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

To: Steve Fancy who wrote (8851)	10/5/1998 10:39:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs off 4.47 pct, awaiting fiscal details Reuters, Monday, October 05, 1998 at 16:27 SAO PAULO, Oct 5 (Reuters) - Brazil shares closed sharply off on Monday after general elections failed to enliven a market hungry for details about fiscal measures that could win the country international aid, traders said. Investors shrugged off the apparent first-round victory of President Fernando Henrique Cardoso, set to be Brazil's first democratically re-elected president, amid the year's lightest daily trade. Sao Paulo's key Bovespa index ended off 4.47 percent at 6,123 points, tracking a drop on Wall Street, where the Dow Jones Industrial Average was down 0.8 percent. "Re-election was already factored into stock prices," said a trader at BankBoston. "The biggest standout today was volume, which was nothing due to the lack of information about what investors are waiting to find out." Shares worth 193.1 million reais traded hands, making it the lowest daily trading volume so far this year, compared with average daily trading of 700 million reais in June. Partial results showed Cardoso winning a first-round victory with 50.99 percent of the vote compared to second-place challenger Luiz Inacio Lula da Silva's 34.24 percent. Final results are due out Friday. Brazilian officials and representatives of international agencies reiterated Monday that they are in talks to provide a precautionary fund for Brazil, but no new details of the negotiations were revealed. Cardoso may speak as soon as tomorrow about fiscal measures that have to be taken to access international aid, one official said. Among Brazil's blue chips, Telebras receipts (SAO:RCTB40) slipped 4.1 percent to close off 79.50 reais. State-owned oil company Petrobras preferred (SAO:PETR4) ended off 4.7 percent at 111.50 reais. Eletrobras preferred (SAO:ELET6) tumbled 5.86 percent to close off at 22.50 reais, and iron ore miner Cia Vale do Rio Doce preferred (SAO:VALE5) closed off 3.78 percent at 17.80 reais. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8851)	10/5/1998 10:42:00 PM
From: Steve Fancy	Respond to of 22640

Brazil nears financial package for battered economy Reuters, Monday, October 05, 1998 at 17:27 By Anthony Boadle WASHINGTON, Oct 5 (Reuters) - Brazil's government, pumped by the support of Brazilian voters, is moving closer to securing a financial aid package that will help the country's battered economy ride out the storm on capital markets, officials said on Monday. International Monetary Fund officials said Brazil was in line for a financial aid package that would be announced once President Fernando Henrique Cardoso unveils a tough program of spending cuts expected in the next week or so. "We are actively exchanging ideas with the IMF...and we may indeed reach an understanding on international resources to help Brazil go forward with our fiscal program," Brazil's Central Bank President Gustavo Franco said. Franco said it was still too early to put a figure on the package for Brazil, which investors expect to be between $25 and $30 billion. Financial aid from the IMF is seen as crucial to defending the Brazilian currency, the real, from collapsing under the heavy strain it has suffered since the Aug. 17 default by Russia caused panic on markets. "It is early to say. It is being discussed and will soon be released," he told investors and analysts on the sidelines of the annual IMF and World Bank meetings in Washington. Bundesbank president Hans Tietmeyer said the IMF hoped to have an overall plan to ensure stability in Brazil soon. "We want to reach an overall concept in the foreseeable future," Tietmeyer told a news conference. Tietmeyer said Brazil had to present a credible program for its economy and the involvement of private banks resolved before the IMF decided on its contribution. President Cardoso appeared to have won a historic second term in Sunday's elections, with over half the votes counted giving him enough of a lead to avoid a damaging run-off. The social democrat president won 50.4 percent of the vote versus 34.86 percent for left-wing challenger Luiz Inacio Lula da Silva, after 52 percent of the votes had been counted. That slimmer-than-expected margin was not enough to settle world financial markets, which are nervously watching Latin America's largest economy for signs that its currency, the real, could follow the Russian rouble to devaluation. The result was not enough to boost optimism in local markets, where Brazilian shares fell 5 percent in morning trading, as investors wait to see how tough the government's cut will be. Franco said Brazilian authorities were hurrying to draw up a three-year economic program now that the Brazilian people had voted in support of the government's strategy to stabilize the economy and reduce the state's enormous deficits. "This is being hurried. It is under way. It will take some time to unfold, but we will start to release it as soon as possible," Franco said. The Central Bank chief said the austerity program should bring interest rates down and thus reduce the high cost Brazil faces in financing its public debt. Franco said Brazil's capital market financing needs through the end of next year were "very moderate" thanks to the continued inflow of foreign direct investment and trade financing. "Our problem is one of confidence ... and the question of restoring confidence goes well beyond Brazil," he said. "The only thing we need from international markets is normalcy ... a rapid normalization of markets," Franco said. Brazil has lost $28 billion through foreign exchange markets since the beginning of August. With an economy that accounts for 45 percent of Latin American gross domestic product and $35 billion of investment from U.S. firms, the worry is that if Brazil falls, it will drag down the region. Franco stressed there would be no devaluation of the real. IMF officials have said it was "conceivable" that Brazil could speed up the pace of its crawling-peg depreciation of the real against the U.S. dollar. "That is not under discussion," Franco told reporters. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8851)	10/5/1998 10:44:00 PM
From: Steve Fancy	Respond to of 22640

