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

To: md1derful who wrote (7492)	9/4/1998 1:10:00 PM
From: Steve Fancy	Respond to of 22640

World Bank chief rushes to Latam crisis meeting Reuters, Friday, September 04, 1998 at 10:46 WASHINGTON, Sept 4 (Reuters) - Adding his support to Latin American states facing market turmoil, World Bank President James Wolfensohn rushed back to Washington on Friday for meetings with their top financial policy makers. Wolfensohn was attending a development conference in Marrakesh, Morocco, and was due to give a speech there on Friday, but changed his plans. A bank spokesman said he was flying back to attend the final day of meetings on economic conditions in Latin America at the International Monetary Fund's headquarters, next door to the World Bank. Rattled by global economic turmoil and a devaluation of the Colombian peso that analysts fear could spark a currency crisis throughout the region, top officials from nine Latin American nations were meeting under the auspices of the IMF to discuss ways to defend their economies. The meetings, which got underway on Thursday, were to conclude later Friday. Copyright 1998, Reuters News Service

To: md1derful who wrote (7492)	9/4/1998 1:11:00 PM
From: Steve Fancy	Respond to of 22640

Some Latam ministers want U.S. rate cut-Fernandez Reuters, Friday, September 04, 1998 at 11:17 WASHINGTON, Sept 4 (Reuters) - Argentine Finance Minister Roque Fernandez said on Friday that some top Latin American officials meeting at the IMF wanted a U.S. interest rate cut to help ease the region's crisis. But Fernandez told reporters that while such a gesture might help, he did not think it was a solution. The officials were not asking for concerted action by the Group of Seven industrial nations, he added. "We believe that easy monetary policy in the United States and the main industrial countries is not going to be a solution to the crisis but we should maintain liquidity on the markets," Fernandez said. He said some Latin American ministers at the two-day meeting, called by the IMF to review how Latin America can defend its economies from global economic turmoil, had suggested that lower U.S. interest rates would help ease the situation. "I don't think that is the solution to the crisis but it would help maintain liquidity of the market," he said. "A restrictive monetary policy (by industrialized countries) would be a mistake." "We are not calling for a G7 meeting or a coordinated G7 action, that was not discussed at the meeting," he added. Fernandez echoed criticism by other ministers of ratings cuts by Moody's on Thursday, which helped the region's stock markets spiral lower, saying: "The agencies must contemplate that if you are in a crowded room you cannot shout fire, you will deteriorate the situation." 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: md1derful who wrote (7492)	9/4/1998 1:13:00 PM
From: Steve Fancy	Respond to of 22640

U.S. Treasury disavows letter on Brazil currency Reuters, Friday, September 04, 1998 at 11:17 WASHINGTON, Sept 4 (Reuters) - The U.S. Treasury said on Friday it refused to accept responsibility for a letter written by one of its officials to a leading newspaper, which said Brazil's real currency was "unarguably overvalued." "These are absolutely not the views of the Treasury Department. She started here at Treasury two weeks ago and she is not speaking for the Treasury Department," said Treasury spokeswoman Michelle Smith. In a letter to the Wall Street Journal, the Brazil Desk Officer of the Treasury Department said the idea of Brazil adopting a currency board deserved "a second glance" but that a more sustainable solution involved "aggressive fiscal reform." "And while Brazil's real is unarguably overvalued, a destructive devaluation is not the only solution," wrote Britta Hillstrom. She recommended that the Brazilian central bank widen the currency bands for the real to allow a greater depreciation, which would in turn spur economic growth and allow a reduction in interest rates. A currency board was not the solution to Brazil's current problems, she said, because of a "global credit crunch." "Rather than tying its hands through a rigid exchange rate regime, Brazil should simply hasten the rate at which the real depreciates, while concentrating on strong and transparent fiscal reform," Hillstrom added in her letter. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: md1derful who wrote (7492)	9/4/1998 1:16:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs slump further on dlr outflow concerns Reuters, Friday, September 04, 1998 at 12:32 SAO PAULO, Sept 4 (Reuters) - Brazilian stocks extended their losses in midday trade Friday as investors dumped shares, concerned by the large amount of capital fleeing the country amid the global financial fracas, brokers said. The 57-share blue-chip Bovespa index (INDEX:$BVSP.X) plunged 5.5 percent to 5,877 points by 1230 local time/1130 EDT/1530 GMT. Forex dealers estimated a net $3.8 billion had fled Brazil's commercial and floating foreign exchange markets in the first three days of September. This compared with a net $12 billion outflow for the entire month of August. "So long as the bleeding of dollars continues, it will be difficult for the local stock market to sustain any price gains," said one local trader. The Bovespa had opened higher on Friday as investors fished for cheap blue chips following Thursday's steep 8.6 percent plunge. But the buying spree quickly died on more concerns about the country's risk outlook. Moody's Investors Service on Thursday downgraded Brazil's foreign currency bonds to B2 from B1, sending stocks into a dizzying tailspin. Although investors were confident enough to pick up some cheap stocks early Friday, most opted to stay away, especially ahead of Monday's national holiday. Brazil celebrates its Independence Day on Monday. In the currency market, the real was even at 1.1780 to the dollar at midday. Brazil's dollar-denominated C bonds were up 0.875 point at 55.75. noriko.yamaguchi@reuters.com)) Copyright 1998, Reuters News Service

