Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Steve Fancy who wrote (8723)	10/1/1998 5:03:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

ADR REPORT - Emerging market highlights - Oct 1 Reuters, Thursday, October 01, 1998 at 16:52 ADRS CAUGHT IN MARKET SELL-OFF, FOCUS SHIFTS TO BRAZIL By Daniel Bases NEW YORK, Oct 1 (Reuters) - Investors sold ADRs -- American Depository Receipts -- Thursday, anxious about prospects for a global economic slowdown and the crucial Brazilian presidential election on Sunday, October 4. "There is a lot of indiscriminate distress selling out there," said one harried trader. "This is the great unwind and a lot of hotshot traders are getting wiped out. This is a blood bath." In late trading, the Dow Jones Industrial Average (INDEX:$INDU) was down 245.88, or 3.15 percent, at 7596.74 on the prospects that third quarter earnings will be weak. The Bank of New York index <.BKADR> of 439 leading ADRs was down 3.02 points, or 3.25 percent, to 90.03. Latin America, and Brazil in particular, are now at the front lines of the battle to either stop or slow down the economic debacle that started in Asia and spread westward. Brazilians head to the polls Sunday to begin their presidential election process and analysts say if incumbent Fernando Henrique Cardoso does not win convincingly, a major watershed will have burst. "The focus is clearly on Brazil's election, the success of Cardoso. It will have an effect on the rest of Latin America," said Richard Casey, emerging market strategist at Donalson Lufkin & Jenrette. "People are just trying to preserve capital, they're not analyzing a country's risk. Nobody wants to commit to emerging markets, so they're going to treasuries." The ING Barings index of leading area ADRs <.LAT> was off 7.60 points, or 6.75 percent, at 104.93. Brazil's Bovespa index (INDEX:$BVSP.X) fell 9.6 percent. The leading Brazilian ADR, Telebras (NYSE:TBR) lost 5-15/16 to 63-1/16. International telecoms, as a group, were victims of the big sell-off. "In Brazil, its not only if Cardoso wins, but the margin of victory (in the first round of voting), as well as how quickly he spells out an austerity plan," said another trader who added that the volume of trades picked up from recent lows. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8723)	10/1/1998 5:10:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Industry Min: No Surprises From Fiscal Package Dow Jones Newswires MONTEVIDEO, Uruguay (AP)--Brazilian Industry Ministry Jose Botafogo said Thursday the package of economic and fiscal reforms eventually pushed by his government won't surprise the international community or Brazil. "What we project, in accordance with Congress, is not to take provisional measures but deeper ones, like social reform, in order to face the current international situation," he said in a press conference in the Uruguayan capital. Botafogo traveled to Montevideo for talks on the Southern Cone Common Market, or Mercosur, with his Uruguayan counterpart, Industry Minister Julio Herrera. Aside from Brazil and Uruguay, the customs union is comprised of Argentina and Paraguay. The bloc also has free-trade deals with Chile and Bolivia. Botafogo said he didn't expect Brazil to enter a period of economic recession, although he noted that Gross Domestic Product growth could fall below 4%, depending on the evolution of the global financial and market crises. Regarding Brazilian trade policies, Botafogo rebuffed claims that some measures applied on Brazil's imports were restrictive. "Those measures discipline imports, but they don't distort intra-regional markets, and they aren't discriminatory," he said. Both Botafogo and Herrera said they discussed and analyzed measures against unfair competition. Mercosur members worry that the international crisis "may lead big exporting countries to take anti-dumping measures," Herrera said afterward. Herrera noted while members of Mercosur have discussed joint anti-dumping policies, "no agreement has been reached" on what measures to take. In reference to an intra-Mercosur agreement being negotiated to cover auto exports among member nations as of Jan. 1, 2000, Botafogo said there are "big conceptual differences" between Argentina and Brazil. "Argentina objects to Brazilian incentives to lure foreign investments in the auto sector," Botafogo said. Botafogo travels to Argentina later Thursday.

To: Steve Fancy who wrote (8723)	10/1/1998 5:12:00 PM
From: Steve Fancy	Respond to of 22640

Rubin Q&A: Japan Banks Need Substantial Money Infusion Dow Jones Newswires NEW YORK -- U.S. Treasury Secretary Robert Rubin Thursday reiterated the Clinton administration's ongoing demands for Japan to institute a series of banking sector reforms and fiscal measures to get its struggling economy "back on track." Answering questions after delivering a speech to a Dow Jones/Wall Street Journal conference in New York, Rubin said the Japanese government needed, among other steps, to make a "substantial infusion of money" into its liquidity-sapped financial sector. In the process, however, Tokyo needs to allow weak banks to fail and the financial sector's massive backlog of bad loans need to be written off. He added that Japanese government must take fiscal stimulus measures to reinvigorate its economy. Rubin stressed that these demands were shared by other Group-of-Seven industrialized nations and international institutions like the International Monetary Fund and the Asian Development Bank. "The world is focused on the enormous importance of Japan ... to once again be the engine of growth" for Asia it has been for half a century, Rubin said. Addressing Brazil's economic crisis, he said the lead should be taken by large economies like the U.S. and Japan to boost their economies as an indirect source of support for Latin American countries suffering from global contagion. More specifically, he said there are a "whole host of measures that are being employed or that are being considered" to boost Brazil, and added that the international community is supportive of Brazilian President Fernando Cardoso's efforts to reform his economy. Earlier this week Japan said it would unveil a $30 billion aid package for Asia at this weekend's Group of Seven meeting in Washington. The money, aimed at encouraging Asian companies to restructure debt and helping banks write-off bad loans, is desperately needed because many investors continue to pull capital out of the region. Although Rubin hasn't seen the details of Japan's proposal, "it seems to me like a constructive thing to be doing," he said. But he also stressed that the most important step Japan can take in helping the region out of crisis is to get its economy back on track. Rubin also was asked about the recent bailout of Greenwich, Conn.-based hedge fund Long-Term Capital Management, in which the Federal Reserve Bank of New York - in a rare move - brought together 16 banks to organize a rescue for the troubled fund. The Fed's involvement, was a "single isolated incident in which the judgment was made by the Federal Reserve Bank of New York that there were possible systemic implications of a failure" by LTCM. "I do think there are legitimate questions about the very large body of money known as hedge funds," Rubin added, wondering if there should be regulation of hedge funds with regard to transparency. Rubin called the arrest of Malaysia's former deputy prime minister and finance chief Anwar Ibrahim on corruption and sex charges "terribly, terribly, troubling." Anwar, he noted, "was highly respected by the international financial community." As for the possibility that other countries might follow Malaysia's example of introducing capital controls, Rubin said: "We need to provide an alternative vision that is more attractive" and based on free market principles, Rubin said. Rubin reiterated that over the long-run, capital controls will prove to be ineffective. On the dollar, Rubin stressed that the administration's policy remains unchanged but that it shares Japan's concern over the weak yen. -By Michael Casey, Charlene Lee and Carol S. Remond.