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

To: Steve Fancy who wrote (8873)	10/7/1998 12:19:00 AM
From: djane	Respond to of 22640

U.S. Congress closing in on IMF compromise Tuesday October 6, 11:00 pm Eastern Time (Updates with Livingston, Cox, detail on reforms) By Adam Entous WASHINGTON, Oct 6 (Reuters) - Congressional negotiators said on Tuesday an agreement was likely to be hammered out this week to boost the International Monetary Fund's reserves by up to $18 billion, but only if the White House promises to push through deep reforms at the lending agency. ''We're getting very close to working out a solid agreement with the Senate and with the White House, and I'm not going to prejudge or predetermine what that agreement will look like,'' House Appropriations Committee Chairman Bob Livingston, a Louisiana Republican, told reporters after a closed-door meeting with House leaders. The White House is seeking $18 billion from the Republican-led Congress to refill IMF coffers, drained by multibillion-dollar bailouts for Russia and three Asian states. The Senate has already approved the entire package. House Republicans want the IMF to be more accountable and to overhaul its lending policies -- policies that some experts believe encourage countries to adopt lax economic policies and encourage investors to take excessive risks because they expect a bailout. Livingston would not say whether the House leadership would support the full $18 billion package, though he recently said ''odds are good'' if President Bill Clinton agreed to the reform demands of Republicans. Senate Appropriations Committee Chairman Ted Stevens expects the final agreement to include the full amount requested by the White House. ''I believe we're going to get there and get the $18 billion before we're through.'' But the Alaska Republican said the IMF may have to implement some reforms ''before the bulk of the money is distributed.'' So far the Republican leadership in the House of Representatives has agreed to give the IMF only $3.4 billion, to pay the U.S. share of the New Arrangements to Borrow, an IMF emergency fund. If the U.S. administration wants the rest of the money -- $14.5 billion to replenish IMF reserves and increase its lending capacity -- House leaders say an agreement must first be reached on additional reform conditions. With time running out in the congressional session and markets in Latin America, Europe and the United States on edge, the U.S. administration and House Republicans are under mounting pressure to reach a compromise. At this week's annual meetings of the IMF and the World Bank, world leaders scolded the White House and Congress for not paying U.S. bills to the lending agency at a time of unprecedented crisis. ''I have told Congress we can debate how to reform the operations of the fire department, but there is no excuse for refusing to supply the fire department with water while the fire is burning,'' Clinton told the IMF conference. Because of IMF rules, other countries are waiting for the United States, the IMF's largest shareholder, to pay the fund before they chip in. Livingston said House and Senate negotiators were finalizing the reform conditions that would be attached to IMF funding. ''Once we get that conditionality, that conditionality will probably transfer to any agreement that the leadership has with the White House on the total amount.'' Livingston would not spell out the reform measures under consideration. But congressional aides said the legislation would require the IMF to release more information about its policies and operations to the public and Congress. It would also urge IMF borrowers to honor international trade agreements, and call on the IMF to curb the use of subsidized interest rates. By charging borrowers more, IMF loans may be less attractive to cash-strapped countries. California Republican Rep. Christopher Cox, who attended the leadership meeting, said the Treasury Department or the White House would be required to certify to Congress that the reform conditions were met, and report on progress even after U.S. funding is appropriated. ''It will impose strong conditions on our Treasury Department, with the hope of exerting leverage over the IMF and recipient nations,'' Livingston said. ''Obviously, within the context of an international agreement, there are limitations on our ability to exert that leverage.'' The White House has opposed many of these reform conditions in the past, arguing they would be impossible to implement at the IMF, which reports to 182 governments, not just to the United States. House Republican leaders plan to meet with White House Chief of Staff Erskine Bowles on Wednesday to discuss IMF funding and other legislative disputes. Congress plans to finish its work for the year on Oct. 9, though that date could be pushed back. Related News Categories: currency, international, options, US Market News Help Copyright © 1998 Reuters Limited. All rights reserved.

To: Steve Fancy who wrote (8873)	10/7/1998 12:24:00 AM
From: djane	Read Replies (1) \| Respond to of 22640

