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

To: Steve Fancy who wrote (7520)	9/4/1998 5:04:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Bovespa (INDEX:$BVSP.X) falls 10 pct, trading halted Reuters, Friday, September 04, 1998 at 14:58 SAO PAULO, Sept 4 (Reuters) - Brazil's Bovespa exchange plunged 10 percent at 1528 local/1828 GMT, setting off the circuit-breaker and halting trading for 30 minutes, a spokeswoman at the exchange said. Shares fell on concern that Latin America's biggest economy could see another surge in capital flight drive more investors out of the market, traders said. Sao Paulo's key Bovespa index bounced back slightly before the exchange was able to halt trading. Operations were suspended at 5,618 points, down 9.65 percent. Trading will resume at 1558 local/1858 gmt. Some $3.81 billion fled Brazil's foreign exchange market in the first three days of September, unnerving investors already worried about flight from emerging markets. A decline in U.S. equities coming after Moody's Investor Service downgraded Brazil's debt on Thursday fueled declines, traders said. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:06:00 PM
From: Steve Fancy	Respond to of 22640

Markets not distinguishing among economies -- IMF Reuters, Friday, September 04, 1998 at 15:17 WASHINGTON, Sept 4 (Reuters) - International Monetary Fund Managing Director Michel Camdessus said on Friday markets were not distinguishing clearly enough between healthy emerging economies and those that are "less convincing." Camdessus, speaking at a news conference, praised the reactions in general of Latin American governments to recent global financial turmoil but said markets were not differentiating between strong and weak economies. Latin American economies were generally on the right course, said Camdessus after two days of talks with top Latin American finance officials. "They are on the right track, and that by continuing together implementing these kinds of strategies, they have the proper responses to the situation, even if, at times, and particularly now, one has the impression that the markets don't differentiate properly amongst the good players and those that are a little bit less convincing in their reactions," he said. He added that none of the finance ministers or Central Bank chiefs at the meeting came looking for special funds from the IMF to face economic trouble. "Nobody was coming here to ask for money," Camdessus said. fax +1 202 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:08:00 PM
From: Steve Fancy	Respond to of 22640

Moody's cuts three Brazilian banks, may cut others Reuters, Friday, September 04, 1998 at 15:25 (Press release provided by Moody's Investors Service) NEW YORK, Sept 4 - Moody's Investors Service announced today that it lowered the financial strength ratings of three Brazilian banks and placed the financial strength rating of six other banks on review for possible downgrade. Moody's noted that the downgrades of BFSR's of Banco Bradesco, Banco Itau and Unibanco, which it views as the strongest banks in the Brazilian financial system, are related to the rating agency's view that their financial strength ratings may be incompatible with the environment in which these banks operate. The review will focus on the banks' profitability and asset quality. The rating agency stated that the increased international volatility of global capital markets -- the depth and duration of which is uncertain -- and the declining availability of international liquidity has heightened Brazil's overall risk as well as that of its financial system. The Brazilian banking system has emerged out of the first half of the year with already fragile profitability and increasing delinquency levels in loan portfolios. The second half of 1998 is likely to be even more difficult, given the continuing asset quality pressures and reduced overall volume of business, which may cause further margin compression. The present international turmoil and its effects on emerging markets are likely to expose the banks to further tightening in liquidity. Therefore, scarcer and more expensive foreign-currency funding will add pressure to the banking system, particularly to the wholesale banks, which are dependent on the international capital markets. The market volatility may also produce substantial trading and positioning losses, particularly to investment banks and those carrying international sovereign securities in their portfolio. On the domestic environment, Moody's is concerned with potential interest rate- mismatching and its negative effect on banks' financial fundamentals. The following ratings were affected by the downgrade: Banco Bradesco S.A. : C bank financial strength rating (from C+) - outlook stable Banco Itau S.A.: C bank financial strength rating (from C+) - outlook stable Unibanco S.A.: C bank financial strength rating (from C+) - outlook stable The following ratings were placed on review for possible downgrade: Banco Bozano, Simonsen S.A.: D+ bank financial strength rating Banco Pactual S.A. : D+ bank financial strength rating Banco Icatu S.A. : D+ bank financial strength rating Banco Barclays e Galicia S.A. : D+ bank financial strength rating Banco Cidade S.A. : D+ bank financial strength rating Banco Votorantim S.A. : D+ bank financial strength rating Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:10:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs resume trade with index down 9.98 pct Reuters, Friday, September 04, 1998 at 15:34 SAO PAULO, Sept 4 (Reuters) - The Sao Paulo stock exchange said it resumed trade in Brazilian stocks at 1558 local time/1458 EDT/1858 GMT Friday after an earlier 10 percent plunge in the Bovespa index (INDEX:$BVSP.X) set off the market's circuit breaker. The Bovespa restarted at 5,598 points, or 9.98 percent below than Thursday's close. The exchange will trigger the circuit breaker again if the index posts a 15 percent plunge in the 30 minutes of trade left. The bourse closes at 1700 local time/1400 EDT/1800 GMT.

