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

To: Steve Fancy who wrote (7459)	9/3/1998 8:35:00 PM
From: md1derful	Read Replies (1) \| Respond to of 22640

SF: Great work...ya gotta wonder when this will all end and how much more pain to endure (I love pain, but not this much!!) If any rational examination can be applied to this stock...it seems to me that every bad scenario has already been factored into tbr...one wonders how much more herd-type mentality is left here...what is the next possible bad news-du-jour!! Still keeping the faith..didn't even look at the price at all today!!!! So don't tell!! Good luck

To: Steve Fancy who wrote (7459)	9/3/1998 8:54:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Latam finance chiefs urge calm as markets plunge Reuters, Thursday, September 03, 1998 at 19:56 (Recasts with key Latam markets falling steeply) By Roger Atwood WASHINGTON, Sept 3 (Reuters) - Top Latin American finance officials tried to work out how to defend their economies from world market turmoil on Thursday at a meeting in Washington, while back home key stock markets spiraled downward and currencies plummeted. Rattled by a devaluation of the Colombian peso that could spark a currency crisis throughout the region, the officials from Latin America's nine main economies urged investors not to be stampeded into a blanket sell-off of all emerging markets. U.S. Treasury Secretary Robert Rubin lent his support, lunching with the officials during their two-day meeting at the International Monetary Fund and saying developments in the region were "profoundly important" to the United States. But gloom and despondency hit most of the region's key financial markets, especially after U.S. debt rating agencies Moody's and Standard & Poor's entered the fray. Brazilian stocks tumbled to close off 8.61 percent at a two-year low after Moody's Investors Service downgraded the country's speculative credit rating. Venezuela's main stock index tumbled 7.5 percent on a barrage of bad news, accelerating toward the end of the day when Standard and Poor's said a devaluation of its bolivar currency was likely in coming months. The bolivar nevertheless closed only marginally weaker on Thursday at 583.75 per dollar compared to 583.00 on Wednesday. In Mexico stocks slid lower and the peso plunged to a new record low of 10.14 per dollar in its widely watched 48-hour rate, the first time it has closed below the psychological barrier of 10 per dollar, Mexican Finance Minister Jose Angel Gurria complained that markets were overreacting to world financial problems and failing to discriminate between emerging economies. "Markets are certainly overreacting and not discriminating at all between countries that have done their homework and are taking care of their fiscal positions, taking care to have a flexible, modern and responsive exchange rate regime," Gurria told reporters as he arrived at the IMF. "Everyone is thrown in the same basket, saying they are all emerging markets." Gurria denied that Latin American countries were in Washington to seek IMF funds to ward off financial troubles. "We have not come to ask for money. We have not come here to organize a great fund to support Latin America," he said. "The main purpose of this meeting is to analyze the situation of world markets and the impact it is having on Latin America and to send a clear message to the market that they must differentiate (between economies)," he said. Canada's Finance Minister Paul Martin, who was also attending, said Latin America was committed to economic reform and had taken the right steps so far. Rubin told reporters after lunching with the visiting officials: "We have felt from the very beginning...that what happens in Latin America is profoundly important for the United States...You have a host of nations in Latin America that have been very forward looking in terms of economic policy and reform. They have accomplished a great deal." Finance officials from Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela were attending the meeting. Analysts said Colombia's devaluation of its peso on Wednesday was the first significant change in any Latin American country's exchange rate policy since Asia's financial crisis last year. Colombia's Finance Minister, Juan Camilo Restrepo, has repeatedly cited the "domino effect" of market turmoil in Asia, uncertainty in Venezuela and the Russian meltdown for the peso's vulnerability. While Venezuela, which is Colombia's second largest trade partner, is considered the most vulnerable, investor attention has increasingly focused on Brazil, Latin America's economic powerhouse, whose gross domestic product of $800 billion is nearly twice that of Mexico. Foreign investors pulled money out of Brazil at a frenzied pace in August, causing the the fastest monthly drain in five years and pressuring Brazil's currency, the real. President Fernando Henrique Cardoso, seeking reelection this year, has vowed not to devalue. Economists say a devaluation could plunge the entire region into a recession. Cardoso, speaking in Brasilia on Thursday, said the nation's economic stability depended on the approval of government reform projects already pending in Congress, and that he would not announce a new fiscal package. "Stability depends on the reforms," Cardoso told a news conference. "Brazil has the resources to react to any emergency ... In this moment of turbulence, we have the conditions to advance." Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 8:58:00 PM
From: Steve Fancy	Respond to of 22640

