its biggest privatization ever, fetching a whopping $19 billion for telephone monopoly Telebras amid strong investor interest. On July 31, local stocks went into a tailspin that gives no sign of letting up. Many investors had expected Brazil's massive Telebras privatization to jump-start the markets again, sparking interest in telephone stocks and luring foreign investors back to the Bovespa. "The Telebras privatization was the carrot at the end of the stick," said Alex Debethmann, a portfolio manager who manages Latin America equity funds at Federated Investors in New York. "It was supposed to turn everything around." Euphoria over the Telebras sale and expectations that proceeds would take a chunk out of government debt gave the Bovespa a quick boost, but the share rise only lasted two days. . Many foreign fund managers have reduced Brazil and other Latin America funds on growing devaluation concern amid market instability in Russia and Asia. "Privatization may affect long-term growth prospects, but it doesn't reduce risk perception in the short-term," Patrimonio's Menezes said. Even if jitters over emerging markets ease and the Dow struggles out of its slump, Brazil has its own fiscal problems to tame before investors jump back into stock markets, traders said. "The day that Brazil balances its budget we could see investment inflows again," said Valmir Celestino, a portfolio manager at Banco Safra in Sao Paulo with $100 million in equities. "In the short-term, I don't expect any changes." Once the darling of foreign and domestic investors, Brazil's Bovespa index has seen trading slip to below 700 million reais per day. That compares to peak trading of about 1.2 billion reais a day in June of 1997. The blue chip Bovespa and Latin American stocks in general crumbled last October as growing financial turbulence in Asia threatened to spread to the region, putting pressure on governments to devalue local currencies. Brazil's quick reaction to double interest rates, raise taxes and cut spending, alleviated pressure but brought the Bovespa's stellar rise to a screeching halt. "We need a much stronger improvement in the macro picture before direct inflows will increase," said Federated's Debethmann. Foreign investors are avoiding emerging markets like Brazil, turning instead to safe havens like U.S. equities or Treasuries, fund managers said. Within Brazil, investors are also opting for fixed-income securities. While trading activity is not expected to pick up until the external scenario improves, prices could rise, traders said. "If there is a turnaround, I see it in the fourth quarter," Debethmann said. Investors reluctant to buy Telebras (SAO:TELB4) shares, which account for about 50 percent of trading, might get back into the market once they have been replaced in a one-for-12 swap for shares in the 12 holdings that were auctioned off last month. The listing of the new companies is expected to occur in the next couple of weeks and not long after that the new owners of the companies could start announcing investment and growth expectations, traders said. "Once Telebras delists, people will start to focus on fundamentals," Debethmann said, referring to the one-for-12 swap. "And a number of stocks are looking extremely cheap." Others are less optimistic, pegging even long-term buys on positive signals from the U.S. market. "Prices are very cheap, but they can get cheaper," Menezes said. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (6531)	8/12/1998 12:06:00 AM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

FOCUS-Brazil stocks hit 9-mo. low, currency steady Reuters, Tuesday, August 11, 1998 at 21:47 By Shasta Darlington SAO PAULO, Aug 11 (Reuters) - Brazilian markets were rocked on Tuesday after more unfavorable economic news from abroad, with stocks plunging to a nine-month low and the currency stumbling, then regaining its feet amid reports of intervention by the central bank. The blue-chip Bovespa index (INDEX:$BVSP.X) tumbled 4.14 percent after more overnight market instability in Russia and Japan. The slide marked the Brazilian index's eighth consecutive day in negative territory and extended its losses for the year to more than 13 percent. The Brazilian currency, the real, held up despite morning nervousness. Brokers speculated that the Central Bank intervened by indirectly selling dollars to offset any perception that Brazil was facing mounting pressure to devaluate its currency. Brazil's real is closely watched in times of market upheaval, as the country shares some of the traits of the Southeast Asian countries that were forced to devalue last fall: huge fiscal deficits, a trade gap and a closely regimented currency. A sharp devaluation could likely trigger a regional crisis that would dwarf the meltdown of the Mexican peso in 1994. On Tuesday morning, the tightly controlled Brazilian real jerked lower against the dollar in spot and futures trade, but it bounced back before lunch. Officials pointed to the currency's stability as a sign that pressure from