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

To: Steve Fancy who wrote (8229)	9/17/1998 1:44:00 PM
From: Steve Fancy	Respond to of 22640

Brazil loses $578 mln through forex markets Wed Reuters, Thursday, September 17, 1998 at 09:16 SAO PAULO, Sept 17 (Reuters) - Brazil's foreign exchange markets lost another $578 million on Wednesday traders said, in a sign that though dollar outflows are slowing, they are not turning around. For the second day in a row, Brazil saw modest dollar outflows, down from a daily average dollar flight of $1.5 billion last week, raising hopes that the drain on reserves will be contained. Still, the consistent deficit in the forex market shows that investors are continuing to yank their money out of the country. Some $358 million left the country through the commercial forex market Wednesday, according to the Central Bank, while another $220 million left through the floating forex market, traders said. So far in September, $14.558 billion has fled Brazil while another $12.001 billion escaped in August, dragging reserves down to $50 billion from as high as $70 billion at the end of July. Dollar flight has sent stocks crumbling and put pressure on the government to devalue the currency. The Central Bank has responded with two interest rate hikes, the latest up to almost 50 percent, which have slowed outflows. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8229)	9/17/1998 1:47:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs dive 10 pct, halting trade for 30 mins Reuters, Thursday, September 17, 1998 at 10:00 SAO PAULO, Sept 17 (Reuters) - Brazil's key share index Bovespa (INDEX:$BVSP.X) plunged more than 10 percent in early trade Thursday, setting off the market's circuit breaker and halting trade for 30 minutes. Investors disappointed by Federal Reserve Board chairman Alan Greenspan's remarks on Wednesday sold across the board, brokers said. The Sao Paulo stock exchange said it halted trade at 1034 local/1334 GMT after the Bovespa fell to 6,071 points. Trade will resume at 1104 local/1404 GMT. Prices engaged in a freefall minutes after the open as Greenspan's speech threw cold water on a market which was starting to recover earlier this week. Local market players were expecting Greenspan to hint a cut in U.S. interest rates. "Greenspan's speech yesterday disappointed the market, which was pressing for an immediate, instant solution (to the global financial crisis)," said one local trader. Sao Paulo's top blue-chip issue Telebras preferred (SAO:TELB4) lost 10.06 percent to 76 reais, while Petrobras preferred (SAO:PETR4) dropped 13.31 percent to 117.03 reais. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8229)	9/17/1998 1:49:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs resume trade with index down 9.83 pct Reuters, Thursday, September 17, 1998 at 10:25 SAO PAULO, Sept 17 (Reuters) - Brazilian shares resumed trading on the Sao Paulo stock exchange at 1104 local time/1004 EDT/1404 GMT after an early 10 percent plunge set off the bourse's circuit breaker, suspending trade for 30 minutes. Market players returned to the floor with the 57-share Bovespa index (INDEX:$BVSP.X) still down by 9.83 percent at 6,095 points, a bourse spokesperson said. Trading will be suspended for another hour if the Bovespa falls by 15 percent against Wednesday's close of 6,760 points. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8229)	9/17/1998 1:50:00 PM
From: Steve Fancy	Respond to of 22640

Rhodes: some Latam countries may get help - report Reuters, Thursday, September 17, 1998 at 10:41 BUENOS AIRES, Sept 17 (Reuters) - A top Citibank (NYSE:CCI) official was quoted Thursday as saying that the international community would help Argentina, Brazil or Mexico to brave the world crisis in case they seek cooperation. Citibank's worldwide vice chairman, William Rhodes, told local newspaper BAE that "so far I haven't received any request for help from (Argentine Economy Minister) Roque Fernandez, (Brazilian Finance Minister Pedro) Malan or (Mexican Finance Minister Jose) Gurria." "But the opinion of the financial community is that those are countries that are doing things properly and that if they request it, will receive backing. Although I do not know in which way." Asked whether that help could come in the form of lower interest rates, Rhodes said that rates have risen "and hence, that would be a proposal more expensive than it was months ago." "But the idea is to give financing to countries that are doing things well. If this is to be done through loans, bond issues or standby-styled agreements, would depend on whether the government (of each country) requests it." buenosaires.newsroom@reuters.com)) For information on Argentine companies see <AR/EQIU>. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8229)	9/17/1998 1:51:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Cenbank seen selling dlrs in mkts Reuters, Thursday, September 17, 1998 at 11:04 Dealers expected Thursday to end with another net dollar outflow again, though no estimates were available at this point in the day. Traders were also nervous after local stock prices plunged from the start on Thursday. The Bovespa blue chip index (INDEX:$BVSP.X) skidded more than 10 percent 34 minutes after the open, setting off the market's circuit breaker and suspending trade for 30 minutes. Trade resumed, with the index still down 8.9 percent. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8229)	9/17/1998 1:52:00 PM
From: Steve Fancy	Respond to of 22640