US farmers to IMF: Don't force Brazil devaluation Reuters, Monday, October 05, 1998 at 19:01 WASHINGTON, Oct 5 (Reuters) - The United States' largest farm group expressed concern on Monday that U.S. farm exports and prices could sag even further if Brazil is forced to devalue its currency, the real. In a letter to members of Congress, the American Farm Bureau Federation repeated its support for full U.S. funding for the International Monetary Fund. But it said that support hinged on the currency issue. "IMF support must be directed at stabilizing currencies -- not devaluating them," AFBF President Dean Kleckner said in a statement. "At a time when American farmers are already facing low prices, the last thing they need is increased competition created by an artificial currency devaluation." Brazil is already a major agricultural export competitor of the United States. A large currency devaluation would make its ag products more competitive, while possibly triggering a recession throughout Latin America, the AFBF said. On the heels of the financial crisis in Russia, nervous investors have been pulling capital out of emerging markets around the world, especially from countries like Brazil with glaring problems such as big fiscal deficits. To help restore confidence, the IMF has begun work on an assistance package, which some economists estimate could be in the range of $30 billion. "The IMF can play an important role in keeping international financial markets open and currencies stable, provided it does not insist on currency devaluations and major economic austerity policies in recipient countries," Kleckner said. +1 202 898 8341, fax +1 202 898 8383, washington.commodsenergy.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8851)	10/5/1998 10:45:00 PM
From: Steve Fancy	Respond to of 22640

White House seen mulling IMF reforms -US lawmaker Reuters, Monday, October 05, 1998 at 21:22 WASHINGTON, Oct 5 (Reuters) - The chairman of a key House panel on Monday said funding for the International Monetary Fund will be one of the last issues Congress takes up before it adjourns, and said he felt the White House was more amenable to Republican demands for IMF reforms. "I sense that they are considering it," House Appropriations Committee Chairman Bob Livingston said when asked if thought the White House would accept IMF reforms as a condition for providing $18 billion to the international lending agency. With Congress planning to adjourn for the year this weekend, the Louisiana Republican told reporters he expected IMF funding would be one of the last issues it settles. The White House is seeking $18 billion for the IMF to use to help bail out crashing economies in Asia and South America. But House Republicans so far have agreed to provide just $3.4 billion to cover the U.S. share of an emergency fund, saying $14.5 billion to replenish the agency's reserves should hinge on the IMF changing its policies to be more accountable. The standoff over IMF funding has stalled legislation to fund U.S. foreign aid, one of the 13 spending bills Congress is trying to pass by this weekend to keep money flowing to federal agencies this fiscal year and prevent a government shutdown. Livingston said congressional aides have "attempted to assemble conditions which cross the gamut of all the proposals and hopefully will be acceptable" if lawmakers agree to advance the full IMF funding. Livingston said he was going to review the reform plan later today. "The fact is that...the IMF's record in the last couple of years hasn't been stellar," he told a group of reporters. "If the IMF had been working, we probably wouldn't have the crisis that we have abroad. Indonesia may have collapsed because of recommendations by the IMF," he said, adding that it was not clear if the IMF could help flagging economies of Russia, Brazil or Japan. Copyright 1998, Reuters News Service