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

To: Steve Fancy who wrote (6910)	8/20/1998 4:54:00 PM
From: djane	Read Replies (1) \| Respond to of 22640

Steve, if you don't mind, would you post some recommended links to follow Telebras, e.g., trade journals, Brazilian market news, etc. Much appreciated. djane

To: Steve Fancy who wrote (6910)	8/20/1998 5:16:00 PM
From: Steve Fancy	Respond to of 22640

Venezuela May Defy Odds, Avoid Imminent Devaluation By GREG CANCELADA Dow Jones Newswires CARACAS -- Despite widespread market panic about the future of the Venezuelan bolivar, analysts caution that the government still has some maneuvering room and can fend off a devaluation in upcoming months. "I don't think the government will devalue now. It isn't the right time," said Ricardo Penfold, chief Venezuela economist at Santander Investment Securities. After steadily growing in recent months, concern about the sustainability of the Central Bank of Venezuela's foreign exchange band system has turned into full-fledged panic. The Caracas Stock Exchange posted one of its largest percentage losses Thursday, the central bank was forced to intervene heavily to support the currency, Venezuelan instruments trading in New York plunged and markets across Latin America dove. Stunned senior government officials wondered what hit them. "Why is everyone insisting that we're going to have a devaluation?," an exasperated Teodoro Petkoff, the planning minister, asked midday Thursday in a radio interview. Government officials have consistently denied they're planning to devalue. But the perception that the Venezuelan government isn't sorting out its fiscal problems and the recent devaluation of the Russian ruble have led investors to question the bolivar. "It was a deadly convergence," said Carlos Janada, Latin American economist at Morgan Stanley Dean Witter. Though the government has slashed around 876 billion bolivars ($1=VEB574.50) in this year's VEB11.947 trillion budget due to slumping crude oil prices, it hasn't been enough to cover the concomitant drop in fiscal revenue. Instead, the government is holding out for higher non-oil tax revenue and borrowing abroad, which has made investors worry that it may eventually be forced devalue the bolivar and boost its dollar-denominated oil revenue if these two sources of income don't materialize.

To: Steve Fancy who wrote (6910)	8/20/1998 5:26:00 PM
From: Steve Fancy	Respond to of 22640

Latin ADRs Plunge,Hurt By Venezuela Fears,Russia Devaluation Dow Jones Newswires NEW YORK -- Latin American shares trading as American depositary receipts took a serious tumble Thursday, as investors already operating under the dark cloud of the Russian devaluation and debt restructuring added Venezuela to their list of endangered countries. "Every day there's another 'It' country," a dealer said, adding that this morning there was even talk about Argentina being the next nation under speculative attack, with Venezuela already two days old in the rumor mill. Venezuela has denied repeatedly speculation about a devaluation of its currency, the bolivar, but that didn't stop market participants from dumping its debt paper and equities Thursday. CANTV, Venezuela's most traded ADR, lost 13%, closing at its record low of 14 3/4. Traders said that most of the flow in Latin American ADRs was on the sell side Thursday, with large hedge funds shorting Latin American stocks and very few bargain hunters coming in on dips. But then again, for some a dip isn't as compelling these days, a dealer said. "For people who have to make sales and liquidate positions, if things are cheap, it doesn't matter, they're getting cheaper. It's about preservation of capital at this point," the dealer said. Bellwethers fell significantly Thursday. Mexican Telmex lost 8% to close at $40, while Telebras slid 6.3% to $86 1/8 in heavy volume, and Telebras HOLDRs lost 6.4% to $86 3/8. "Clients are saying 'Why did I come back from vacation?'" a dealer said. "And with Brazil, they're just fed up. They're slaughtering everything, spreads are growing." Some of the ADRs suffering worst losses were Mexican retail, food and beverage stocks, which have recently outperformed other sectors. Many of these stocks have "buy" recommendations on the back of the strength of consumer spending growth in Mexico, and recently didn't fall in tune with the broader Latin class, helped by an 11.8% increase in retail sales for June published Tuesday. Among them, pharmacy chain Grupo Casa Autrey fell a steep 11.3% to its 12-month low of $5 3/8, while tortilla maker Grupo Industrial Maseca lost 8% to $8 5/16. Bottler Panamco, based in Mexico but with operations in several Latin American countries, including exposure to Venezuela, dropped 10%, trading around five times its average volume. Dealers said that the weakness in the Mexican (MXN) peso didn't help ADRs either. Thursday the peso closed at a record low of MXN9.3450, from Wednesday's close of MXN9.1970. -By Margarita Palatnik; 201-938-2226; margarita.palatnik@cor.dowjones.com Dealers said that the weakness in the Mexican (MXN) peso didn't help ADRs either. Thursday the peso closed at a record low of MXN9.3450 per dollar, from Wednesday's close of MXN9.1970. (At 2051 GMT, the direction of the dollar against the peso was incorrectly stated).