abroad would be limited to the stock market. "For the time being, this is an equities phenomenon. It has not had any affect on the currency, which is what is most important," a Finance Ministry spokesman said. Still, dollar traders attributed the real's strong rebound to heavy dollar-selling by federally-owned Banco do Brasil on behalf of the Central Bank. The real is widely regarded to be overvalued by between 10 percent and 30 percent. Economists say Brazil may not be able to resist devaluation should China take that option in response to an ever-weakening Japanese yen. The Brazilian real opened 0.16 percent weaker at 1.1708 reais per dollar from 1.1689 at Monday's close. But it strengthened to 1.1688 reais by the market's close. "The market opened very nervous, but it is a lot calmer now. There are rumors Banco do Brasil was selling dollars for the Central Bank, which they have done in the past," said a forex trader at an international bank. The speculation was backed by the fact that there was a net outflow of dollars from Brazil on Tuesday, a phenomenon that usually weakens the real. Traders said Banco do Brasil may have sold up to $300 million Tuesday to bolster the real. By comparison, the Central Bank sold between $8 billion and $10 billion to support the real during one week last October and November at the height of the Asian crisis. Brazil, in contrast with many emerging nations, has a huge foreign reserve war chest of around $70 billion, and thus is better able to defend its currency. The Central Bank would not comment on the Banco do Brasil selling rumors or the declining stock market. "If anyone says anything, it will be at the end of day," a Central Bank spokesman said in Brasilia. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (6531)	8/12/1998 12:08:00 AM
From: Steve Fancy	Respond to of 22640

Latin American stocks extend slide, hit by Asia Reuters, Tuesday, August 11, 1998 at 22:13 By Michael Christie MEXICO CITY, Aug 11 (Reuters) - Latin American stocks and currencies were pummeled on Tuesday as investors fled emerging markets, seeking shelter from financial storms in Asia that could pound other developing economies. From Argentina to Mexico, stock markets followed Wall Street's lead in frantically clawing back some of their steep losses just before the closing bell, when buyers rushed in looking for bargains. But regional share markets still ended at their lowest levels in months. "This was a really complicated day, with a lot of investors liquidating their portfolios," said analyst Hugo Dias Lourenco at C&E Consultores in Buenos Aires. Argentine stocks sunk to a 32-month low, down 4.35 percent at 489.66 points, after earlier falling more than 7.0 percent to 474.45 points. The Japanese yen's drop to an eight-year low against the dollar sowed near panic in Mexico's foreign exchange market, with the peso plunging 14 centavos against the dollar in early trade. The free-floating peso eventually pulled back from the brink and ended 8.6 centavos weaker at 9.1950/9.2000 to the dollar, a historic low. There seemed little immediate impact from a move on Monday by Mexico's central bank to tighten monetary policy by increasing to 50 million pesos from 30 million pesos the daily amount it leaves the money markets short. Mexican stocks ended at an 18-month low. The leading IPC index closed 2.76 percent lower at 3628.45 points, having lost more than 5 percent earlier in the day as Wall Street wobbled and world markets stumbled over the weak yen. Hugo Morales, director of analysis at Valores Bursatiles Mexicanos, said the drop "had been a bit exaggerated." "The Mexican markets have put up with a lot because the macroeconomic conditions and those of the companies in general are fine, but we're passing through a moment of extremely strong external pressure," Morales said. Tuesday's close was the lowest since Feb. 4, 1997, and meant Mexican stocks have lost 30.6 percent of their value in nominal terms and 39.2 percent in dollar terms so far this year. In Brazil -- seen as one of the most vulnerable of the Latin American economies because of its gaping current account deficit, weak fiscal discipline and an exchange rate widely seen as overvalued -- shares dived to their lowest since November. The Bovespa, which groups the 58 most active shares, ended down 4.14 percent at 8802 points. In Colombia, Peru, Chile and Venezuela, stocks tumbled over fears of Asian devaluations, financial trouble in Russia and as foreign investors took flight. Traders and analysts said they expected more of the same for Wednesday and perhaps for the rest of the month, depending on the yen's fate. In Argentina, bolsa officials went on the air to warn investors not to pull out. "The bolsa could fall further, but investors should think before selling because the rebound is always strong," said Eugenio de Bary, president of the Buenos Aires Stock Exchange. "This is a strong storm and Argentina need not be too scared," he said. mexicocity.newsroom@reuters.com)) Copyright 1998, Reuters News Service