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

To: Steve Fancy who wrote (9565)	11/10/1998 5:26:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs end off, profit-takers end 6-day rally Reuters, Tuesday, November 10, 1998 at 15:50 SAO PAULO, Nov 10 (Reuters) - Brazilian stocks ended sharply lower on Tuesday as profit-takers dropped blue chips following a six-day rally that had pushed the Bovespa index (INDEX:$BVSP.X) up 26 percent, traders said. The Bovespa ended down 2.94 percent at 8,000 points on moderate volume of 435 million reais ($362.5 million). "Everybody is just waiting for the International Monetary Fund (IMF) deal to come out, but it now seems it will not be ready until Thursday. That made profit-taking inevitable today," said one trader at local Corretora Doria & Atherino. Talks between the IMF and Brazil on a multibillion dollar loan package to save Latin America's economic giant may drag out until the week's end, Washington sources said on Tuesday. The market's bellwether issue, Telebras preferred receipt (SAO:RCTB40), ended down 2.42 percent at 101 reais and Petrobras preferred (SAO:PETR4) closed off 2.15 percent at 182 reais. Traders predicted investors would keep prices floating around today's closing on Wednesday, prior to the Central Bank's policy makers' meeting on interest rates. Analysts forecast the bank to lower lending rates, now at 49.75 percent, to anywhere between 49.25 and 33.50 percent. A cut in interest rates would favor stocks, but as the results of the meeting would not be known until late Wednesday, investors will probably hesitate to shift positions. Traders pointed to a big jump in Banco Real on Tuesday, whose preferred shares (SAO:REAL4) and common shares (SAO:REAL3) rose 32.7 percent and 44.2 percent respectively after Dutch bank ABN AMRO (AMS:AAH) said it would increase its stake in the Brazilian bank. The local unit of ABN AMRO offered to buy from shareholders up to 176 million Banco Real preferred shares for an investment of up to 245 million reais ($206 million). noriko.yamaguchi@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9565)	11/10/1998 5:32:00 PM
From: Steve Fancy	Respond to of 22640

Emerging debt slides, market awaits Brazil loan Reuters, Tuesday, November 10, 1998 at 16:50 NEW YORK, Nov 10 (Reuters) - Emerging debt sank Tuesday as investors continued biting their nails as they awaited a letter of intent spelling out an international multibillion-dollar bailout for Brazil, market sources said. The International Monetary Fund and other global lenders were expected to announce this week a loan package, estimated between $30 billion and $45 billion, to keep Latin America's biggest economy from falling into a financial abyss. Some investors had expected the letter to be released early this week. "People are disappointed that the Brazil situation is not being resolved faster," said Ronald Ratcliffe, chief Latin American economist at SG Cowen Securities Corp. "It appears the G-7 (Group of Seven leading industrial nations) has not decided which countries will contribute money to the Brazil package, and how much," said Felipe Garcia, Latin American Economist at I.D.E.A, an economic research firm. "But the wait will be worth it if it turns out the final package is larger." Benchmark Brazil C bonds <BRAZILC=RR> were down 3/4 to bid 64-1/4, Argentine PAR bonds <ARGPAR=RR> were down 1 to bid 70 and Mexico PAR paper <MEXPAR=RR> was down 3/4 to bid 75. On Wednesday, policy makers in Brazil are scheduled to meet to decide the level of local interest rates. Lower rates are seen as key to reducing the cost of Brazil's fiscal deficit, which stands at over seven percent of gross domestic product. Brazil's Central Bank hiked interest rates in mid-September to stem a mass exodus of dollars after a devaluation in Russia triggered fears Brazil might follow suit. "If interest rates are brought down Wednesday, it will be taken positively by the emerging debt market," one Wall Street analyst said. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9565)	11/10/1998 5:33:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Cardoso sees interest rate cut on Wed Reuters, Tuesday, November 10, 1998 at 16:59 BRASILIA, Nov 10 (Reuters) - Brazil President Fernando Henrique Cardoso expects the nation's key lending rate, the TBAN assistance rate, to fall on Wednesday from its current 49.75 percent per year, a presidential spokesman said on Tuesday. "President Fernando Henrique Cardoso expects that tomorrow, in a (Central Bank) meeting, the interest rates will fall," said spokesman Sergio Amaral at a press conference. The bank hiked interest rates in mid-September to stem a mass exodus of dollars after a devaluation in Russia triggered fears Brazil may follow suit. Economists on Tuesday predicted the TBAN could be lowered to anywhere between 33.50 percent and 49.25 percent per year at Wednesday's meeting. Market players in Brazil were expected to closely monitor the Central Bank meeting and a possible announcement by the International Monetary Fund on a multibillion-dollar loan package to rescue Latin America's biggest economy. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9565)	11/10/1998 5:34:00 PM
From: Steve Fancy	Respond to of 22640