Drumbeat of support for Brazil but no IMF plan yet Tuesday October 6, 9:10 pm Eastern Time By Martin Langfield WASHINGTON, Oct 6 (Reuters) - Investors around the world held their breath on Tuesday as international leaders continued to show a steady stream of support for Brazil's embattled economy but a key financial aid package from the IMF failed to materialize. Economists say if Brazil becomes the next victim of an enduring world economic firestorm that has already claimed Asia and Russia over the last year, all of Latin America -- a key export market for the United States -- would tip into recession. The country has been hemorrhaging several hundred million dollars a day for weeks on concerns about its large fiscal deficit and the vulnerability of its currency, the real, to speculative attack. Argentine President Carlos Menem said on Tuesday he expected Brazil and the International Monetary Fund to announce a financial aid package for Latin America's biggest economy -- and the world's ninth largest -- as early as next week. ''They're working rapidly to implement this assistance,'' he told a news conference on the sidelines of the IMF and World Bank annual meeting in Washington. When asked when the aid package would be announced, he said: ''Perhaps not this week. Perhaps next week they'll be making the corresponding announcement.'' U.S. President Bill Clinton, in a speech at the opening ceremony of the meeting, also spoke up for Latin America, the region most immediately exposed to crisis if Brazil falls. Brazil alone accounts for 45 percent of the goods and services produced in Latin America. He said a plan he proposed last week to set up precautionary lines of credit for nations at risk from global economic turmoil despite sound economic policies ''was a critical way to prevent the present crisis from reaching Latin America and other regions which are doing well.'' Menem said he had discussed Brazil's plight with Clinton during a meeting on Tuesday as well as with other world leaders. ''Brazil's situation is going to improve, according to the conversations I have had with some leaders of the developed world, among them President Clinton,'' he said. Bankers expect the IMF to announce a package of around $30 billion to reestablish confidence in the Brazilian economy, which is being undermined by investors pulling funds out in favor of what they see as safer investments in dollars. Menem said the financial package for Brazil, if and when it was announced, will be a boon not just for the Brazilian economy but for Brazil's partners in Mercosur, the South American customs union. Menem said the IMF and World Bank were also looking at a contingency credit facility to help other countries in Latin America facing balance of payments problems, particularly Venezuela and Ecuador, that have been hit by low oil prices. Menem was confident that Brazil's liquidity problems would be overcome with IMF backing and the strong fiscal steps President Fernando Henrique Cardoso has taken and will continue adopting now that he has been reelected. In Brazil, a senior finance ministry official said officials were working on a cost-cutting fiscal program for 1999 to 2001. Cardoso, who appeared on course to win elections held on Sunday without the need for a second-round vote, spent the day with advisers and was thought to be preparing an announcement of new fiscal measures as early as this week. ''The president has already said we are going to have to (announce it) ahead of schedule,'' Finance Ministry Executive Secretary Pedro Parente said. ''For the moment, no date has been set.'' Brazilian officials backed away from an indication on Monday by Central Bank President Gustavo Franco that Cardoso would detail the fiscal plan in an address to the nation as early as Tuesday. Brazilian shares ended higher on Tuesday after riding out a volatile session, taking heart from a slight rebound on Wall Street, brokers said. ''Investors are unsure about taking firm positions until details of a new fiscal plan, which could include tax hikes, are made clear,'' said one trader at Corretora Doria & Atherino. ''So they tend to follow Wall Street.'' The market's key Bovespa index closed up 3.49 percent after climbing as much as 6.5 percent in the morning session. On Monday Germany's Bundesbank President Hans Tietmeyer said the IMF hoped to have an overall plan to ensure stability in Brazil soon, once Brazil presented a credible program for its economy and the involvement of private banks was resolved. U.S. Deputy Treasury Secretary Lawrence Summers echoed that theme, also saying that a plan for Brazil would ''be in the context of Brazilian commitments.'' Related News Categories: currency, international, options, US Market News Help Copyright © 1998 Reuters Limited. All rights reserved.

To: Steve Fancy who wrote (8873)	10/7/1998 12:16:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Cardoso Has 52.8% Of Vote - 93% Ballot Boxes In Dow Jones Newswires BRASILIA -- As the vote counting from Sunday's presidential election entered the final stretch Wednesday, President Fernando Henrique Cardoso continued to widen his lead over his main opponent. With 93% of the ballot boxes counted by the Electoral Court, Cardoso of the Social Democratic Party (PSDB) had 52.8% of the valid votes, 2.8% percentage points more than the 50% plus one vote that he needs to win in the first round. His main challenger, Luiz Inacio Lula da Silva of the leftist Workers' Party (PT), had 32.0% of the vote, while third-placed Ciro Gomes of the Popular Socialist Party (PPS) has 11.1%. Although voting is obligatory for the 106 million voters between the ages of 18 and 70, an estimated 20% had abstained and 12% had submitted blank or voided votes. The Electoral Court said results won't be final until Friday. Cardoso has yet to address the nation after the election, although the presidential palace said he may do so on Wednesday or Thursday. -By Mary Milliken; (55-11) 813-1988; mmilliken@ap.org

To: Steve Fancy who wrote (8873)	10/7/1998 12:19:00 PM
From: Steve Fancy	Respond to of 22640

