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

To: Steve Fancy who wrote (7546)	9/4/1998 7:54:00 PM
From: RockyBalboa	Respond to of 22640

Brazil to sell telecom licenses in Dec - ANATEL BRASILIA, Sept 4 (Reuters) - Brazil will press ahead with its plans to auction four major telecommunications concessions in December, despite a recent battering of local markets, the National Telecommunications Agency (ANATEL) said Friday. ''Despite the turbulence, (the sale) will be a success, without a doubt,'' said ANATEL board member Mario Leonel Neto. Brazilian shares, battered since Russia's devaluation, closed Friday at their lowest level in more than two years amid fears of a capital flight. Leonel Neto said the sale of the concessions was attracting some of the world's leading communications companies, including firms from the United States, which had a long-term view of business opportunities in Brazil. ''We have already had very positive feedback from international operators and national groups, some of which are already operating and others which are wanting to get into the Brazilian market,'' Neto said. The ''mirror'' concessions will compete with recently privatized units of Telebras (NYSE:TBR - news). Leonel Neto said the auction would take place December 2 on the Rio de Janeiro stock exchange, where the 12 subsidiaries of Telebras were privatized in July for $19 billion. Under the Brazilian government's plan to stimulate competition in the telecommunications sector, each of the three former Telebras fixed-line companies and long-distance carrier Embratel will compete with a mirror firm. The eight cellular units also sold in July already face competition from private B Band operators. Groups interested in the mirror concessions will be required to submit by November 3 sealed-envelope proposals including cash bids and proposals for installing lines. The new line proposals would be given a 70 percent weighting in a formula to settle who wins each concession. The cash offers will account for the remaining 30 percent. Formal rules for the bidding would be published in the government's official gazette September 8. There would be no minimum prices for the concessions but groups bidding would be required the make a deposit to take part in the auction. Under rules for the sale, the auction will go to live voice for groups whose written cash offers come within 10 percent of the highest written bid. ------------------------------------------------------------------ Christian

To: Steve Fancy who wrote (7546)	9/4/1998 8:48:00 PM
From: djane	Respond to of 22640

thestreet.com excerpt on Brazil thestreet.com Latin woes leaping to the fore Going forward, the strategist [Bill Meehan, chief market analyst at Cantor Fitzgerald] said financial woes in Latin America will be the main focus on Wall Street, as Russia has largely been discounted. In the wake of yesterday's downgrade of its debt rating by Moody's Investors Service, Brazil's Bovespa fell a further 10% today, triggering a trading halt. Lately, the index was quoted down a more modest 5.9%. In sympathy, Venezuela's main exchange shed 7.5%. "You can play it both ways," said Michael Scarlatos, international economist at Bankers Trust. "One, Latin America has not melted down as much as other emerging markets and they're in better shape fundamentally than others. Or you can say it hasn't been hit yet, making it the next victim in a long line." A saving grace, Scarlatos said, is that Latin America is somewhat "on the back burner" compared with developments in Russia, where the Duma will vote Monday on Viktor Chernomyrdin's nomination for prime minister; Hong Kong, whose de facto central bank meets tomorrow with representatives from major Western banks; and tonight's meeting of Treasury Secretary Robert Rubin, Fed Chairman Alan Greenspan, and Japanese Finance Minister Kiichi Miyazawa. In addition to the continued fallout in Washington from the Monica Lewinsky scandal. "Without a doubt, Latin America is suffering," Scarlatos said. "But the crises would be worse if not for other crises. The Moody's downgrade would have received more attention had the spotlight been more on." This is good news? The action today did little to assuage the already jangled nerves of many market participants.

To: Steve Fancy who wrote (7546)	9/4/1998 8:51:00 PM
From: djane	Respond to of 22640