To: Steve Fancy who wrote (6910)	8/20/1998 5:41:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Econ Crunch Creates New Class Of Militant Squatters Dow Jones Newswires SAO PAULO (AP)--For decades, the urban homeless seemed to hover on the fringes of society, bullied by police and politicians, invisible except during fires or floods. But now, a new group is speaking up loudly for the homeless - and invading public and private land to build homes. Almost overnight, the Union of Pro-Housing Movements has emerged as a voice for the dispossessed. Behind the group is a new breed of urban squatters, victims of an anti-inflation plan that has slowed the economy and sacrificed millions of jobs. "Today's homeless are mostly lower-middle class workers pushed below the poverty line by unemployment," said Valdiran Santos, a Roman Catholic priest who works with homeless. Down but not out, the newcomers often are better educated and have higher expectations than their neighbors born into poverty. And they're more likely to organize and make demands on the government. The Union took its tactics - invading vacant land and defying authorities to evict them - from its country cousin, the Landless Rural Workers Movement, known by its Portuguese acronym MST. "The MST managed to pressure the government to address the agrarian reform problem, and we'll do the same with the housing problem," said the Union's Rosangela Marcia Mirandola. The Union leads invasions of idle land and empty buildings it claims are being kept vacant by speculators. Members want the government to expropriate the property and sell it to them on favorable terms. "Everyone here does odd jobs as carpenters, construction workers, plumbers or hairdressers," said Maria da Silva Oliveira in Jardim Peri Alto, an outlying area that was occupied by 400 homeless families. "We'll pay for the land, as long as we can do so over a long period and at low interest rates." So far, city officials refuse to negotiate. "It will take a while, but eventually they'll be evicted," said Lair Krahenbuhl, head of the Sao Paulo Department of Housing and Urban Development. The problem is where to put them. Fewer than 20,000 families received low-cost housing in the past five years. Krahenbuhl admits there's a shortage of 500,000 units. And the demand keeps growing. The Rev. Santos estimates that some 3 million people now live on illegally occupied property in Sao Paulo. The movement has swelled with a surge in unemployment. Officially, the jobless rate is about 8%, the highest in 15 years. But independent analysts say the real figure is much higher - close to 20% in greater Sao Paulo, where more than 1 million workers have been laid off since 1996. The Union sets strict rules for its members, including a ban on heavy drinking, drugs, fistfights and sexual harassment. Anyone who breaks the rules is asked to leave. The idea is "to avoid crime and drug-related problems that often plague slums," said Mirandola. Like its tactics, the Union's discipline was inspired by the Rural Movement. Both groups have become channels for dissatisfaction with the government - and could be a factor in upcoming national elections. While there are no formal ties between the two, rural leaders say the urban homeless could be part of a larger, united movement of the disenfranchised. "We are not organizing in the slums, but we are always willing to provide suggestions and logistical support," said MST leader Joao Pedro Stedile. Still, turning society's have-nots into politically active citizens isn't easy. "Despite the outspoken leadership that has emerged among the homeless and landless, the rank-and-file are not politically motivated enough to organize themselves into a major confrontational force," said Jose Luciano Dias, a political scientist.

To: Steve Fancy who wrote (6910)	8/20/1998 5:47:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shares plunge with gloomy external outlook Reuters, Thursday, August 20, 1998 at 16:30 RIO DE JANEIRO, Aug 20 (Reuters) - Brazilian stocks plunged in late trade as a combination of negative external factors unnerved emerging market investors, traders said. The Bovespa index of 58 leading shares (INDEX:$BVSP.X) tumbled 5.22 percent to 8096 points at 1924 GMT and then slid down another percentage point to 7976 points a few minutes later. "The drop is solely a function of the external markets with Russia being the main problem. People just don't see a solution there," one local trader said, adding that Brazil's economic fundamentals were still holding up. Investors dumped Brazilian shares all day amid concern that Venezuela's economy was in as much trouble as Russia's and rumors that the Latin American neighbor might have to devalue its bolivar currency. Venezuelan officials vehemently denied that the government planned to devalue the currency, but the possibility that Russia's problems could hit so close to home cleared out Brazil's equity market. Brazil's currency, the real, weathered the storm, holding to positive territory amid reports of dollar inflows. Brazil's Central Bank director of foreign operations also sought to reassure investors that nothing in the current turmoil would cause Brazil to alter its policy of keeping the real strong. News that the United States had launched military strikes in Sudan and Afghanistan added to market jitters worldwide, but was not a particularly big factor in Brazil. "For us, it is more because other emerging markets are in trouble and we are an emerging market," another trader said. tracey.ober@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (6910)	8/20/1998 5:50:00 PM
From: Steve Fancy	Respond to of 22640