To: md1derful who wrote (7492)	9/4/1998 1:17:00 PM
From: Steve Fancy	Respond to of 22640

Brazil forex mkt lost $3.8 bln Sept 1-3 Reuters, Friday, September 04, 1998 at 12:51 The strong outflow in August failed to put a big dent in foreign currency reserves because it was offset by large dollar inflows following a series of privatizations and acquisitions by foreign companies. Brazil registered a net outflow of $688.975 million from the commercial foreign exchange market on Thursday and dealers said another $635 million left the floating forex market. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: md1derful who wrote (7492)	9/4/1998 1:18:00 PM
From: Steve Fancy	Respond to of 22640

Moody's official says Latam faces liquidity crunch Reuters, Friday, September 04, 1998 at 13:01 By Apu Sikri NEW YORK, Sept 4 (Reuters) - A rapid decline in investor confidence in emerging market countries prompted Moody's Investors Service Inc. to cut its ratings of two Latin American countries, a senior Moody's official said on Friday. "The overall liquidity situation may in fact be difficult for a longer period of time and, as a result, the stresses on the system this time around may be different than they were in 1995," said Vincent Truglia, managing director and co-head of the sovereign risk unit at Moody's. "As a result, countries with large financing needs may be facing a more risky environment." Moody's on Wednesday cut ratings for Brazil and Venezuela and put Mexico and Argentina on review for possible downgrades. Moody's action sparked criticism from Latin American finance ministers who said the agency was being overly alarmist about the situation. But Truglia said the crisis sparked in emerging markets this time could be more severe than that faced by these countries in 1995, when a devaluation of the peso sparked large scale selling of the bonds of many of these countries. "In 1995, you had a drying up of liquidity because of fears centered around Mexico," said Truglia. "The Mexico problem was solved very quickly. So you had a lender of last resort -- the United States and the (International Monetary Fund). A large amount of money was provided. Investors lost only (short term) mark-to-market and very quickly things returned back to normal. Therefore, funds flowed after a slight interruption," he said. "This time around we've had an actual default," said Truglia, referring to the debt restructuring announced last month by Russia on domestic Treasury bills. Investors are coming to the view that the likelihood of default for other countries cannot be ruled out, the Moody's official pointed out. "The argument was made that once you have marketable securities, there will be no default; we can't afford a default and many investors believed that and there was a huge rescue program put in place in the case of Russia," said Truglia. "What happened? It defaulted. So lots of people have lost lots of money. That has caused problems," he said, adding that investors have begun to liquidate holdings in many parts of the developing world, including Latin America. Moody's believes better domestic policies in Mexico and Argentina make them less dependent on external financing than Brazil and Venezuela, Truglia said. Asked about the lower rating on Brazil's domestic debt compared to its foreign debt, Truglia said that because of the short-maturity and high interest rate on domestic debt, the risk of default on the domestic debt is higher. "We are telling you that risk of default on a Eurobond or Yankee bond is less than risk of default on a local domestic security denominated in a local currency" in Brazil, said Truglia. "Part of the source of Brazil's problem comes from the fiscal side," he said. With a large fiscal deficit, "it is harder and harder to roll over (short-term) debt," he said. "We pointed that out in the case of Russia, and we were right," he said. About 50 percent of Brazil's domestic debt is in short-term floating-rate debt, according to analysts. Brazil's finance ministry on Friday called the Moody's downgrade "a mistake, certainly the fruit of disinformation." The ministry noted that Moody's pointed to Brazil's "twin deficits." The ministry complained that Moody's did not take into account the improvement in the nation's current account results or the structural progress Brazil has made in its fiscal policies. A Moody's spokeswoman explained that the agency was worried about long-term prospects for emerging markets. "Our actions in Latin America take the long-term perspective so we are not chastened by comments based on short-term observations. It's sometimes easy for the markets to forget what ratings are and are not," the spokeswoman said. Moody's trimmed the country ceiling for foreign currency debt of Brazil to B2 from B1 and lowered its domestic government bond debt to Caa1 from B2. The agency also chopped the rating on Venezuela's foreign currency debt to B2 from B1. It is reviewing Mexico's current rating of Ba2 and Argentina's rating of Ba3. Copyright 1998, Reuters News Service