SEC Approval For Brazil Telebras Spinoff ADRs Delayed-Govt October 6, 1998 Dow Jones Newswires NEW YORK -- The much-awaited listing of recently privatized spinoffs of Telecomunicacoes Brasileiras SA (TBR, TBH) is being held up by the registration process with the U.S. Securities and Exchange Commission, according to a Brazilian official quoted Tuesday by the Estado news agency. Estado said Minister Luiz Carlos Mendonca de Barros won't travel to New York this week for the launching of the 12 new American depositary receipts because the registration with the Securities and Exchange Commission was delayed a little. "It was set for next week, but I'm not sure," Mendonca was quoted by Estado as saying. Government officials had said that the spinoffs would list their ADRs this week. However, a source at Telebras told Dow Jones Newswires Tuesday that the registration process is far from over, adding that next week would seem too optimistic a target. The new companies received comments from the SEC on Friday, which they have to address, according to the Telebras source, who asked not to be named. "First the companies have to respond to the satisfaction of the SEC. Then a date of record (for distribution of ADRs) has to be set, and six days given for the analysis of company data before the listing," he said. "I don't see it happening by next week." -By Margarita Palatnik; 201-938-2226; margarita.palatnik@cor.dowjones.com

To: Steve Fancy who wrote (8873)	10/7/1998 12:22:00 PM
From: Steve Fancy	Respond to of 22640

REPEAT:Brazil Won't Announce Austerity Goals This Week Dow Jones Newswires SAO PAULO -- The Brazilian government won't announce the goals of its multi-year fiscal austerity plans this week, the Estado news agency quoted a top official as saying Tuesday. Planning and Budget Ministry executive secretary Martus Tavares said that the austerity measures involve long-term structural issues. He said the plans deal with a complete overhaul of the system of public spending management. Two weeks ago in a nationally-televised address, President Fernando Henrique Cardoso pledged to attack the country's public deficit through the implementation of a three-year fiscal adjustment plan. Market sources have said the measures are desperately needed to restore investor confidence in Brazil. Ealier Tuesday, the government announced that 150 appointed federal posts would be scrapped as part of a general cost-savings effort. Federal Administration minister Claudia Costin also announced Tuesday that "for the meantime" only one of every six civil servant positions that come open through retirement or death will be filled. The decisions were made at the weekly meeting of the Fiscal Control Committee, which was established to oversee the 4 billion-real ($1=1.18) budget cuts unveiled in early September as Brazil's reserves fell amid market turmoil.

To: Steve Fancy who wrote (8873)	10/7/1998 12:23:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Aid Package Seen In "20 Days" - Ministry Official Dow Jones Newswires WASHINGTON -- A Brazilian finance ministry official Wednesday said announcements regarding an international support package for Brazil will be made public in the next 20 to 30 days. Marcos Caramuru, secretary of international relations of Brazil's finance ministry, said, "In the next 20 days or month, we will see action by G-7 and other organizations in the direction that will alleviate the effects of contagion in Brazil." He was speaking at a conference on the contagion effect in emerging markets organized by the Inter-American Development Bank. "One thing we have seen from these meetings is that there is a change in perception about how to deal with contagion," Caramuru said.

To: Steve Fancy who wrote (8873)	10/7/1998 12:25:00 PM
From: Steve Fancy	Respond to of 22640

Cardoso Virtually Elected;Brazil Turns To Gubernatorial Race Dow Jones Newswires SAO PAULO (AP)--Attention has shifted in Brazil from the president's almost-certain re-election to gubernatorial runoff elections, on which the success of belt tightening measures deemed necessary to avert an economic meltdown may hinge. With 93 percent of the votes counted Wednesday, President Fernando Henrique Cardoso continued to lead with 52.8% of the vote. His closest rival, Luiz Inacio Lula da Silva of the leftist Workers Party had 32%, and Ciro Gomes of the Popular Socialist Party had 11%. Nine other candidates shared the rest. Cardoso must win more than half the vote from Sunday's election to avoid a second-round runoff - a feat he is expected to easily accomplish. The same rule applies to the gubernatorial candidates in all 27 states, and at least 14 of them appeared headed to a second round of voting on Oct. 25. "Governors have always exerted enormous influence on their states' congressional bloc," said Luciano Dias a Brasilia-based political consultant. "And the outcome of the runoff elections will definitely determine just how easy, or difficult, it will be for Cardoso to persuade Congress to approve the austerity measures." He said that if Cardoso opponents win runoff elections in the states of Sao Paulo, Rio de Janeiro, Minas Gerais and Rio Grande do Sul, "the going will get tough." Together, those four states occupy 200 of the 513 seats in the Chamber of Deputies and account for 67.29% of the country's gross domestic product. Brazil, like other emerging markets, is suffering from a loss of investor confidence and a strong outflow of capital. The country's foreign reserves have fallen below $50 billion from $70 billion the end of July. To prevent a collapse of the real and stem capital flight, interest rates were hiked to 50% a year. Cardoso has promised to tackle the country's ballooning a budget deficit - equal to 7.3% of gross domestic product - and hinted that taxes would be increased. Although most observers agree that the faster these measures are defined and introduced, the better, Cardoso is unlikely to impose them until after the second round of voting. To do so would jeopardize the chances of pro-government gubernatorial candidates.

