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

To: steve kammerer who wrote (6775)	8/17/1998 5:29:00 PM
From: Steve Fancy	Respond to of 22640

FOCUS - Russia could sideswipe LatAm markets Reuters, Monday, August 17, 1998 at 16:56 By Ian Simpson NEW YORK, Aug 17 (Reuters) - Russia's deepening financial crisis could sideswipe struggling Latin American equity markets, with Brazil the most vulnerable, analysts and fund managers said Monday. They told Reuters any jolts to bourses in Latin America and other emerging markets worldwide would be caused at this point mostly by Russia's troubles, including Monday's devaluation of the rouble. A Russian effort to generate hard currency by boosting exports of oil and other commodities also could hurt Latin America. "People are heading for the hills with regards to emerging markets," said Leila Heckman, head of global asset allocation at Salomon Smith Barney. "If there continues to be that sentiment of capital moving away from emerging markets it's going to affect Latin America." Ed Cabrera, Latin American strategist at Merrill Lynch, said traders might want to get into Latin American markets now as prices fell. However, "fundamental," or longer-term, investors, might have to wait until the fourth quarter of 1998 for Latin American markets to settle enough to put money in them. "I would definitely be cautious before the end of the year," he said. Cabrera said Merrill Lynch had 13 percent of its Latin American portfolio in cash, a record high. Russia moved to restore confidence in its shaky financial system Monday by effectively devaluing its currency as much as 30 percent. Among other moves, the Kremlin also set a 90-day moratorium on some foreign debt repayments. The moves shook Latin American equities. One Latin American stock indicator, the ING Barings index of leading regional equities <.LAT>, was down 1.85 points, or 1.37 percent, at 132.76 points in mid-afternoon. The index has fallen almost 30 percent since the start of the year, buffeted by worries about Russia, Asia and emerging markets overall. American Depositary Receipts in Brazilian telephone issue Telebras SA (SAO:TELB3) (NYSE:TBR), a bellwether for emerging markets, was off 9/16 to 94-15/16. Telebras was the most active issue on the New York Stock Exchange. Brazil is particularly vulnerable since it has a stubbornly large deficit in its current account. A consensus estimate has put the shortfall this year at about four percent of gross domestic product. Brazil's currency, the real, also trades in an officially set band against the dollar, just as the rouble does. Ray Kelly, Latin American director at Robert Fleming Securities, said one focus would be reserves Brazil had to defend the real against speculative attack. Brazil's Central Bank has about $70 billion in foreign reserves. However, "unless it went down to the $55 billion level, I don't think it would give them much of a worry," Kelly said in a telephone interview from London. Chip Brown, Latin American economist at Morgan Stanley Dean Witter, said pressures on the real and the Mexican peso was "a reasonable expectation." In a report, he said Russia was not a major threat to Latin America. He added, "We don't think the Brazilian real is going to allowed to depart from its seven percent nominal devaluation regime, nor do we expect much else." Analysts and fund managers also said Russia might hurt Latin America if it tried to boost exports of commodities such as oil and metals in an effort to generate hard currency. Latin American countries are heavily reliant on commodity exports. In particular, Mexico and Venezuela are big oil producers. However, analysts noted Russia already was exporting as much oil as it could. "I don't think that is going to make a change in the price of oil," said Francis Claro, co-portfolio manager at Evergreen Latin America Fund in Boston. Copyright 1998, Reuters News Service

To: steve kammerer who wrote (6775)	8/17/1998 5:30:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shares end 1.53 pct lower as Russia rattles Reuters, Monday, August 17, 1998 at 17:03 RIO DE JANEIRO, Aug 17 (Reuters) - Brazilian stocks closed down 1.53 percent on Monday as jitters about a Russian currency devaluation unnerved investors around the world. Even so, local traders said first-half company results have been generally positive, and that would boost Brazilian shares if the Russian economic crisis did not hit emerging markets too hard. "If the external factors don't get worse, the market could rebound a little," one trader said. Sao Paulo's Bovespa index (INDEX:$BVSP.X) of 51 top shares ended off 134 points at 8610 points. Copyright 1998, Reuters News Service

To: steve kammerer who wrote (6775)	8/17/1998 5:34:00 PM
From: Steve Fancy	Respond to of 22640

But then seems a couple times a week I read stories like the one below. Corporate America seems to believe in Brazil. sf ==================== OfficeMax to open Brazil stores through venture Reuters, Monday, August 17, 1998 at 16:56 CLEVELAND, Aug 17 (Reuters) - OfficeMax Inc.(NYSE:OMX) on Monday said it entered into a joint venture agreement to form a Brazilian company that will operate office products superstores in Latin America's largest economy. OfficeMax, the third-largest U.S. office supply chain, behind Office Depot and Staples, said it agreed to form the Brazilian company with MGDK & Associados, a Brazilian-based new business development, consulting and investment group. OfficeMax will initially own a minority interest in the venture and may increase its ownership to a majority position. "We believe that Brazil's population of over 160 million people, with nearly 16 million in Sao Paulo, and a country with one of the 10 largest economies in the world has the potential to support up to 50 OfficeMax superstores," Michael Feuer, OfficeMax's chairman and chief executive, said in a statement. The office products and services industry in Brazil is estimated $26 billion. A typical OfficeMax superstore is about 23,500 square feet and offers office supplies, business machines and electronics, computers and software, office furniture and digital printing services. A spokesman said the first Brazilian superstores will open in the spring, but he did not give a number. The move represents the third international joint venture for Shaker Heights, Ohio-based OfficeMax, which operates a total of 310 outlets in Mexico and Japan, as well as the United States and Puerto Rico. In November 1995, OfficeMax formed a partnership in Mexico. The company said its Mexican operations have exceeded original expectations, turning profitable a year earlier than anticipated. The spokesman said OfficeMax expected to increase its holdings in the Mexican venture to "an equity position" from the current 19 percent before the end of the year and to increase the number of stores to 15 by year end from 10 now. In December 1996, OfficeMax entered into a joint venture agreement with Jusco Co. Ltd. (OSA:8267), a Tokyo-based international retail chain, to operate OfficeMax superstores in Japan. The spokesman said the OfficeMax stores in Japan were doing well, despite the Asian country's current economic turmoil and that it plans to open three to five stores there by the end of the year. There are two in Tokyo currently. MGDK & Associados is engaged in various investment projects including the management and restructuring of Caloi, South America's oldest and largest bicycle manufacturer, and Fontus, a new financial services company based in Sao Paulo. Copyright 1998, Reuters News Service