To: Steve Fancy who wrote (7520)	9/4/1998 5:11:00 PM
From: Steve Fancy	Respond to of 22640

Latam downgrades reflect global turmoil-Camdessus Reuters, Friday, September 04, 1998 at 15:42 WASHINGTON, Sept 4 (Reuters) - International Monetary Fund Managing Director Michel Camdessus said on Friday reflected the turmoil in global financial markets rather than the specific problems faced by Latin American economies. "The reason they advance for...downgrading them was only the fact they are facing difficulties because of developments on the other side of the world," Camdessus told a news conference after a meeting in Washington of Latin Americanfinance ministers. "The medium to long term outlook for the countries of Latin America, to our common judgment here, remains strong," he added. "I believe that as the governments continue their effort for adjustment, for structural change, for better government, for equitable social systems, these countries will certainly see their situation improve and the situation in the financial markets improve. I'm certain that the recent decisions with respect to credit ratings to these countries will be promptly reversed," he said. washington.economic.newsroom@reuters.com)) WASHINGTON, Sept 4 (Reuters) - International Monetary Fund Managing Director Michel Camdessus said on Friday downgrades by rating agency Moody's for Latin American countries reflected the turmoil in global financial markets rather than specific problems faced those economies. "The reason they advance for...downgrading them was only the fact they are facing difficulties because of developments on the other side of the world," Camdessus told a news conference after a meeting in Washington of Latin American finance ministers. "The medium to long term outlook for the countries of Latin America, to our common judgment here, remains strong," he added. "I believe that as the governments continue their effort for adjustment, for structural change, for better government, for equitable social systems, these countries will certainly see their situation improve and the situation in the financial markets improve. I'm certain that the recent decisions with respect to credit ratings to these countries will be promptly reversed," he said. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:12:00 PM
From: Steve Fancy	Respond to of 22640

Emerging mkts may have to tighten policies -IMF Reuters, Friday, September 04, 1998 at 15:42 WASHINGTON, Sept 4 (Reuters) - International Monetary Fund Managing Director Michel Camdessus said Latin American emerging market nations may have to tighten their fiscal policies further if current global financial problems persist. Camdessus said the tighter policies may have adverse effects on growth in various countries. Referring to financial turmoil spreading from one emerging market to another, as in the case of Asia and Russia, he said that "this kind of flight-to-quality phenomenon, this kind of contagion, this is indeed clearly exerting an excessive ... pressure on a large number of countries." "It's true that if these conditions persist, several emerging market countries will need to further tighten their policies to live within the new reality of much tighter terms and conditions for external financing," Camdessus told a news conference after a two-day meeting with top Latin American finance officials. "And indeed, if this persists, the cutbacks will have adverse and very unfortunate implications for growth," he added. Camdessus said Latin America's economic planners should look at more medium-term policies, rather than short-term fixes. "These are difficult times. We shouldn't react to these times only in a very short-termist perspective. And the purpose of the meeting we had today was precisely to see how to maintain and strengthen the medium-term course of policies," he said. Officials from Argentina, Brazil, Chile, Ecuador, Peru, Mexico, Uruguay and Venezuela were at the meeting, along with IMF and Inter American Development Bank officials. U.S. Treasury Secretary Robert Rubin and Canadian Finance Minister Paul Martin attended the talks on Thursday. fax +1 202 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:14:00 PM
From: Steve Fancy	Respond to of 22640