Analysts pin Moody's Argentine move on mkt turmoil Reuters, Thursday, September 03, 1998 at 20:37 By Axel Bugge BUENOS AIRES, Sept 3 (Reuters) - Analysts said Thursday that Moody's decision to put Argentina's debt ratings on review for possible downgrade was due solely to worsening global financial market conditions, not economic fundamentals. They saw the decision largely as a consequence of the credit rating agency's downgrade Thursday of the ratings of neighboring Brazil because of swelling risks of investing in emerging markets. "Essentially, if they see a greater deterioration in Brazil, some deterioration in Argentina is consistent with that view," said Valdimir Werning, an economist at JP Morgan in Buenos Aires. Moody's rates Argentine long-term foreign currency debt Ba3. It cited "increasing turmoil in global capital markets" and uncertainty about how long this will last as the main reason for the review. "The declining availability of international liquidity to emerging markets is heightening the overall risk for high debt countries," Moody's said, while at the same time recognizing the "significant strengthening" of Argentina's financial system since 1995. The agency's last rating action on Argentina was in October last year, when it upgraded it to Ba3 from B1, leaving it three notches shy of investment-grade. The review ahead of the upgrade lasted four months. In April last year, Standard & Poor's upgraded Argentina to BB from BB-minus, placing it on a par with Mexico. S&P has a "stable" outlook on its Argentine ratings. While Werning accepted Moody's logic of carrying out some form of rating action on Argentina after downgrading Brazil and the escalating market turmoil, he and other economists think Moody's rates Argentina too poorly, especially compared with S&P's evaluation of the country. A third of Argentine exports go to Brazil and the two countries are partners in the Mercosur customs union. "While Argentina remains vulnerable to external pressures, Argentina currently lacks policy weaknesses or systemic banking risk which amplified external shocks during the Tequila crisis," following Mexico's botched December 1994 devaluation, Werning said. Others were less kind. Asked what he thought about Moody's move, Christopher Ecclestone, head of research at the Interacciones brokerage answered with one word: "Baloney." "They're trying to flog Argentina for their problems in Asia," Ecclestone said. "I think its a knee-jerk reaction, they are letting themselves be led by the market." Economists expressed some concern that as rating agencies tend to watch each others' moves, not wanting their ratings to come too far out of step with each other, S&P could make an announcement soon as well. But S&P has traditionally had a more favorable view of Argentina's fixed-currency peg than Moody's and given it higher ratings on its own scale. Indeed, statements to Reuters on Thursday by S&P's head Latin American analyst Lacey Gallagher were mostly uplifting on Argentina. She said Argentina was now in a "significantly better" position than two or four years ago to withstand a global crisis. "So far Argentina really hasn't been affected directly in the same way that some other countries have," she said. But Argentina's fixed currency board system makes it relatively more exposed to the financial crisis because growth is dependent on capital flows. "It's possible Argentina could have a recession, but that wouldn't be surprising," Gallagher said. buenosaires.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 8:59:00 PM
From: Steve Fancy	Respond to of 22640

INTERVIEW-Venezuela, Brazil least creditworthy-S&P Reuters, Thursday, September 03, 1998 at 20:40 By Alejandra Labanca BUENOS AIRES, Sept 3 (Reuters) - Latin America's economic giant Brazil and leading oil exporter Venezuela are the least creditworthy in the region and will be hurt the most by current market turmoil, a director at risk-rating agency Standard & Poor's said Thursday. Venezuela's currency, the bolivar, is "extremely" overvalued while the major strike against Brazil is a huge fiscal deficit. "Venezuela has one of the highest inflation rates among the major countries in Latin America," Lacey Gallagher, S&P's director for Latin America, told Reuters in a telephone interview. "As a result, the exchange rate is extremely overvalued and a devaluation in the coming months is likely." Last month, Venezuela let its bolivar fluctuate more freely. This week S&P revised the outlook on Venezuela from stable to negative and affirmed its single B plus long term foreign currency rating and single B short term foreign currency rating. Gallagher said Venezuela's public finances are "very vulnerable" to changes in the price of oil because the state depends on oil income for about half its total revenue. More importantly, the analyst stressed Venezuela's "monetary policy has low credibility because the central bank has not displayed autonomy in situations of stress, and therefore the monetary policy is not particulary effective". She identified Venezuela first and Brazil second as the least creditworthy countries in the region. They are "the ones that have been and will be the most affected" by the international financial crisis, she said. Brazil's "public sector deficit this year will be about seven percent of GDP which is also the largest public sector deficit among all rated countries in Latam and is a source of major stress on Brazil's creditworthiness," she said. But Gallagher said Brazil has still "a track record of policy consistency and (of) defending its exchange rate policy even when than required measures that would have a negative impact on the economy". Late last year, Brazil launched a $20 billion fiscal package to boost the credibility of its battered currency. But "because of the weakness of fiscal policy Brazil remains more vulnerable than other countries like Argentina and Mexico or Peru." Because Argentina has its peso pegged to the dollar at par, "the pace of domestic economic activity is more exposed...to international capital flows.", she said. "It's possible Argentina could have a recession...that wouldn't be surprising." Argentine analysts are predicting that the economy, which grew 6.9 percent in the first quarter and about 5.0 percent in the second, will show even slower growth in the third. Gallagher said Argentina has to cut its budget deficit and continue to deepen structural reforms. Argentine has a "relatively higher debt burden which is why it needs to mantain prudent economic policies in order to mantain access to capital in international markets." She said Colombia's recent devaluation will "have a slightly negative effect on inflation". "Colombia exchange rate policy is not quite an anchor of credibility. The Colombian central bank could in fact devalue without undermining confidence in the long term," she said. Colombia broadened its currency floating band nine percent this week to ease pressure on its peso. Gallagher stressed a fiscal package announced by the Colombian government shortly after its de facto devaluation will "significantly reduce one of Colombia's problems... a significant deficit of the public sector which this year will be 3.3 percent of GDP." "The fiscal package was essential to safeguard Colombia's creditworthiness. We will be watching to see wether there is support in the Congress for this measures," she said. buenosaires.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 9:01:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

