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

To: Steve Fancy who wrote (9687)	11/14/1998 4:43:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

TEXT-IMF statement on Brazil program Reuters, Friday, November 13, 1998 at 15:53 WASHINGTON, Nov 13 (Reuters) - Following is the full text of the International Monetary Fund's statement on its $41 billion-plus financial program for Brazil announced on Friday: Camdessus welcomes conclusion of talks on Brazil's program Michel Camdessus, managing director of the International Monetary Fund (IMF), said today that he was pleased to announce that "the Brazilian authorities and an IMF team have successfully concluded negotiations on a strong three-year program of economic and financial reform. Brazil's program first and foremost addresses the chief source of its external vulnerability, namely its chronic public sector deficit, which the country is now tackling in a serious and sustainable manner. "The program combines a large up-front fiscal adjustment of over three percent of GDP with reforms of social security, public administration, public expenditure management, tax policy and revenue sharing, that will confront head-on the structural weaknesses that lie at the root of the public sector's financial difficulties. Within this framework of structural reforms, Brazil's three-year fiscal program targets primary surpluses of 2.6 percent of GDP in 1999, 2.8 percent in 2000 and three percent in 2001. The Brazilian authorities are also committed to further opening up the economy, ensuring firm monetary discipline and macroeconomic stability, and maintaining the current exchange rate regime. "The way is now open for the international community to provide financial support to Brazil that will enhance market confidence in the government's economic policies and help ensure the success of the country's program. Official creditors, multilateral and bilateral, will provide support totaling more than US $41 billion over the next three years, roughly US $37 billion of which is available, if needed, in the next 12 months. I believe that the soundness of Brazil's program and the authorities' commitment to it, together with the strong support demonstrated by the official international community, provide the conditions for Brazil's private creditors now to act to help ensure its success. "I will be asking the IMF's Executive Board to support the program with a three-year stand-by arrangement, augmented in the first year by the Supplemental Reserve Facility, for a total amount of SDR 13.0 billion, equivalent to about U.S. $18 billion. Around 70 percent of these funds will be under the SRF, thus ensuring the early availability of a very significant sum. "Mr. (James) Wolfensohn, president of the World Bank, has assured me of his readiness to recommend to his Board provision of up to $4.5 billion in support of Brazil's program. Similarly, Mr. (Enrique) Iglesias, president of the Inter-American Development Bank (IDB), recommend to his Board an IDB support package of US $4.5 billion. "Brazil's program will also receive strong support from a large number of industrial countries in North America, Europe and Asia, whose governments or central banks will provide through the Bank for International Settlements (BIS) additional financing totaling approximately U.S. $14.5 billion. "The recent passage by the Brazilian Congress of the social security reform law is a significant and long-awaited achievement. Together with the recent submission to the Congress of a revised budget for 1999, in which every effort has been made to spare basic social programs from the expenditure cuts that fiscal discipline requires, this reassures me that Brazil will implement the rest of its program rigorously. And in turn, the success of Brazil's efforts will greatly brighten the economic prospects of the region as a whole," Camdessus said. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 4:45:00 PM
From: Steve Fancy	Respond to of 22640