Latam will not retreat from open markets-IMF Reuters, Friday, September 04, 1998 at 15:49 WASHINGTON, Sept 4 (Reuters) - International Monetary Fund Managing Director Michel Camdessus said on Friday Latin American nations were committed to open markets and would not retreat to curbs on trade in response to the current financial turmoil. "I didn't hear a single word for recommending any relaxation of the effort toward more openness, toward more liberalization of trade...No indication at all of temptations of protectionism," Camdessus told a news conference at the end of an IMF-sponsored meeting of Latin American financial policy makers in Washington. Financial markets in Latin America have been rattled by global economic turmoil and fears that a devaluation of the Colombian peso could spark a currency crisis throughout the region. The turmoil has heightened concern that developing nations might be tempted to close off their markets to defend against speculation. Earlier this week, Malaysia fixed its exchange rate against the U.S. dollar after imposing capital controls in a giant step away from free market policies. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:17:00 PM
From: Steve Fancy	Respond to of 22640

IMF welcomes Colombia economic package-Camdessus Reuters, Friday, September 04, 1998 at 15:58 WASHINGTON, Sept 4 (Reuters) - International Monetary Fund Managing Director Michel Camdessus said on Friday that the IMF enthusiastically welcomed measures taken by Colombia to strengthen its economy and had not criticized the government's devaluation of the Colombian peso earlier this week. "The IMF has not criticized the measures adopted by the Colombian authorities to make adjustments on the fluctuation band of the exchange rate," Camdessus said at the end of an IMF-sponsored meeting of Latin American financial policy makers in Washington. "We welcome enthusiastically the package of measures that have been introduced to strengthen the economic performance of Colombia," Camdessus added. The central bank effectively devalued the peso Wednesday by raising its exchange rate band by nine percentage points. The Colombian peso eked out a gain against the dollar Friday after the central bank said it would limit the amount of liquidity it injects into the local banking system through its overnight repurchase mechanism. The peso ended up 22.80 pesos on the day at 1,510. It was the first gain in eight consecutive trading sessions. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:18:00 PM
From: Steve Fancy	Respond to of 22640

Mexico's Gurria sees peso recovering from turmoil Reuters, Friday, September 04, 1998 at 16:45 WASHINGTON, Sept 4 (Reuters) - Mexican Finance Minister Jose Angel Gurria said on Friday the peso, which closed at a new record low for the second successive day, will likely recover after turmoil in global financial markets subsides. Gurria, speaking after a two-day meeting of Latin American finance officials at the IMF in Washington, also said the International Monetary Fund, together with the World Bank and the Inter-American Development Bank, had given the officials assurances of support, if required, for their economies. "We are right now in a particularly acute phase of volatility in the market and my expectation would be that the peso would recover its economically appropriate level after the pressure subsides," Gurria said. "The IMF, World Bank and (Inter-American Development Bank) have all given assurances to the Latin American countries that for those economies, those countries that are applying the right policies, that there will be enough support in order to strengthen those policies, were those countries to suffer undue stress or pressures because of the international volatility." The benchmark 48-hour peso contract shed 10 centavos to end at 10.22/10.24 to the dollar, a new historic closing low. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:19:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Cardoso to meet with Malan Saturday Reuters, Friday, September 04, 1998 at 16:45 BRASILIA, Sept 4 (Reuters) - Brazilian Finance Minister Pedro Malan will meet with President Fernando Henrique Cardoso on Saturday, a presidential spokesman said on Friday. Malan would meet Cardoso immediately after returning from a meeting of Latin American financial chiefs at the International Monetary Fund, the spokesman said. He said no further details of the meeting were available. Brazil, like Latin America as a whole, is in the grip of a crisis in financial markets that was sparked by Russia's devaluation last month. Traders said about $4 billion left the country in the first four days of September and shares were trading down more than 10 percent Friday. Officials have insisted they will not change economic policy despite the crisis. william.schomberg@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:22:00 PM
From: Steve Fancy	Respond to of 22640