IMF offers strong backing for Latam economies Reuters, Thursday, September 03, 1998 at 20:40 WASHINGTON, Sept 3 (Reuters) - The International Monetary Fund (IMF) on Thursday offered strong support for Latin American economic policies but stopped short of pledging immediate cash to help the region through its financial woes. In a statement during a meeting of regional financial officials, the IMF said it was confident that countries in the region would stay on economic track and continue to show positive growth and low or declining inflation. "The Fund is already supporting a number of the countries in the Western Hemisphere region with ongoing arrangements, and Fund management stands ready to recommend the strengthening and broadening of this support, if necessary," the statement said. "It was expected that most countries in the region would continue to show positive output growth, and low or declining inflation," it added. Top Latin American economic officials attending the meeting said in the statement they reaffirmed their commitment to sustained growth through policies including the maintenance of open capital markets and of their current exchange rate policies and regimes. The officials said that if economic pressures were to intensify, they stood ready to adapt their policies, "especially in the monetary and fiscal areas, as needed to preserve overall macroeconomic stability." Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 9:02:00 PM
From: Steve Fancy	Respond to of 22640

Brazil credit rating cut inexplicable, Malan says Reuters, Thursday, September 03, 1998 at 20:47 WASHINGTON, Sept 3 (Reuters) - Brazil's Finance Minister Pedro Malan blasted U.S. credit rating agencies on Friday, calling Moody's Investors Service's downgrade of Brazil's foreign currency debt rating inexplicable. "It is something we can't understand. We have not been invited to comment on their underlying analysis. They have not been at the central bank. They have not been at the finance ministry," Malan told reporters after an IMF-hosted meeting on regional financial turmoil. Other Latin America countries ran into ratings trouble at Moody's on Thursday, including Argentina, Mexico and Venezuela. "This episode linking Argentina, Mexico, Venezuela and Brazil just shows that certain agencies must invest more, much more, in developing a capability to assess sovereign risk," Malan said. "It is one thing is to assess a commercial firm or enterprise. It is much more complex to assess sovereign risk -- as their experience in Asia in recent times clearly indicates," he added. Shares on the Sao Paulo stock exchange tumbled 8.6 percent by close of trade on Thursday after Moody's cut certain debt ratings for Brazil, saying the country was more vulnerable to swings in investor confidence. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 9:06:00 PM
From: Steve Fancy	Respond to of 22640

IMF: Latin America Comunique To Be Released Later Thursday Dow Jones Newswires WASHINGTON -- The International Monetary Fund said Thursday that Latin American policy-makers will issue a communique later Thursday. The communique had been expected to be released after a two-day meeting ends Friday afternoon. But the IMF said in a brief statement that "a communique is expected to be issued this evening, Thursday, Sept. 3, by the group of economic policy-makers of the Western Hemisphere Region."

