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

To: Steve Fancy who wrote (8799)	10/4/1998 6:33:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

WEEKAHEAD-LatAm mkts set to rally on Cardoso win Reuters, Sunday, October 04, 1998 at 18:07 By Carlos A. DeJuana BUENOS AIRES, Oct 4 (Reuters) - Latin American stock markets were expected to be on the watch for concrete measures to strengthen the region's economies this week with a number of key events and meetings taking place. First and foremost, said analysts, was the expected re-election victory of Brazilian President Fernando Henrique Cardoso, which was seen triggering a pan-Latin American rally on Monday. "The second possibility is that the elections go into a second round of voting and markets plummet," the trader with Brazil's BancoCidade said, echoing regional sentiment. A first-blush exit poll Sunday afternoon gave Cardoso an unequivocal victory over his nearest rival Luiz Inacio Lula da Silva -- 56 percent of votes to Lula's 29 percent. The later announcement of several key governorship races or any lag in hammering out a package to tuck and trim the country's bulging budget deficit could also make any initial rally short-lived. "The next move is in Brasilia's court," said Latin American strategist James Barrineau at Salomon Smith Barney. "We do not believe the market will be very patient in awaiting an announcement of major fiscal cuts, and if the administration believes it has to wait for a second round of voting, outflows would be likely to increase, forcing the market lower and the government's hand sooner." Latin America was also expected to keep a close eye on any developments out of the Group of Seven industrialized nations' meeting this weekend and an International Monetary Fund meeting on Tuesday. On Sunday afternoon, Brazil Finance Minister Pedro Malan reported progress in the talks on a proposed contingency fund, but gave no details. "The market is expecting these meetings to announce some sort of large package," Argentine trader Maximiliano Ruprecht at Raymond James Argentina said. Nevertheless, market watchers said bourses would remain volatile as the prospect of a world recession, lingering problems in Japan, continuing instability in Russia and the knowledge that there are always new problems around the corner, loomed ahead. ARGENTINE traders said shares were expected to remain completely glued to outside developments and keep close tabs on market movements in Brazil and New York. The MerVal <.MERV> index of most traded shares closed down 3.9 percent on the week at 374.1 points Friday, leaving it off 45.6 percent so far this year. In BRAZIL, general elections Sunday were seen as setting the mood for the week, though traders expected the market to quickly focus on what fiscal measures the new administration could announce. Sao Paulo's benchmark Bovespa index closed up 7.53 percent on Friday at 6,410 points, leaving the bourse down 37.1 percent so far this year. CHILEAN shares were also seen tied to Brazil. "If he wins, stocks will rise on Monday and Tuesday. After that, I don't know," a trader said. The IPSA <.IPSA> index of the leading 40 stocks rose 1.77 percent on the week to end at 65.59 points on Friday. MEXICAN stock watchers were also cautiously optimistic that a win by Cardoso would keep the local bourse on the upside. "It (the Brazilian election result) has already been very discounted, but if there are no surprises, things look good and that will keep the bourse on the upside," said Carlos Samano, research chief at Mexico City's Bancomer brokerage. Domestically, dealers said they would look for signs of stability by the free-floating peso currency that would allow interest rates to climb down at Tuesday's central bank auction and cease overshadowing equities as an investment option. The local bourse's 35-share IPC index <.MXX> ended at 3528.65 points on Friday, down 4.73 percent and 46.5 percent for the year in dollar terms. VENEZUELAN share prices were also seen tracking global markets, with all eyes on the results of the G7 and IMF meetings in Washington. "Everything depends on the what comes out of the G7," Venezuela's Incambios broker Carlos Lupini said. The bourse's 15-share <.IBC> index closed ahead 5.4 percent on the week Friday at 3,677.34 points, rallying on firmer oil prices and the prospect that former coup leader and front-runner Hugo Chavez may not win December's presidential elections. buenosaires.newsroom@reuters.com)) Copyright 1998, Reuters News Service