Latam seeks shelter from economic domino effect Reuters, Friday, September 04, 1998 at 16:54 By Martin Langfield WASHINGTON, Sept 4 (Reuters) - Latin American finance ministers, rattled by global market turmoil and seeking to avoid a catastrophic domino effect on their economies, met for a second day in Washington on Friday after winning words of support but no cash from the International Monetary Fund. Some of the ministers wanted the United States to ease interest rates to help them through a crisis, which in its latest twist saw Brazilian stock prices and other key regional markets plunge on Thursday and on Friday. Others blamed U.S. credit rating agencies for fomenting panic selling of Latin American assets with critical reports on several regional economies on Thursday and pleaded for more intelligent actions from investors. "The agencies must contemplate that if you are in a crowded room you cannot shout fire, you will deteriorate the situation," Argentine Finance Minister Roque Fernandez said. Moody's Investors Service downgraded or put on review the foreign debt of Mexico, Brazil, Argentina and Venezuela on Thursday while 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. The reports helped drive key markets throughout Latin America, already unnerved by a devaluation of the Colombian peso on Wednesday, into tailspins. The U.S. Treasury Department, usually highly cautious, added to the mayhem on Friday when a letter from a low-level official appeared in a leading newspaper challenging the value of Brazil's currency, the real. In a letter to The Wall Street Journal, the Brazil desk officer of the department said the real was "unarguably overvalued" and that Brazil should look at accelerating its depreciation. A Treasury spokeswoman moved quickly to distance the United States government from those comments, saying: "These are absolutely not the views of the Treasury Department." The letter's author had started working at the Treasury Department just two weeks ago, she added. U.S. Treasury Secretary Robert Rubin had lent his support to the ministers on Thursday, lunching with them and saying developments in the region were "profoundly important" to the United States. Brazil is Latin America's economic powerhouse and a devaluation of the real is seen by many analysts as the likely trigger of a region-wide recession. World Bank President James Wolfensohn rushed back to Washington on Friday from Morocco to add his support to the Latin American ministers. Wolfensohn was attending a development conference in Marrakesh, Morocco, and had been due to give a speech there on Friday but changed his plans, a bank spokesman said. Little beyond words of support has been forthcoming for Latin America from the cash-strapped IMF, which in a communique late on Thursday said it stood "ready to recommend the strengthening and broadening" of its existing support to countries of the region if necessary. The lending agency mostly limited itself though to expressing confidence "that most countries in the region would continue to show positive output growth, and low or declining inflation." Argentina's Fernandez said some of the ministers meeting at the IMF wanted a U.S. interest rate cut but he thought while such a gesture might help, he did not think it was a solution. "I don't think that is the solution to the crisis but it would help maintain liquidity of the market," he said. He added that the officials were not asking for concerted action by the Group of Seven industrial nations, which Latin American ministers expected would hold a meeting of finance ministers in Washington in October during the annual meetings of the World Bank and IMF. "We are not calling for a G7 meeting or a coordinated G7 action, that was not discussed at the meeting," he said. Chile's Finance Minister, Eduardo Aninat, told Reuters Television that both now and at the October meeting, "no one will be asking for funds but perhaps they talk about some 'ease in monetary conditions' (that) could be in place in October, perhaps." He did not elaborate. IMF officials say the lending agency will have just $10 billion available for loans by the end of this year. Its cash reserves have been drained by huge rescue deals for Russia and three Asian states, and the U.S. Congress has so far balked at providing the $18 billion the Clinton administration is seeking to replenish IMF resources. A Latin American diplomat told Reuters though that the IMF, the World Bank and the Inter-American Development Bank had all assured the ministers that they had resources to support their economies if necessary. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (7520)	9/4/1998 5:24:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Central Bank seen selling dollars Reuters, Friday, September 04, 1998 at 16:54 The Central Bank currently sets the dollar-real mini-band floor at 1.1805. Should the exchange rate hit the floor, the Central Bank is obliged to auction dollars in the market. The real closed at 1.1780 to the dollar. In the local currency futures market, the most liquid October dollar contracts were up 0.19 percent, while November contracts were up 0.16 percent, signaling the dollar's value was seen rising in the near future. Meanwhile, worries about further massive dollar outflows were also mirrored in Brazil's stock market, where the key Bovespa index (INDEX:$BVSP.X) plunged more than 12 percent in late trade. noriko.yamaguchi@reuters.com))

