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

To: Steve Fancy who wrote (7411)	9/3/1998 10:27:00 AM
From: DMaA	Read Replies (1) \| Respond to of 22640

Camdessus dismisses charges that the IMF's pockets are empty. "If a country asks for our assistance in support of a strong program, we will recommend to the executive board the normally jusified level of support," he said. That's not the story he tells the US Congress.

To: Steve Fancy who wrote (7411)	9/3/1998 12:17:00 PM
From: CuttotheCore	Respond to of 22640

Would hope there is some relief coming out of the imf-Latam meetings which translates into pos direction for the stock price. Overall the environment is more and more negative re Brazil and latam. Obviously now is the time to be investing, rather than the positive times just passed which only covered up the negatives of the region. Potential value is for the purchasers to realize and those patient enough to wait for. Latin American Slide Would Hit U.S. Companies Hard By Ian Simpson Reuters NEW YORK (Sept. 2) - A wide range of U.S. companies could be hurt by any economic slide in Latin America, a big market for U.S. exporters, analysts said. They told Reuters vulnerable industries could include banks, auto makers and food companies trading with Latin America. The area has been hit by fears that shocks from Russia's financial crisis could cause economies in Latin America, a fellow emerging market, to tumble. Latin American stock markets have fallen 52 percent this year. Troubles in Latin America would press U.S. companies already battered by worries about Russia and from lower earnings brought on by the sputtering Asia economies. After-tax profits rose at a 1.1 annual rate in the second quarter, the Commerce Department said last week. But year-over-year, profits fell for the first time since 1989. ''I don't think people realize how significant Latin America is to the U.S. economy and corporate profits,'' said Eduardo Cabrera, Latin American strategist at Merrill Lynch. ''We're the little brother to the U.S. and the little brother is getting beaten up. And it looks like its going to spread to the big brother,'' he said. Latin America took about 18 percent, or $114 billion, of U.S. exports last year, according to the Commerce Department. Mexico alone received 11 percent, making it the second-biggest buyer of U.S. goods and services. Warning signs flashed last week when Merrill Lynch cut its rating for Coca-Cola Co. and Prudential downgraded Latin American bottler Panamerican Beverages Inc. Analysts put troubled Latin American economies, including a possible devaluation of Venezuela's currency, among reasons for the downgrade. The economic turmoil has boosted risk premiums on Latin American debt, making it tougher for regional governments to finance deficits. They then would have to cut spending, trimming economic growth even further. Analysts said Latin American downturn would prompt investors to pull more money out of regional stock markets and cut into U.S. companies' earnings. Brian Gendreau, an emerging market strategist at Salomon Smith Barney Asset Allocation, said a Latin American downturn would prompt investors to pull more money out of regional stock markets and cut into U.S. companies' earnings. U.S. companies ''will be doing less business there,'' he said. ''You'd probably get an effect across the board.'' Merrill Lynch listed numerous U.S. companies that do a lot of business in the region. The figures are from November 1997 reports and the brokerage said the data were still valid. Among companies with top exposure, listed by sector: -- Cosmetics and household goods: Avon Products and Colgate-Palmolive Co . Avon gets a third and Colgate 24 percent of its sales in Latin America. -- Airlines: AMR Corp. gets 15 percent of its revenue from Latin America. -- Auto makers: General Motors Corp. and Ford Motor Co. have major investments in Brazil. Merrill put Latin America's impact on 1997 earnings a share at just under 9 percent for both companies. -- Computers: EMC Corp.'s operating margin in the region is 22 percent and Stratus Computer Inc.'s is 12 percent. An EMC spokesman said EMC's exposure was minimal since it received less than 1 percent of its total revenue from Latin America Merrill Lynch analyst Steve Milunovich said Xerox Corp. got about 10 percent of its revenues from Brazil and Unisys Corp. had 11 percent of revenues from Latin America, slightly more than other industry leaders. -- Food and agribusiness: Latin America accounts for 36 percent of profits for International Multifoods Corp. . CPC International Inc. had 23 percent of profits from the region. Among banks, BankBoston Corp. has the greatest exposure to Latin America, with 24 percent of its assets in the region, according to Sanford C. Bernstein & Co. Inc. Bankers Trust Corp. and Citicorp have about 12 percent of assets in the area. According to the Commerce Department, top exports to six of the biggest countries in the first half of 1998 were electrical machinery, motor vehicles, office machinery and computers and telecommunications equipment. Those sectors made up 38 percent of exports to the six nations -- Peru, Brazil, Argentina, Chile, Venezuela and Mexico. Department figures show U.S. companies' direct investment in Latin America totaled $172.5 billion, or about 21 percent of overseas investment, at the end of 1997.