U.S. watching Latam developments - Shapiro Reuters, Thursday, September 17, 1998 at 11:04 WASHINGTON, Sept 17 (Reuters) - U.S. Undersecretary of Commerce Robert Shapiro said on Thursday that the United States was concerned about economic conditions in some Latin American countries and is watching the situation carefully. "We are very concerned about the threat to economic conditions in some parts of Latin America," Shapiro said at a news conference following the release of the monthly U.S. trade data. "We will watch very carefully the impact of economic problems in Latin America and elsewhere." The financial crisis that has hit Asia and Russia now threatens to spread to Latin America. Shapiro noted that the Asian crisis has led to a slowdown in U.S. exports to the region but added that the United States has benefited from lower prices and lower interest rates. Strength in the durable goods and housing sectors in the United States helped offset a decline in exports, he said. The Commerce Department reported Thursday that the U.S. trade deficit rose to $13.9 billion in July. Shapiro said that at an annual rate, the trade deficit so far this year is $159 billion, compared to $110 billion in 1997. The drop in U.S. exports to Asia so far this year reflect a 46 percent decline in exports to South Korea and a 12 percent drop to Japan. But the drop in exports to South Korea was beginning to level off, and Shapiro said he hoped that was a sign that the South Korean economy was no longer in decline. Shapiro added that future economic conditions in Japan were uncertain. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8229)	9/17/1998 1:56:00 PM
From: Steve Fancy	Respond to of 22640

Portugal Telecom Dn 5.2% Early On Disappointing 1H Pfts Dow Jones Newswires LISBON -- Shares in Portugal Telecom SA (PT) dropped sharply in early trade Thursday as investors were disappointed by the company's first-half earnings report, driving the shares down more than 5%, underperforming the generally weak market. "PT's numbers were below the most pessimistic forecasts and the shares are being punished," a broker in Lisbon said. "There had been some speculation ahead of the report, which set the price up for a fall." At 0912 GMT, PT is down 408 escudos (PTE) ($1=PTE172.52), or 5.2%, to PTE7,450 on volume of 124,090 shares, while the benchmark BVL-30 index was off 99.69 points, or 2.1%, in line with European markets. As reported, PT posted a 23% rise in consolidated net profit to PTE40.8 billion in first-half 1998, up from PTE33.2 billion for the same period the previous year. Analysts had expected profits between PTE40 billion and PTE45 billion, with most looking to the high end of that range. PT also said it would try to protect shareholders from the negative effects of Latin American exposure by "minimizing the impact of our Brazilian investments on results in the short term, in order to generate earnings and pay steadily increasing dividends to our shareholders." PT has invested some PTE500 billion in two telephone companies sold off in the privatization of Telebras SA. Brokers said PT's decline would probably be limited to around 5% in Thursday's trade, because of buyers appearing at that level, but noted the share's direction would also depend on the performance of the overall market. They noted generalized weakness in European equities because of the lack of a clear rate-cut signal from Federal Reserve Chairman Alan Greenspan on Wednesday, and said a weak start on Wall Street could fuel downward momentum here. "This was not the right day to publish poor figures," another Lisbon broker said. PT has suffered on the exchange since fears of Latin American turbulence grew in the wake of the Russian crisis. It has fallen more than 30% from its year highs above PTE11,000 to current levels around PTE7,500 since announcing its venture into Brazil in July. PT, in partnership with Spain's Telefonica SA (TEF), bought two companies in the Telebras (TBR) sale, Telesp Celular and Telesp Fixa. Celular is the cellular service provider for the Sao Paulo region, and Fixa is the fixed line operator in the same area. The company has said it expects the investments to break even in 2000 or 2001, though it acknowleges the heavy burden of financing the investment. At the same time, one of PT's most profitable segments domestically, its cellular unit TMN SA, is facing additional competition with the start of a third cellular operator earlier this month. That has pressured calling rates and stimulated added investment from PT, which said Thursday it invested a total of PTE167 billion in the first half, PTE18 billion on cellular, PTE101 billion internationally and PTE40 billion to domestic fixed line services. TMN contributed some 15% of PT's total revenue of PTE273 billion. -By Erik T. Burns; 351-1-319-1863; eburns@ap.org