To: Steve Fancy who wrote (7520)	9/4/1998 5:26:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

ADR REPORT - Emerging market highlights - Sept. 4 Reuters, Friday, September 04, 1998 at 16:54 BRAZIL ADRS POUNDED AMID WORRIES ABOUT DEVALUATION, REGION NEW YORK, Sept 4 (Reuters) - Brazilian American Depositary Receipts (ADRs) dropped to near 12-month lows Friday, pounded by uncertainty about Brazil and the rest of Latin America. Traders said the outflow of foreign funds from Brazil was helping force down the ADRs. They represent underlying shares that trade on the Sao Paulo exchange. Brazil's blue-chip Bovespa index was down 7.51 percent in late afternoon. The New York Stock Exchange's list of percentage-loss leaders was packed with lLeading ADRs from Brazil and other Latin American countries. "It's getting pretty boring -- every day some bad news and the market down five percent," a trader said. "The Latin Americans feel that they are victims of the international scenario. They feel pretty helpless." The outflow "is leading to a concern about devaluation in Brazil," a second trader said. Foreign exchange dealers estimated $3.8 billion had fled Brazil's commercial and floating foreign exchange markets in the first three days of the month. Moody's Investor Service cut debt ratings for Brazil and Venezuela Thursday. It also put Mexico and Argentina on review for possible downgrades. Investors have feared that Brazil and Venezuela could be the first big Latin American countries to devalue their currencies amid concerns about emerging markets worldwide. Lehman Brothers said in a report about Brazil that "the risk of default remains small, although the potential for further macroeconomic turbulence has grown. "... The critical event for Brazil going forward will probably be what kind of adjustment is proposed after the October (general) elections." Among market gauges, the ING Barings Latin American index of leading regional stocks <.LAT> was down 4.21 points, or 4.16 percent, to just off a record low of 96.98 points. The index is off 55 percent from its high this year. Here are some highlights among emerging market ADRs: * * * BRAZIL - Bellwether Telebras SA (SAO:TELB4) (NYSE:TBR) fell 4-1/8 to 60-3/4 in heavy trade, just off a 12-month low of 60-3/16. Supermarket chain Pao de Acucar (NYSE:CBD) (SAO:PCA) was off 2-7/8, or 23.96 percent, to 9-1/8, just off a record low of 8-3/4. Power company Companhia Paranaense de Energia (SAO:CPL) (NYSE:ELP) was off 13/16, or 16.67 percent, to 4-1/16, a record low. Trade was light. Bank Unibanco Group (SAO:UBB) (NYSE:UBB) fell 1-1/2, or 11.11 percent, to 12, a record low. Volume was more than seven times normal daily levels. Pulp company Aracruz Celulose (SAO:ARC) (NYSE:ARA) fell 9/16, or 10.23 percent, to 4-15/16, just off a record low. Trade was heavy. Brewer and bottler Brahma (NYSE:BRH) (SAO:BRH) was off 7/8, or 9.46 percent, to 8-3/8, a record low. * * * VENEZUELA - Telephone company CANTV (VEN:TDV.D) (NYSE:VNT) was up 13/16 to 11-9/16. * * * CHINA - Leading Chinese ADRs were stronger overall and clustered among percentage-gain leaders on the New York Stock Exchange. The increases came after Hong Kong's China-Affiliated Corporations Index rose 14.95 percent on the back of talk of lower Chinese interest rates and as pressure for a devaluation of the Chinese yuan eased with the weakening of the dollar. Among them, Beijing Yanhua Petrochemical Co. Ltd. (HKSE:0325) (NYSE:BYH) was up 13/16, or 28.26 percent, to 3-11/16, and China Southern Airlines Co. Ltd. (NYSE:ZNH) (HKSE:1055) was up 13/16, or 20.97 percent, to 4-11/16. Copyright 1998, Reuters News Service