IMF deal to ease Brazil's rate woes Reuters, Tuesday, November 10, 1998 at 17:17 By Joelle Diderich BRASILIA, Nov 10 (Reuters) - As officials put the finishing touches to an international loan deal, Brazil stood ready Tuesday to slash sky-high interest rates that have strangled local business and threaten to exacerbate a looming recession. The International Monetary Fund and other global lenders were expected to announce this week a loan package, estimated between $30 billion and $45 billion, to bring Latin America's biggest economy back from the edge of a financial abyss. Coming on the heels of a sweeping fiscal austerity package, the loan aims to restore investor confidence in the country's crisis-torn economy and shore up the local currency, the real. Industry leaders urged the Central Bank to snatch the moment to cut interest rates of 43 percent a year when its monetary policy committee meets Wednesday. The bank hiked interest rates in mid-September to stem a mass exodus of dollars after a devaluation in Russia triggered fears Brazil might follow suit. "Maintaining rates at current levels could jeopardize the fiscal adjustment," the National Industry Confederation (CNI), an independent business group, said in a statement. The Central Bank may lower its basic assistance rate, currently at an annualized 49.75 percent per year, but markets were paying closer attention to the benchmark overnight rate, which the bank sets daily through informal auctions. Economists said the bank could rapidly reduce the rate to between 35 percent and 40 percent from 42.75 percent Tuesday. Interest rates must drop fast to limit the depth of a recession forecast to hit the economy early next year. Economists predict activity will contract by 1 percent to 3 percent in 1999 as tax rises, spending cuts and other measures included in the fiscal plan slam the brakes on consumption. The government on Monday detailed sweeping spending cuts set to carve into the already tight budgets of vulnerable sectors like health, education and infrastructure. More pressingly, a rate cut would help check ballooning interest payments on debt, a key contributor to a nominal budget deficit of more than 7 percent of gross domestic product. A sizable chunk of the government's debt of roughly $300 billion is indexed to the overnight rate. "The fiscal effort could be entirely canceled by debt servicing costs, on the one hand, and by a drop in revenues, on the other hand, which will come about with the deepening of the recession," the CNI warned. Economists said conditions for a rate reduction this week were positive. Local shares have soared 25 percent in the last week on optimism about an IMF-led loan, while dollars are starting to trickle back into Brazil on expectations the amount of debt coming due in overseas markets would diminish in November. "Today, we think the situation is very different," said an economist at Banco Votorantim in Sao Paulo. "The doors are opening (for a rate reduction)." The government must deliver a cut generous enough to calm nervous industry leaders but modest enough to prevent Congress from relaxing the pace of voting on unpopular measures contained in the fiscal plan, said one economist. "The government is hostage to two things when deciding whether to lower rates: relieving pressure on the economy and the public deficit and pressuring Congress into voting," said Enrico Porta, fund manager at Banco Credibanco in Sao Paulo. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9565)	11/10/1998 5:41:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Revision, I bet they take it to 36-38. Sounds like IMF news may be timed to hit just after the interest rate news before the market opens Thursday. Or better yet, maybe it'll come out tomorrow yet...they seem to like to catch us off guard with these announcements for the most impact. I think tomorrow may end up to the upside. I hope the IMF plan for Brazil is conclusive. I sure thought I remembered a meeting scheduled by IAD on November 12 to consider some kind of Brazil loan. Serious TBR'rs won't want to miss the action Thursday/Friday/Monday/Tuesday. And don't forget UBB who oughta be on the same train. Who knows where we're gonna end up, but one things for sure, a bucket load of uncertainties will be resolved and the dust can start to further settle. sf