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

To: Steve Fancy who wrote (8995)	10/14/1998 6:36:00 PM
From: Steve Fancy	Respond to of 22640

Emerging debt mixed as investors sell on strength Reuters, Wednesday, October 14, 1998 at 16:45 NEW YORK, Oct 14 (Reuters) - Emerging market bond prices ended mixed Wednesday as several money managers continued to sell on any sign of strength in the sector, traders said. Emerging market bond prices rose with U.S. stock but were met with selling, driving prices just slightly higher or even lower on the day, traders said. Brazil's Finance Minister Pedro Malan was scheduled to explain to a Senate economic panel on Oct. 28 to 29 the government's plans to tighten fiscal controls. The government's economic team is working on a three-year fiscal adjustment plan at tackling a nominal budget deficit of around 7 percent of gross domestic product (GDP). Meanwhile, outflow of dollars from Brazil has slowed, but has not stopped, leaving lingering fears in the market about a potential devalution of the Brazilian real. Concerns about Brazil are keeping a lid on emerging market bonds as investors worry about whether the government will be able to push through reforms to obtain a contingency loan facility from the International Monetary Fund. Late Wednesday, Brazil benchmark "C" bonds were 5/8 higher at 62-5/8. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8995)	10/14/1998 7:02:00 PM
From: Steve Fancy	Respond to of 22640

LatAm mkts track overseas mkts, await Brazil news Reuters, Wednesday, October 14, 1998 at 17:34 By Shasta Darlington SAO PAULO, Brazil, Oct 14 (Reuters) - Latin American markets were mixed in early trade on Wednesday, tracking overseas exchanges as investors awaited news of a support package aimed at shielding Brazil, the region's biggest economy, from a financial crisis. The International Monetary Fund and Brazil confirmed they were wrangling out a line of credit, though details of the plan were not expected until after reelected Brazilian President Fernando Henrique Cardoso outlines measures to rein in the country's fiscal deficit. "Everybody is still talking about Brazil and when and if," said Bob Gay, chief Latin America strategist at Bankers Trust Corp. Cardoso is seen announcing fiscal measures next week, leaving investors hanging until the details are hammered out. "It's a wait-and-see game for everyone," Gay said. A steep devaluation in Russia's rouble currency sparked concern over other emerging markets and led to huge capital flight from Brazil that has drained its reserves, considered the country's main defense against a speculative attack. But Latin American markets may already be heading out of the woods after plunging to half their value in September, analysts said. "I think that was the bottom for both equity and debt markets," Gay said. "Though that doesn't mean we'll be coming off the bottom quickly." An international loan, hinging on deep fiscal adjustments, could provide needed resources and help boost confidence in Brazil's wobbly economic outlook. In the meantime, markets are relying even more on Wall Street and other markets to set the stage for daily trading. "Right now we're not seeing anything clear, either up or down, but some day the Brazil issue has to be decided," one Mexican foreign exchange dealer said. In Mexico, the leading IPC share index was up 0.548 percent at 3,596 points in morning trade, following a slight recovery of 0.23 percent gain in the Dow Jones industrial average. "There isn't much important news," said a trader at a Mexican brokerage. The market "is calm, linked to the Dow." Mexico's peso posted small gains at 10.1760 per dollar in morning trade with local markets showing little direction and players sidelined waiting for news on Brazilian fiscal measures. In Argentina, shares inched up following a turnaround on Wall Street. "We're going to be very tied to any news and what occurs outside," said BankBoston portfolio manager Florencia Greco. The MerVal <.MERV> index of most traded shares was trading up 0.49 percent at 395 points. In CHILE, stocks opened strong on light volume following a cut in interest rates there. "Although the interest rate cut infused the market with optimism, it's not reflected in an increase in trading volume," a trader at a local brokerage said. The benchmark stock index <.IPSA> was trading up 1.79 percent at 65.36 points. In BRAZIL, shares slumped following a solid rise the day before and on declines in Asia, though the recovered some ground after Wall Street turned up. "The external scenario is not at all satisfactory and even here there is no reason for an improvement in the market," a trader at a local brokerage said. Sao Paulo's key Bovespa (INDEX:$BVSP.X) index fell 1.17 percent to 6,541 points in early trade. In VENEZUELA, the benchmark IBC index <.IBC> was little changed, trading up 0.05 percent at 3,626 points in early trade. shasta.darlington@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8995)	10/14/1998 7:04:00 PM
From: Steve Fancy	Respond to of 22640

