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

To: Steve Fancy who wrote (8839)	10/5/1998 3:42:00 PM
From: steve kammerer	Respond to of 22640

Steve, what is going to be done with any "cautionary funding" by the IMF. Japan's banks have tremendous amounts invested in Brazil, its banks and its bonds. In order to solve their own problems, money is being repatriated to Japan. So are we going to hand money to Japan by means of the IMF with Brazil being the conduit? stevek

To: Steve Fancy who wrote (8839)	10/5/1998 3:58:00 PM
From: Steve Fancy	Respond to of 22640

Brazil pressured for fast fiscal deal-US investors Reuters, Monday, October 05, 1998 at 12:42 By Apu Sikri NEW YORK, Oct 5 (Reuters) - Brazilian President Fernando Henrique Cardoso, on course to win a second term in office, has little time to savor his victory as investors demand a fiscal package from the government sooner rather than later, according to U.S. economists and money managers. A reelected Cardoso government will have to produce a credible fiscal reform package within weeks if not days to stem a steady outflow of dollars that has slashed Brazil's foreign exchange reserves from $75 billion about two months ago to about $45 billion currently, economists and investors said. "Cardoso's victory was largely priced into the market. So people have been selling into any strength in prices," said Michael Casey, portfolio manager at Federated Investors. Brazil's benchmark "C" bonds slid by 1-5/8 early Monday in New York amid a broad decline in key stock markets around the globe. Meanwhile, the benchmark 48-hour Mexican peso was weaker at 10.23 pesos per dollar from Friday's close of 10.18. As the Brazilian real trades within a crawling peg, traders often use the freely-convertible Mexican peso as a gauge of broad market sentiment on Latin American currencies. In Washington, Brazil central bank president Gustavo Franco said he saw Brazil reaching an agreement with the International Monetary Fund on a contingency credit facility. His remarks reinforced market perception that the United States, the IMF and other multilateral agencies will provide the necessary financial framework to help Brazil defend the real in the weeks ahead before a fiscal package is announced. "The multilateral agencies and the international community (of Group of Seven countries) realize that if there is one place where they have to take a stand -- a fort that they have to hold up -- it is in Brazil," said Rafael de la Fuente, economist at Paribas Securities. Yet, the support of mighty international lenders will merely buy Brazil a little time, according to some investors. "Feeding more money to Brazil is not the solution. The problem is that historically, comments by Brazil that they are addressing the issue have been to no avail," said Hari Hariharan, portfolio manager at Santander New World Investments. "This time, they need to take some tough measures to cut the twin fiscal and current account deficits, and they need to follow through," he said. Any new financial reform package must include rolling over Brazil's huge domestic debt, investors said. "The key question here is whether Brazil can sell local currency securities at an interest rate which will not send them the Russia way and at the same time ensure that investors are getting a fair return on investments," said Santander's Hariharan. Russia defaulted on domestic debt two months ago after interest rates on local bonds escalated to nearly 150 percent amid a sharp drop in investor confidence. Brazil, Latin America's largest economy, is seen as the linchpin of stability in Latin America. G-7 countries have supported the Cardoso government's strong defense of the real amid fears that a devaluation of the real would trigger a round of competitive devaluations in the region. Investors warned Monday that Brazil will have to repair its financial house amid intense global market uncertainty. With banks struggling with losses from exposures to other risky investments, such as hedge fund lending, the availability of external capital to Brazil and other emerging market countries will be limited. Faced with a credit crunch abroad, Brazil will have to make tougher choices at home. These tough fiscal measures such as government spending cuts could impair domestic demand and throw Brazil in a recession, economists warned. But it is a price the Cardoso government may have to pay to avoid rampant inflation and chronic budgetary deficits, economists said. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8839)	10/5/1998 4:02:00 PM
From: Steve Fancy	Respond to of 22640