To: Steve Fancy who wrote (8229)	9/17/1998 2:00:00 PM
From: Steve Fancy	Respond to of 22640

Portugal Telecom Eyes Forex Hedges For Brazil Investments Dow Jones Newswires LISBON -- Telecommunications company Portugal Telecom SA's (PT) Chief Executive Francisco Murteira Nabo said Thursday the company is "relatively protected" from possible turbulence in Brazil, and is looking at "foreign exchange mechanisms" to hedge its investments there. "As you know, we have to pay 60% in reals (Brazil's currency) and we are financing that with agreements with Brazilian banks, in reals," Murteira Nabo told a news conference. "We are only worried about (turbulence) insofar as it could hurt development of our business." PT must invest some 500 billion escudos (PTE) ($1=PTE172.62) in Brazil, after acquiring two telephone companies in the recent privatization of Telebras SA (TBR). Murteira Nabo stressed PT had bought "a great business" in Brazil, and said he expects to break-even in four or five years, with positive results coming thereafter. He also said the fears of crisis in Brazil are not supported by economic fundamentals, noting the country's strong growth prospects. Meanwhile, he said PT is in negotiations to reduce its stake in Cia. Riograndense Telecomunicacoes, another Brazilian operator, and to sell a 13% stake in Telesp Celular, one of the Telebras spinoffs it acquired. But he acknowledged the "international situation is not favorable for these negotiations," and they haven't yet been concluded. The negative impact of the Brazilian investments on PT's bottom line is expected to knock 6.0% off the company's expected earnings growth rate in 1998 and a similar amount in 1999. Earlier Thursday PT reported first-half earnings up 23% to PTE40.8 billion from PTE33.2 billion in the previous period.

To: Steve Fancy who wrote (8229)	9/17/1998 2:06:00 PM
From: Steve Fancy	Read Replies (11) \| Respond to of 22640

Alcatel Down 40%, Pulling Down Telecom ADRs Dow Jones Newswires By Justin A. Oppelaar NEW YORK (Dow Jones)--A steep dive in Alcatel's (ALA) American depositary receipts has rippled through the entire ADR market on Thursday, with fellow overseas telecommunications concerns taking the most brutal drubbing, market contacts said. The ADRs of Alcatel, a French telecommunications and engineering giant, tumbled to a 52-week low Thursday after it warned that 1998 results won't meet expectations, due mainly to troubles in Asia and Russia and cuts in investment by telecom operators. The resulting ripples affected financial markets around the world and left many ADR-trading telecom concerns wondering what hit them, said Jim Brophy, an ADR research analyst at BT Alex. Brown Inc. The retreat in Alcatel ADRs "spilled over to the entire telecom group," Brophy said. "It was the trigger for a lot of weakness in France that's now moving into the rest of Europe." Among the hardest hit ADR issues was L.M. Ericsson Telephone Co. (ERICY), which, like Alcatel, has exposure to switching markets, the analyst added. Ericsson ADRs recently changed hands at 18 3/8, down 1 9/16, or 7.8%, after trading as low as 18 intraday. The depression in telecom stocks pushed its way into the general ADR population mainly because of the substantial influence of the sector on the overall ADR market, Brophy said. "Telecom is a major part of the volume for ADRs that we track," he explained. Earlier Thursday, Alcatel plunged to 18 9/16, past its previous 52-week low of 21 1/2 set Oct. 28. The ADRs recently traded at 19, down 12 5/16, or 39.3%, on volume of 9.2 million, compared with a daily average of 1.2 million.