U.S. House leader sees approval of IMF funding Reuters, Wednesday, October 14, 1998 at 18:10 WASHINGTON, Oct 14 (Reuters) - U.S. House Majority Leader Dick Armey said on Wednesday that congressional Republicans would give $18 billion to the International Monetary Fund as part of a reform package, contingent on an overall budget accord. Armey, a Texas Republican, told Reuters the full $18 billion requested by the Clinton administration was included in a bill to fund the government's operations over the next year. When asked if the full $18 billion would be in that bill, Armey said, "Yes, it's done." But he stressed the cash for the IMF depended on the White House and congressional Republicans reaching agreement on the budget. washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8995)	10/14/1998 7:05:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shares slump 2.61 pct, awaiting fiscal news Reuters, Wednesday, October 14, 1998 at 17:23 SAO PAULO, Oct 14 (Reuters) - Brazilian shares closed down 2.61 percent in light trade on Wednesday as anxious investors awaited the details of a promised fiscal adjustment package before upping their stakes, traders said. "We're on the eve of a fiscal package and the whole world is waiting to see it to decide if they can take the government seriously," said a trader at BancoCidade. "There's a complete lack of buyers." Sao Paulo's key Bovespa (INDEX:$BVSP.X) index closed down at 6,445 points, despite a rise on Wall Street where stocks were trading up 0.4 percent, spurring gains throughout Latin America. Shares worth 421 million reais changed hands on Wednesday. Reelected Brazilian President Fernando Henrique Cardoso is expected to present within the next two weeks a plan to rein in the country's bloated fiscal deficit. Investors were waiting to see if the measures will be enough to open the door to a line of international credit and renewed confidence in the economy. Some $30 billion has left through Brazil's foreign exchange markets since the beginning of August as investors yanked their money out of emerging markets following Russia's devaluation of its currency. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (8995)	10/14/1998 7:09:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Cardoso, Malan Met On Fiscal Plan Late Tues,Early Wed Dow Jones Newswires BRASILIA -- Brazilian President Fernado Henrique Cardoso and his two top economic aides met until late Tuesday night and gathered again at the presidential palace early Wednesday as they hammer out details of a fiscal plan which is "expected soon," a highly placed presidential source said Wednesday. Cardoso will hold daily meetings with Finance Minister Pedro Malan and Malan's executive secretary Pedro Parente as they prepare the long-awaited fiscal adjustment program, the palace source added. He said no statements will be issued after the regular meetings. Last week Cardoso said in a televised address that his economic team would present a three-year fiscal plan for his review by Oct. 20 in response to the international financial crisis battering Brazil. Concrete details of the program are eagerly being awaited by the markets, as the plan is a requirement to receive eventual funding from the International Monetary Fund and other lenders.

To: Steve Fancy who wrote (8995)	10/14/1998 7:11:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Ctrl Bk: Intl Reserves Between $47B-$48B - Estado Dow Jones Newswires SAO PAULO -- Brazil's international reserves stand at between $47 billion and $48 billion, a top Central Bank official told the Estado news agency Wednesday. The last official figures from the monetary authority, for end-August, put the country's reserves at $67 billion. But government sources in recent weeks had estimated the figure to have dipped as low as $45 billion as foreign investors fled in droves fearing a deepening of the current market crisis. In an interview with Estado, the Central Bank's international reserves department head Maria do Socorro said that reserves should remain stable until the end of October. Socorro said that, before the end of the month, Spain's Banco Bilbao Vizcaya should enter the market with $700 million to complete its purchase of local bank Excel-Economico. Last Friday, the Spanish bank made a separate payment of $850 million. The Central Bank official also anticipates that ABN-Amro will pay between $2 billion and $3 billion in the coming weeks referring to its purcahse of capital in Brazil's Banco Real. The Central Bank official said that the big inflows will more than compensate for this month's $1.16 billion Brady debt servicing payment, which was made Tuesday. The last Brady payment was made on April 15 and the next one is scheduled for April 1999. A Central Bank spokesman said Wednesday that the Brady servicing was the primary reason for the net outflow of capital on Brazil's foreign exchange markets Tuesday. Brazil showed a net outflow of $665 million on Tuesday, after registering a net inflow of $504 million last Friday. Monday was a market holiday. For the month, Brazil's forex markets have recorded a net inflow of $1.06 billion. Socorro added that all current outflows are "absolutely expected" foreign debt remunerations. -By Stephen Wisnefski and William Vanvolsem; (5511) 813-1988

To: Steve Fancy who wrote (8995)	10/14/1998 7:13:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Court To Evaluate Proposed Govt Stake Sale In Telecom Dow Jones Newswires SAO PAULO -- Brazil's Federal Audit Court, or TCU, decided Wednesday the government can't sell its minority stake in telecommunications company Tele Norte Leste SA (E.TNL) until an investigation ends, a court spokeswoman said. Tele Norte Leste is one of 12 units of federal holding Telecomunicacoes Brasileiras SA, or Telebras (TBR, TBH) privatized on July 29. A group led by Brazilian construction giant Andrade Gutierrez purchased the fixed-line company for 3.43 billion reals (BRR) ($1=BRR1.18), but later relinquished a 25% stake to the national development bank, or BNDES. The spokeswoman said that the TCU will look into legality of the BNDES's acquisition of the equity stake as well as the bank's decision to sell the shares. TCU judge Carlos Atila said Wednesday that he expects the investigation to be completed within 30 days, the Estado news agency reported. He added that the process is routine and that there's no cause for concern that the court will block the sale of the shares. Local media reports Wednesday quoted Communications Minister Luiz Carlos Mendonca de Barros as saying that the government will auction the 25% stake in late November or early December. The minister has also said recently that Telecom Italia (TI), which purchased three other Telebras units, is interested in acquiring the Tele Norte Leste shares. The TCU also said Wednesday that it will look into the legal conditions of BNDES financing for the so-called "mirror companies" that the government will establish to compete with privatized Telebras units. -By Stephen Wisnefski; (55-11) 813-1988; swisnefski@ap.org

To: Steve Fancy who wrote (8995)	10/14/1998 7:14:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

Brazil's Govt Sets Fiscal Moves Release For Tues - Estado Dow Jones Newswires SAO PAULO -- A top Brazilian official said late Wednesday that the government plans to announce fiscal austerity measures Tuesday, the Estado news agency reported. Asked if the government would delay the much-anticipated release of the measures until after key state gubernatorial races are decided Oct. 25, Planning and Budget Minister Paulo Paiva said "We've scheduled it for Oct. 20." President Fernando Henrique Cardoso said last week that his team of economic advisors would put together a multi-year fiscal adjustment plan for his review by Oct. 20. On Tuesday, presidential spokesman Sergio Amaral hinted that the measures could be announced around that same date. Financial markets are eagerly awaiting the government's plans to attack the country's massive public deficit - at 7% of gross domestic product - and restore confidence among investors who have fled over the past two months.