To: md1derful who wrote (7492)	9/4/1998 1:24:00 PM
From: EPS	Read Replies (1) \| Respond to of 22640

Well what a pisser...!!!Guess traders are not going to be willing to keep this stuff over the long weekend.. Victor

To: md1derful who wrote (7492)	9/4/1998 1:25:00 PM
From: Steve Fancy	Respond to of 22640

Latin Amer, IMF Start 2nd Day Of Talks;Focus On World Bk-IDB Dow Jones Newswires WASHINGTON -- Latin American finance ministers and central bankers began a second day of talks Friday at the International Monetary Fund, a session expected to focus on links with other multilateral lenders. "Today we're mostly going to be listening to the IDB (Inter-american Development Bank) and World Bank," Mexican Finance Minister Jose Angel Gurria said as he entered the IMF. "We came here to think aloud." He stressed that no funding packaging will be discussed. "We are going to discuss what the countries, together with the multilateral organizations, can do to face the (current) financial instability," said Ecuadorean Finance Minister Fidel Jaramillo. A joint press conference with IMF Managing Director Michel Camdessus, World Bank President James Wolfensohn, and IDB head Enrique Iglesias is scheduled for 2:30 p.m. EDT (1830 GMT).

To: md1derful who wrote (7492)	9/4/1998 1:26:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Anatel Postpones Telecom Cos Bid Rules To Sep 8 Dow Jones Newswires BRASILIA -- Brazil's National Telecommunications Agency, known as Anatel, said Friday it has postponed to Sept. 8 publication of tenders for competing telecommunications companies' concessions. The publication of the bidding rules was originally scheduled for Sept. 3, but was then postponed to Friday before being postponed a second time. Anatel said the delay is related to some last-minute changes in competition rules which will be included in the sale prospectus. The concessions, known as "mirrors", will compete with each of the three fixed-line units and the long-distance and international carrier which were privatized during the sale of Telecomunicacoes Brasileiras SA, known as Telebras, on July 29. -By William Vanvolsem; (5561) 244 3095; wvanvolsem@ap.org

To: md1derful who wrote (7492)	9/4/1998 1:27:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil's Bovespa Aug Avg Daily Volume -14% From July Dow Jones Newswires SAO PAULO -- Total trading volume on Brazil's Sao Paulo Stock Exchange, known as the Bovespa, was $11.3 billion in August for a daily average of $537 million, or 14% less than the July average, the exchange said Friday. The total traded on the Bovespa in August was 26% lower than in August 1997, according to a written statement. The Bovespa didn't provide comparative figures for the previous month or for the same month of last year. In August, the Bovespa accounted for 91% of total share trading in Brazil Cash trading accounted for 93% of the Bovespa volume, followed by options trading with 6.2%. The Bovespa Index dropped 39.5% in August after rising 10.6% in July.