To: Steve Fancy who wrote (8873)	10/7/1998 12:29:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Cardoso To Address Nation At 1800 GMT Dow Jones Newswires SAO PAULO -- Brazilian President Fernando Henrique Cardoso will address the nation Wednesday at 1800 GMT from his residence, a presidential spokeswoman said. After Sunday's presidential elections, Cardoso is expected to make a brief speech to thank voters for giving him a second term. It will be broadcast live on public television and will be made available to the private television stations. With 93% of the ballot boxes counted, Cardoso had 52.8% of the valid vote, comfortably above the 50% plus one vote to win in the first round. The final results are expected Friday.

To: Steve Fancy who wrote (8873)	10/7/1998 12:45:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's forex mkts see $101 mln inflow Tuesday Reuters, Wednesday, October 07, 1998 at 08:43 SAO PAULO, Oct 7 (Reuters) - Brazil registered net dollar inflows of $101 million through its foreign exchange markets on Tuesday, only the second day in six weeks that more dollars came into the country than left, traders said Wednesday. The surplus came as Belgium's Tractebel (BRU:TREB.T) brought money into the country to pay part of its September purchase of Brazilian utility Gerasul (SAO:GRSU6). A net $195 million entered Brazil on Tuesday through the commercial forex market, the Central Bank said, while some $94 million left through the floating forex market, according to traders. Investors began pulling their money out of emerging markets such as Brazil after Russia declared a debt moratorium. Dollar flight through Brazil's forex markets has topped $28 billion since the beginning of August, draining reserves and putting pressure on the government to devalue its currency. A hike in interest rates slowed the outflows. Two days of dollar inflows in October have meant that a net $1.874 billion has come into the country so far this month, compared with an outflow of $18.877 billion in September. Last week, foreign telephone companies agreed to pay in advance some of their purchases made during July's Telebras privatization auction. Still, traders expect outflows to resume until the government announces fiscal adjustments, which should help in obtaining foreign aid. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8873)	10/7/1998 12:51:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's forex mkts see $101 mln inflow Tuesday Reuters, Wednesday, October 07, 1998 at 08:43 SAO PAULO, Oct 7 (Reuters) - Brazil registered net dollar inflows of $101 million through its foreign exchange markets on Tuesday, only the second day in six weeks that more dollars came into the country than left, traders said Wednesday. The surplus came as Belgium's Tractebel (BRU:TREB.T) brought money into the country to pay part of its September purchase of Brazilian utility Gerasul (SAO:GRSU6). A net $195 million entered Brazil on Tuesday through the commercial forex market, the Central Bank said, while some $94 million left through the floating forex market, according to traders. Investors began pulling their money out of emerging markets such as Brazil after Russia declared a debt moratorium. Dollar flight through Brazil's forex markets has topped $28 billion since the beginning of August, draining reserves and putting pressure on the government to devalue its currency. A hike in interest rates slowed the outflows. Two days of dollar inflows in October have meant that a net $1.874 billion has come into the country so far this month, compared with an outflow of $18.877 billion in September. Last week, foreign telephone companies agreed to pay in advance some of their purchases made during July's Telebras privatization auction. Still, traders expect outflows to resume until the government announces fiscal adjustments, which should help in obtaining foreign aid. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8873)	10/7/1998 12:52:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Q2 GDP rises 1.53 percent versus Q2 1997 Reuters, Wednesday, October 07, 1998 at 10:44 RIO DE JANEIRO, Oct 7 (Reuters) - Brazil's gross domestic product (GDP) rose by 1.53 percent in the second quarter this year against the same period in 1997, the National Statistics Institute (IBGE) said Wednesday. The GDP showed an increase of 1.44 percent in the second quarter versus the first three months of 1998, the IBGE said. The figures have been seasonally adjusted and can be compared to a year-on-year rise of 4.78 percent in the second quarter 1997 and a slight drop of 0.11 percent in the first quarter 1998 from the last quarter of 1997. Output reported by Brazil's industrial sector increased by 7.05 percent in the second quarter this year versus the first quarter with a 5.52 percent rise in the agriculture sector and a 0.88 percent gain in the service sector. Copyright 1998, Reuters News Service