Latin Loot: Brazil Weighs Currency Controls thestreet.com By Peter Eavis Senior Writer 9/4/98 4:32 PM ET Brazil could be on the brink of imposing currency controls in a last-ditch attempt to stem the strong outflow of dollars, according to sources in Brazil and the U.S. Marco Maciel, an analyst at Rio de Janeiro-based Banco Bozano Simonsen, believes the government is seriously considering slapping a punitive tax on stock and bond investors who want to take money from these markets out of the country. "This may be the only way to stop the outflows," he says. "I think there's a high probability these will be implemented." Other economists who asked not to be identified also said the government could slap on this tax. Rumors of outflow taxes helped pushed Brazilian stocks down nearly 10% today. A call to get comment from Demosthenes Madureira de Pinho Neto, head of international affairs at the Central Bank of Brazil, was not immediately returned. In crisis conditions like this, Brazil could try to keep money in the country in two ways: by hiking interest rates, or by slapping on administrative measures like taxes or delays on capital exports. Currency controls seem all the more likely after Brazil's policy makers decided to actually cut rates earlier this week. This move was seen to be politically motivated, as a rise could have damaged the image of President Fernando Henrique Cardoso's government ahead of the Oct. 4 national elections. However, the market would react badly to a tax on outflows. "A tax like this would be very bad and undermine investor confidence," says Jose Carlos de Faria, economist at ING Barings in Sao Paulo. A tax would hamper foreigners getting out of stocks and the government's real-denominated bonds. Recent estimates say foreigners hold 10%-15% of the $250 billion domestic bond market. Some $3.8 billion left Brazil between Sept. 1 and Sept. 3, according to Reuters. In August, some $11 billion left the country. Total reserves now stand at an estimated $57 billion. But outflows could be huge as investors react to Moody's downgrade of Brazil's sovereign rating Thursday. Panic-selling today drove the Bovespa, the benchmark index for the Sao Paulo stock exchange, nearly 10% lower to 5617. American depositary receipts of Telebras (TBR:NYSE ADR), Brazil's bellwether telco stock, were off 11.2% at 57 3/4. Some Brazilian external dollar sovereign bonds slumped, while others -- like the closely tracked C-bond -- actually posted solid gains. Many investors and economists believe that Brazil has enough reserves to survive the current turmoil until after the elections. They believe Cardoso will get re-elected and immediately implement a package of budget cuts to shore up confidence. But the reserves could be flowing out too fast. "I'm getting very concerned after seeing the level of outflows," says de Faria. See Also LATIN LOOT Moody's Pushes Latin America Closer to the Edge 9/3/98 5 PM LATIN LOOT Back to 1982? Latin America's Debt Mountain Is Daunting 9/1/98 11 AM LATIN LOOT ARCHIVE

To: Steve Fancy who wrote (7546)	9/4/1998 8:54:00 PM
From: djane	Read Replies (1) \| Respond to of 22640

Cramer comments on TBR thestreet.com Wrong! Dispatches from the Front: Get Off the Phone By James J. Cramer 9/4/98 2:31 PM ET "Sell 10 Telephone [T:NYSE]," I shouted to my trader, Mark Kantor. "Which one?" he yelled back. "Doesn't matter," I said, sadly. Yes, the great telemania/telefriend/telestock period is now behind us and the pickings have never been slimmer. All day I have seen "raids," or massive attempts to get anything telephone down, but particularly the national telephone stocks and those that supply equipment to them. Perhaps the most visible outgrowth of this era is that stocks like Lucent (LU:NYSE) and Tellabs (TLAB:Nasdaq) have become dramatically overowned. I did some work on Tellabs today trying to make a case for it, and all that I came back with was, "This one-time highflyer is now for sale everywhere." Lucent is no different. I have a sign on my desk that says, "I Love Lucent," a tribute to the stock and the TV show. But that era is past, and now I own puts underneath my Lucent to stem the losses. But nothing is working worse than the international telephone companies, particularly Telebras (TBR:NYSE ADR), which has gone from the world's best story to the world's worst story overnight -- without anything happening to it other than an increase in value. When the bear stops growling, I am sure all these stocks will be among the great bargains of a lifetime. But right now, "Sell 10 phone!" Random musings: Oh, so Cambridge Technology (CATP:Nasdaq) says it has a "little slip" in business. Is that a teeny-weeny slip or an itsy-bitsy slip? These companies are masters of spin control, aren't they?? James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. At the time of publication the fund held puts options on AT&T, Lucent and Telebras stock, though positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com at letters@thestreet.com.

To: Steve Fancy who wrote (7546)	9/4/1998 8:56:00 PM
From: djane	Read Replies (6) \| Respond to of 22640

I'm in the mood for a conspiracy theory (see below from Yahoo thread) Message 4006 of 4008 Reply guess who is shorting Brazil chicken_fest Sep 4 1998 7:16PM EDT My information is that CIA and affiliated agencies have been using some of their spare covert billions to destabilize vulnerable economies in South America and elsewhere. By inducing economic hardship they hope to foment unrest and dissent, resulting in new client and target states for their "services", while also causing the world's wealth to become concentrated in their back pockets (the US treasury). Strife in Africa and the Balkans is simply not enough for the vultures who actually control the US government. Those places are too poor to support the kind and scale of new business they've in mind for the now moribund US mil-industrial complex. If only they'd be more patient! Having aided and abetted the oligarch thieves in Russia, surely they will wind up with all the misery and human suffering they could possibly desire. Of course I am kidding. Or am I? Inquiry after the puppet-mastery over at Moody's would be most telling, as is today's inexplicable "Treasury Dept." letter sent to the WSJ.