TABLE-Partial results for Brazil general election Reuters, Monday, October 05, 1998 at 13:14 RIO DE JANEIRO, Oct 5 (Reuters) - The following table shows partial results of Brazil's 1998 general election as computed by the Superior Electoral Tribunal on Monday for president and governors of the biggest states by gross domestic product. BRAZIL PRESIDENT (at 0920 EDT/1320 GMT) PCT OF VALID VOTES COUNTED Fernando Henrique Cardoso (PSDB) 50.62 percent Luiz Inacio Lula da Silva (PT) 34.65 Ciro Gomes (PPS) 11.24 Other candidates combined 3.47 Blank ballots 4.70 Void votes 11.28 Total votes counted 49.73 GOVERNORS SAO PAULO (as of 0848 EDT/1248 GMT) Paulo Maluf (PPB) 31.48 Marta Suplicy (PT) 23.89 Mario Covas (PSDB) 23.22 Francisco Rossi (PDT) 17.17 Other candidates combined 4.24 Total votes counted 67.15 RIO DE JANEIRO (as of 0835 EDT/1235) Anthony Garotinho (PDT) 46.87 Cesar Maia (PFL) 34.27 Luiz Paulo (PSDB) 15.52 Other candidates combined 3.33 Total votes counted 79.56 MINAS GERAIS (as of 0857 EDT/1257 GMT) Itamar Franco (PMDB) 44.09 Eduardo Azeredo (PSDB) 34.60 Patrus Ananias (PT) 20.75 Other candidates combined 0.55 Total votes counted 40.14 RIO GRANDE DO SUL (as of 0910 EDT/1310 GMT) Olivo Dutra (PT) 51.44 Antonio Britto (PMDB) 41.43 Emilia Fernandes (PDT) 5.78 Other candidates combined 1.24 Total votes counted 45.61 BAHIA (as of 0856 EDT/1256 GMT) Cesar Borges (PFL) 65.60 Joao Durval (PDT) 19.96 Zezeu Ribeiro (PT) 12.61 Other candidates combined 1.83 Total votes counted 27.92 List of Brazilian parties (in order of importance in the Chamber of Deputies): PSDB = Brazilian Social Democratic Party (President Cardoso's party, describes itself as centre-right) PFL = Liberal Front Party (conservative, allied to Cardoso's PSDB) PMDB = Brazilian Democratic Movement Party (allied to Cardoso) PPB = Brazilian Progressive Party PT = Workers' Party (main opposition candidate Luiz Inacio Lula da Silva's party) PDT = Democratic Labour Party (left-wing opposition) PTB = Brazilian Labor Party PSB = Brazilian Socialist Party PL = Liberal Party PC do B = Communist Party of Brazil PPS = Popular Socialist Party PSD = Social Democratic Party PMN = National Mobilization Party PV = Green Party PSTU = Socialist United Workers' Party Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8839)	10/5/1998 4:03:00 PM
From: Steve Fancy	Respond to of 22640

US 30-yr T-bond yield at record low on Brazil fear Reuters, Monday, October 05, 1998 at 13:55 NEW YORK, Oct 5 (Reuters) - The benchmark 30-year Treasury bond yield broke below the 4.75 percent technical level and eased to 4.70 percent, its price up 2-1/2 points early Monday Monday afternoon amid concerns about Brazil's ability to implement critical economic reforms. "Some people hold the view that if Brazil doesn't announce that it will take measures X, Y and Z at a certain time on a certain day, its currency will get destroyed and the rest of Latin America will be dragged down with them and there will be a recession," said Henry Willmore, senior economist at Barclays Capital. Bond prices opened higher and were in the plus column all morning as equity markets weakened and concerns about Brazil fueled the flight to U.S. Treasuries. Late last week, some technical analysts had projected 4.75 percent as a psychological resistance point. "A number like 4.75 percent, in perhaps a more normal time, would have acted as a type of resistance," said David Ging, a Treasury market analyst at DLJ Securities. "Right now, the overriding factor is fear." In Brazil, President Fernando Henrique Cardoso won just enough votes in Sunday's election to avoid a run-off that anlaysts said could have delayed economic reforms investors see as essential to avoiding a crippling devaluation. Since Brazil accounts for 45 percent of Latin America's total economic output, economists say a devaluation of its currency would severely hurt its neighbors' economies and also could slow U.S. growth. When investors do not see a credible program for Brazil's economy, they buy bonds "because they think it spells global recession," said Willmore. 212-859-1679)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8839)	10/5/1998 4:05:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Cardoso to address nation, maybe Tuesday Reuters, Monday, October 05, 1998 at 14:02 WASHINGTON, Oct 5 (Reuters) - President Fernando Henrique Cardoso will address the Brazilian people, perhaps as early as Tuesday, to explain the steps his administration will take to defend the economy from global turmoil, Central Bank President Gustavo Franco said on Monday in Washington. "The president will address the nation, perhaps tomorrow to address those issues," Franco told reporters when asked what types of fiscal measures Brazil was preparing to take amid the global financial crisis. Franco spoke upon leaving a forum held by the U.S.-Brazilian Chamber of Commerce on the sidelines of the Annual IMF/World Bank meeting. Franco added that Cardoso, who appeared to have won presidential elections outright on Sunday, was ready to include "preventive measures" in the initial stages of his keenly-awaited new fiscal plan, but he did not elaborate. Brazilian officials are in Washington talking about an International Monetary Fund (IMF) financing package for the country, the world's ninth largest economy and the economic powerhouse of Latin America, to support Cardoso's new fiscal program. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8839)	10/5/1998 4:07:00 PM
From: Steve Fancy	Respond to of 22640