To: md1derful who wrote (7492)	9/4/1998 1:33:00 PM
From: Steve Fancy	Respond to of 22640

Emerging Mkts ADRs: Latin America Down; China, HK, Higher Dow Jones Newswires NEW YORK -- Emerging market shares trading as American depositary receipts were on diverging course Friday morning, as Latin American issues tracked U.S. stocks downward and Asian equities rose in line with their local markets, dealers said. Latin American issues weakened in tandem with the Dow Jones Industrial Average, which opened higher but promptly took a turn downward. At 1610 the DJIA was down 27.04 points to 7655.18 points. "As usual, nothing has changed," a trader said. "Sentiment remains very negative, we have a long weekend ahead, there's fear of something happening in Venezuela and the U.S. remains very weak." Brazilian ADRs are underperforming the region, as bellwether Telebras continues to hit new lows, down 5.7% to $61 3/16 at 1625 GMT. "There's more pressure because of (Moody's Investors Service) downgrade. They placed it at the same level as Venezuela," a trader said. Moody's lowered Brazil and Venezuela's debt ratings Thursday, and placed Mexico and Argentina under review for a possible downgrade. Retailer Pao de Acucar posted a staggering 22% loss, trading at $9 5/16. Mexican ADRs are mixed, with Telmex 5/16 lower at $36 3/4. Steel pipe-maker Tamsa was rebounding handsomely up 12% to $5 3/8, on the back of stronger oil prices, traders said. Argentine banks, also downgraded by Moody's, were also falling. Banco de Galicia was down 6.6% to $10 5/8, while Banco Frances lost 5.5% to $10 1/8. Among Asian ADRs, China Telecom jumped 8.4%, helped by a stronger yen which eased fears of devaluation of the Chinese currency. Hong Kong Telecom also rose 6% to $18 5/8. -By Margarita Palatnik; 201-938-2226; margarita.palatnik@cor.dowjones.com

To: md1derful who wrote (7492)	9/4/1998 1:37:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Aug Vehicle Sales Up 51% From July At 133,900 Units Dow Jones Newswires SAO PAULO -- Brazilian vehicle sales rose in August to stage its best monthly performance so far in 1998, the industry's association said Friday. Total sales of domestically produced cars, trucks and buses for August totaled 133,900 units, up 51% from 88,400 units in July, the National Association of Automobile Manufacturers (Anfavea) said. The August sales figure was, however, 12% lower than in August 1997, when 151,800 units were sold. In the first eight months of 1998, vehicle sales totaled 869,900 units, down 25% from 1.14 million units the same period last year, Anfavea said. Increased sales meant a rise in production in August, according to Anfavea figures. Total production of vehicles increased 4.6% in August from July to 144,400 units. On a monthly basis, however, output is down 25% from 192,400 units produced in August 1997. Production in the first eight months totaled 1.16 million units for a 17% drop from the 1.4 million manufactured in the same period of last year. The automotive industry had hoped to equal in 1998 the 2-million-unit output of 1997. But domestic demand remains surpressed by higher interest and tax rates on car purchases adopted at the height of the Asian crisis. Sales of imported vehicles rose to 31,500 in August from 26,000 units in July, an increase of 21%. Imported vehicles' sales in the last eight months were at 229,600 units, up 15% from last year's January to August sales of 200,000. On the other hand, exports of Brazil's vehicles dropped a sharp 9.15% to 31,000 units in August from July's 34,200. Jose Carlos da Silveira Pinheiro Neto, Anfavea's president, said the industry is concerned that the current global financial turmoil is affecting the imports of Brazilian in traditional markets in Latin America. He mentioned the threat of currency devaluation in neighboring countries while the Brazilian Real is tied to the dollar. Pinheiro Neto said he had "no idea" of how the vehicles market would behave in September given that August was such an unpredictable month. On a cummulative basis, exports in the first eight months of 1998 rose 11.25% to a total of 276,400 units from 248,400 units in the same period of 1997. One-liter engine compact cars sales were up to 85,800 units in August from 50,000 in July. Compact cars also made up 76% of the vehicle sales market in August, compared to 72% of total sales in July. Alcohol fueled car sales jumped to 167 units in August from 45 units in July. Volkswagen do Brasil and Fiat SPA recently resumed their production of alcohol fueled vehicles, following a series of government measures aimed at promoting these cars.