Brazil stocks finish 6.55 pct lower Reuters, Thursday, August 20, 1998 at 16:38 SAO PAULO, Aug 20 (Reuters) - Brazil's blue-chip Bovespa stock (INDEX:$BVSP.X) index was down 6.55 percent at 7982 points at Thursday's closing bell -- its lowest since Nov. 12 -- as investors sold across the board on a string of negative external news. "Things look very bad outside of Brazil. There's no way we can feel safe here," one local trader said. Brokers said investors feared Russia's financial woes, coupled with persisting speculation of a currency devaluation in Venezuela forced investors to flee from Brazilian stocks. A further slide on Wall Street also weighed on the Bovespa, they said. Brazil's bellwether Telebras preferred (SAO:TELB4) plunged 7.2 percent to 100.50 reais at the bell. Nervousness was reflected in Brazil's dollar-denominated C-bonds market, where papers lost 3.375 points to 61.250. But the currency market remained indifferent to equity turmoils. The real closed steady at 1.1740 reais to the dollar. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (6910)	8/20/1998 5:53:00 PM
From: Steve Fancy	Respond to of 22640

ADR REPORT - Emerging markets highlights - Aug 20 Reuters, Thursday, August 20, 1998 at 16:41 LATIN AMERICAN ISSUES DIVE AMID CURRENCY DEVALUATION RUMORS NEW YORK, Aug 20 (Reuters) - Latin American issues tumbled to their lowest levels this year in a frantic Thursday afternoon session as investors sold off their positions in the region amid rumors of a currency devaluation in Venezuela. "It's crazy," said one trader. "It's an unholy mess," said another. "There's some serious change being lost here." American Depositary Receipts (ADRs) for companies throughout the region followed local shares downward as investors stricken with panic ignored Venezuela's attempts to dismiss the rumors. Brazilian telecommunications giant Telebras S.A. (SAO:TEL_.P) (NYSE:TBR), considered the bellwether stock for the region, fell to its lowest price since late last year. Many issues from Venezuela, which are not usual fixtures of daily trading on the New York York Stock Exchange, were among the leading percentage losers. Although a third trader described the fall as a "meltdown," he said the small volumes being recorded throughout the session was responsible for most of the volatility. Telebras, for example, had been trading on a volume of less than four million issues up until the late afternoon, compared with the usual seven million, he said. "Its a case of people not reacting and just having a watch," he said. "You'd be silly to go in and buy because it's cheap. People are sitting on their hands." Venezuela denied it planned to devaluate the bolivar, calling the rumors "completely unfounded." The currency closed slightly weaker at 574.00/575.00 per dollar, well within the upper trading bands, according to Reuters calculations. Local shares, meanwhile, plunged nearly 10 percent to close at a new 28-month low. "The panic is incredible," said the first trader. "There's no way to stop it." Copyright 1998, Reuters News Servi

To: Steve Fancy who wrote (6910)	8/20/1998 6:00:00 PM
From: Steve Fancy	Respond to of 22640

Cardoso steps further ahead of Lula in presidential dispute - An Ibope poll conducted with 2,000 electors from August 14 through 18 indicates that President Fernando Henrique Cardoso has opened an advantage of 23 percentage points over his main rival, left-winger Luiz In cio Lula da Silva (PT). With 44% of vote intentions, Cardoso could be re-elected in first round vote since his stake is bigger than that of all other candidates combined. Lula has declined two percentage points, to 21%. Ibope executive director, Carlos Augusto Montenegro, sees no possibility of changes in the current scenario, despite the TV free electoral propaganda. PPS candidate, Ciro Gomes, remained in third place, with 5%, followed by En‚as Carneiro (Prona), with 3%. The survey shows that Cardoso gained votes from Lula and En‚as, since the total of undecided electors (15%) and void votes (11%) have not changed compared to the previous poll. (O Estado de S. Paulo/ Jornal da Tarde/ O Globo) BNDESPar to sell stake in Tele-Norte-Leste - Communications minister, Luiz Carlos Mendon‡a de Barros, said yesterday that the BNDESPar should offer in an auction his stake in fixed telephony company Tele-Norte-Leste, acquired by Telemar consortium. Mendon‡a de Barros denied that Anatel is preparing a secret list of prices for the sale of the so-called fixed telephony mirror companies. (O Estado de S. Paulo/ Jornal da Tarde/ Jornal do Brasil) Open capital companies gains improve in FH1998 - Balance sheets released in the first half of the year show that open capital companies saw their gains improve. The profit of 175 companies that have already released their balance sheets show total gains of R$7.446bn, 52% more than in the corresponding period last year. (O Estado de S. Paulo) Fipe measures 1.05% deflation in Sao Paulo - The Consumer Prices Index (IPC) as measured by Fipe-USP stood at 1.05% in the four-week period ended past Friday (14). That is the highest deflation registered since march 1986, when the survey was first conducted. See the oscillations of different items: Foodstuff -1.66% Housing -0.32% Transportation -1.25% Personal expenses -0.17% Clothing -3.27% Health 0.29% Tuition 0.08% (O Estado de S. Paulo/ Jornal da Tarde/ Folha de S.Paulo) Edited by Sergio Caldas