World prepared to help Brazil-Treasury's Summers Reuters, Monday, October 05, 1998 at 14:09 WASHINGTON, Oct 5 (Reuters) - U.S. Deputy Treasury Secretary Lawrence Summers said on Monday the international community was prepared to help Brazil fend off economic turmoil, but noted any assistance would be contingent on Brazil's actions. "The international community greatly respects what has taken place in Brazil and is certainly prepared to be supportive of Brazil at this important junction," Summers told a news briefing at the White House. But he added that any international assistance could only work as a supplement to strong action by Brazil itself. "Any actions that the international community would take would have to be in the context of Brazilian commitments," Summers said. 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8839)	10/5/1998 4:08:00 PM
From: Steve Fancy	Read Replies (5) \| Respond to of 22640

Brazil-IMF deal not seen Tuesday, IMF's Loser says Reuters, Monday, October 05, 1998 at 14:14 WASHINGTON, Oct 5 (Reuters) - An IMF financial support package for Brazil will not be announced by Tuesday and may take a week or so, Claudio Loser, director of the International Monetary Fund's Western Hemisphere Department, said on Monday. "It will not be tomorrow, we are talking about the next week or so," Loser told reporters, adding that no "horse-trading" was taking place between the Brazilian government and IMF authorities to decide the contents of the government's upcoming fiscal package. "I am very optimistic...that they have confronted this difficult situation (and it) has focused their minds very clearly," Loser added. "We have never had to tell them what has to be done. They understand very clearly...that they have to deepen the process of fiscal reform." President Fernando Henrique Cardoso, who appeared to have won an outright victory on Sunday in his reelection bid, has pledged an austere fiscal plan to defend Latin America's economic powerhouse from the effects of global financial turmoil. Brazilian officials are in Washington to discuss an International Monetary Fund financing package to support Cardoso's fiscal plan. Central Bank President Gustavo Franco said on Monday that Cardoso would give details of the fiscal plan in an address to the Brazilian people that could take place as early as Tuesday. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8839)	10/5/1998 4:14:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Ctrl Bk Says Reserves At $47 Bln Friday -Estado Dow Jones Newswires SAO PAULO -- Brazilian Central Bank director of international affairs Demosthenes de Pinho Neto said Monday the country's foreign reserves last Friday stood at $47 billion, the Estado news agency reported Monday. Pinho Neto, speaking at a press conference on the sidelines of the International Monetary Fund meeting in Washington, said Brazil will receive at least $4 billion this month, with banks Banco Bilbao Vizcaya SA and ABN-Amro NV bringing in $3 billion for their purchases of Brazilian banks. He said the daily net outflow of dollars has slowed in the last few days to $400 million. "The outflows stabilized to the pace of the obligations we have abroad," Pinho Neto said.

To: Steve Fancy who wrote (8839)	10/5/1998 4:16:00 PM
From: Steve Fancy	Read Replies (4) \| Respond to of 22640

REPEAT: Brazil's Cardoso Has 51.0% Vote, Lula 34.2% - 61% Tallied Dow Jones Newswires BRASILIA -- As election returns trickle in Monday afternoon, Brazilian President Fernando Henrique Cardoso has slightly widened his lead over his nearest challenger and continues with the majority of votes needed to win in the first round. With 61% of the voting districts reporting, the Electoral Court said Cardoso, of the Social Democratic Party (PSDB), had 51.0% of the valid votes, up from 50.4% early in the day. His main challenger, Luiz Inacio Lula da Silva from the leftist Workers' Party (PT), won 34.2% of the votes, down from 35.2% in the morning. The third candidate, Ciro Gomes, of the Popular Socialist Party (PPS), had dipped to 11.1% from 11.3%. A presidential spokesman said that final results aren't expected until Friday. Of the 58 million votes counted thus far, 9.5 million were either blank or voided. Voting was obligatory for the 106 million Brazilians between the ages of 18 and 70. So far, neither Cardoso or Lula have made public statements. The presidential spokesman said that Cardoso wouldn't be making any comments until results were official. Lula was expected to give a news conference on Monday, but media reported that he had also declined to speak until results were final. -By Mary Milliken; (55-11) 813-1988; mmilliken@ap.org