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

To: jeremy smith who wrote (7210)	8/27/1998 7:17:00 PM
From: MGV	Read Replies (1) \| Respond to of 22640

Jeremy, I agree: barring Chinese/HK debacle, Brazil avoids significant deval. I'll take the analytical chain a couple of links further: barring Yen going to 160ish, China will not deval. and Chinese/HK markets will not be trashed. Further: barring Japanese inaction on structural reforms, the Yen will not see 160ish. It starts with Japanese reforms. Until the world's capital markets see that happen, many thinbgs will be capped, including any significant rally in TBR. I also agree that for the short term, a significant rally amounts to 90ish. A rally to 90ish could happen short of a real treatment of the cause of this tsunami (see Japanese reforms above). It would take only a stabilization of Russia and mitigation of the acute fear that we are seeing. But, a treatment of the cause as opposed to the symptoms would take TBR back over 100 - 110 fairly quickly in my view. How long? If Japan and Russia were to take the necessary steps within the next few weeks, and we put the election behind us, TBR would rally year end to well over 100. You are right about the relative attractiveness of emerging market debt vs. equity. But, the key there is the same as the key discussed above: alleviation of the threat of devaluation and by extension, flight of foreign capital and currency reserves. When that happens, implied yields/rates are free to go down in a big, big way. So, the debt vs. equity hurdle is really nested within the same events that would directly rally TBR. Last point - what does the short term hold? I agree again that we could dip intra-day to mid-to-low 60s, as frigging outrageous as that sounds, even as I write it. Un-frigging-believable! One question: Define your "long, long time to post sell off levels of trading." If all goes well, 1 year from now, I think we can easily be to 150ish. Mark

To: jeremy smith who wrote (7210)	8/28/1998 8:15:00 AM
From: DMaA	Read Replies (1) \| Respond to of 22640

Is the market ignoring the dividend these companies have been paying out? That yield must be getting up there at these prices. Too unpredictable? It help me hold on knowing it's not completely dead money though I guess it wouldn't be much of an inducement to buy.