To: Steve Fancy who wrote (7459)	9/3/1998 9:10:00 PM
From: Steve Fancy	Respond to of 22640

LatAm stocks throttled as contagion fears grow Reuters, Thursday, September 03, 1998 at 20:57 By Richard Jacobsen MEXICO CITY, Sept 3 (Reuters) - Latin American stock markets were throttled on Thursday after investors fled on fears the region will be the next emerging-market domino to fall. Shares from the Rio Grande to Tierra del Fuego sank after Moody's Rating Services heightened anxiety over the strength of the region's economies and currencies in the face of persistent market turmoil. Moody's downgraded foreign-currency debt ratings on Brazil and Venezuela, citing "the growing risk of payments disruptions" in the two countries. And it said Argentina's and Mexico's debt were under review, saying the two were "susceptible to contagion effects" from other emerging markets. The news from Moody's followed a de-facto devaluation by Colombia on Wednesday and weeks of downturn in Latin American markets brought on by economic crises from Asia to Russia. BRAZIL led Thursday's downward charge. Sao Paulo's key Bovespa index (INDEX:$BVSP.X) fell to its lowest level in two years, shedding 586 points, or 8.6 percent, to 6219. "Whoever had any doubt that the situation was terrible doesn't any more," one Brazilian trader said. Brazil's currency, the real, dropped 0.08 percent to 1.1780 per dollar amid net dollar outflows from the country. The regional selloff came despite Latin American finance officials' efforts to sooth investors. "Markets are certainly overreacting," Mexican Finance Minister Jose Angel Gurria said during at a meeting of the International Monetary Fund meeting in Washington. The markets are "not discriminating at all between countries that have done their homework and are taking care of their fiscal positions, taking care to have a flexible, modern and responsive exchange rate regime," Gurria said. MEXICO has such a "flexible" free-floating system for the peso. But the currency sank to an all-time low on Thursday, ending at 10.14 to the dollar. Mexico's leading IPC stock index <.MXX> lost 76 points, 2.4 percent, to 3102 after Wednesday's 6.2 percent rally proved short-lived. "When they gave the downgrade notice on Brazil and Venezuela we started going down, following the Dow," said Pablo Garcia Malo, an analyst with the Valores Finamex brokerage. The Dow fell 1.3 percent, or 100 points, to 7682, in part because of concerns over Latin America. VENEZUELA took a triple blow from Moody's ratings cut, the flop of the privatization of the country's huge money-losing aluminum complex and Colombia's devaluation. Colombia is Venezuela's second largest export market. Adding to the litany of bad news, a Standard & Poor's official said a devaluation of Venezuela's bolivar was likely in coming months. Caracas's IBC index <.IBC> lost 222 points, or 7.5 percent, to 2727. ARGENTINA'S MerVal <.MERV> index lost 23 points, or 5.9 percent, to 367. Argentina's "high debt servicing burden makes it vulnerable to further tightening in international liquidity and makes it susceptible to contagion effects from other emerging markets, in particular Brazil and Hong Kong," Moody's said. Meanwhile, in CHILE, Santiago's IPSA index <.IPSA> dropped 2 points, 3.4 percent, to 62. mexicocity.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 9:12:00 PM
From: Steve Fancy	Respond to of 22640

Mexico's Gurria slams credit rating agencies Reuters, Thursday, September 03, 1998 at 21:03 WASHINGTON, Sept 3 (Reuters) - Mexican Finance Minister Jose Angel Gurria on Thursday slammed credit rating agencies for what he termed ill-timed action on Latin American economies and banks. "The timing of this report is especially unfortunate," Gurria told reporters after an IMF-hosted meeting on regional financial turmoil. Moody's Investors Service downgraded or put on review the foreign debt of Mexico, Brazil, Argentina and Venezuela, just as Latin American policymakers were holding a regional meeting in Washington. Also Thursday, a director at Standard & Poor's said Brazil and Venezuela were the least credit-worthy countries in the region and would be hurt most by current market turmoil. Gurria accused the credit agencies of overreacting, saying they had been caught out by the Asian financial crisis and so were being overly careful about Latin America. "I think one of the big problems that the rating agencies had is a lack of foresight with respect to Asia, so now they don't want to make any mistakes at all and they are making a judgment that doesn't relate to the work that has been done," Gurria said. "Mexico has made a great effort, as have Brazil and Venezuela," he added. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7459)	9/3/1998 9:12:00 PM
From: Steve Fancy	Respond to of 22640

Latam ministers to issue statement later Thursday Reuters, Thursday, September 03, 1998 at 21:03 WASHINGTON, Sept 3 (Reuters) - Economic policy makers from the Western Hemisphere were expected to issue a communique later on Thursday after meeting in Washington, the International Monetary Fund said. The IMF did not say what time the statement would be released and gave no further details. Finance ministers and central bankers from nine Latin American nations, Canada and the United States met at the IMF to discuss the effect on their region of global economic turmoil. The two-day meeting is set to conclude on Friday. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service