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

To: Steve Fancy who wrote (8751)	10/2/1998 1:17:00 PM
From: md1derful	Respond to of 22640

SF: Man, significant rally in tbr today..almost completely reversing yesterdays losses...not sure if this is in fact bull trap, but it sure looks great technically!!! imho. Was yesterday the last truely great buying day for tbr??? Beginning to look that way!!

To: Steve Fancy who wrote (8751)	10/2/1998 1:57:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

Standard & Poors sees Brazilian recession in '99 Reuters, Friday, October 02, 1998 at 13:46 NEW YORK, Oct 2 (Reuters) - International rating agency Standard & Poor's predicted on Friday that Brazil would head into severe recession next year, but that the direct effects on neighboring countries should be limited. The credit-rating agency, in a conference call with investors, said it expected Brazil to announce a financial reform package some time this month, following a presidential election set for Sunday. Standard & Poor's analyst Lacey Gallagher said four years of delays on key fiscal reforms had left Brazil's public finances critically exposed. She said the crisis will come no matter what policies Brazil pursues to defend its currency from devaluation. "Brazil is going to have a severe recession next year; it's unavoidable," Gallagher said. "The direct effects are fairly limited because Brazil is a fairly closed economy, and so the imports that it buys from other countries are relatively small." Brazil is laboring under a budget deficit of roughly 8.0 percent of gross domestic product. Standard & Poor's gave the nation a negative credit rating earlier this month. Gallagher said the only thing that would improve Brazil's credit worthiness would be long-term structural reforms. Gallagher said she expected to see a combination of short- and medium-term economic measures, with a leading reform being that of social security. "It is the biggest drain on public finances. That is the most important thing that has to be approved by Congress," Gallagher said. The Brazilian Congress only narrowly turned down social security reform measures a few months ago and a revised plan may get legislative approval, she said. Gallagher said the direct effects of a Brazilian recession on Argentina, South America's second-largest economy, would not be severe. She said Brazil buys less than one-third of Argentina's exports, comprising only 3.4 percent of Argentina's gross domestic product. Gallagher said events in the rest of the world could have a far deeper impact on Argentina. Copyright 1998, Reuters News Service