Chronology of events leading to Brazil-IMF deal Reuters, Friday, November 13, 1998 at 16:34 BRASILIA, Nov 13 (Reuters) - Here is a chronology of events leading up to Friday's announcement by the International Monetary Fund of a $41 billion-plus package for Brazil to help Latin America's largest economy survive global financial turmoil: ------ JULY 1997 - Thailand devalues its baht currency, marking the effective start of a major financial crisis in Asia that also undermines investor confidence in Latin America. AUGUST 1997 - Thailand is thrown a lifeline by the International Monetary Fund in the form of a $17 billion rescue package. OCTOBER 1997 - Brazilian markets are battered as Asia's crisis deepens, threatening the country's inflation-slashing Real Plan introduced in 1994. Brazil raises interest rates to 42 percent to stop dollars leaving the country and ward off a devaluation. OCT. 31, 1997 - IMF announces rescue package for Indonesia of around $42 billion which failed to restore confidence in the country. NOVEMBER 1997 - Brazil promises $18 billion in tax increases and spending cuts to ease investor concerns about its budget deficit. But most of the cuts are not implemented. DEC. 4, 1997 - IMF approves $21 billion loan for South Korea as part of a $58 billion bailout package. Within weeks the fund pledges to rush forward $10 billion in loans to stop near-default in South Korean banking system. JULY 20, 1998 - The IMF approved an $11.2 billion loan for Russia as part of a $22.4 billion package from international lenders. AUG. 17, 1998 - Russia devalues the rouble and halts foreign debt payments, sending world financial markets into chaos. Brazilian share and debt prices slump and dollars start pouring out of the country. SEPT. 11 - Brazil resorts to another interest rate hike to nearly 50 percent a year in a desperate bid to check dollar outflows of more than $2 billion a day. SEPT. 15 - As more dollars flow out of the country and foreign currency reserves tumble, Brazil announces it is talking with the IMF. OCT. 4 - Cardoso is reelected Brazilian president, having pledged austerity measures to save the economy. OCT. 20 - Brazil and the IMF agree on spending targets for the next three years to bring Brazil's budget deficit until control. OCT. 28 - Brazil unveils a plan to save $84 billion by 2001 through tax increases, budget cuts and other measures. The plan paves the way for an international credit plan led by the IMF. NOV. 4 - The lower house of Congress finally approves a long-delayed social security reform bill, a key part of the austerity plan. Shares rise on hopes the government will get the rest of the plan through Congress and dollar outflows slow. NOV. 13 - The IMF, the World Bank, the Inter-American Development Bank and leading industrial nations announce a package for Brazil worth more than $41 billion to prevent an Asia-style financial meltdown. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 4:48:00 PM
From: Steve Fancy	Respond to of 22640

IMF deal seen boosting Brazil debt if reforms pass Reuters, Friday, November 13, 1998 at 16:45 By Hugh Bronstein NEW YORK, Nov 13 (Reuters) - Long-term prospects for Brazilian debt improved with Friday's $41 billion international loan agreement, though prices will probably slide between now and March while Brazil strives for economic reform, U.S. fund managers said. Terms of the loan agreement include tax hikes and spending cuts sure to be politically difficult in the upcoming recession that many analysts predict for Latin America's bellwether economy. "Longer term, the debt of Brazil and other emerging markets is a good value. But in the near term, my view is neutral because the market has moved so fast to price in a lot of positive news from Brazil, which may turn out to be premature," said Mike Conelius, manager of the T. Rowe Price Emerging Markets Fund. "Short term, there's no reason to say emerging market bonds are a great buy," said Hillel Waxman, first vice president for foreign currency and security sales at Bank Leumi U.S.A. "Longer term, it's a buy with caution." Gains in emerging debt prices of about one point early Friday morning were erased by midday after the International Monetary Fund (IMF) announced the loan package, aimed in part at restoring investor confidence. The IMF said $37 billion of the package would be available to Brazil over the next 12 months if needed. With news from the IMF behind it, the market focused on President Fernando Henrique Cardoso's ability to steer his austerity program through Brazil's unpredictable Congress. His effort may be complicated by an investigation into allegations of financial impropriety by Cardoso himself, analysts said. Cardoso on Friday lamented allegations that he stashed millions in a secret Caribbean bank account. He said the charges were "grossly" false and could hurt Brazil's credibility. "It is a pity (that these charges occurred) in the moment Brazil is fighting, and that I am personally fighting, to defend our currency," Cardoso told reporters in Rio de Janeiro on Friday. "Brazil needs credibility." Against this political backdrop, T. Rowe Price's Conelius cautioned investors not to expect fast action on tax hikes and spending cuts, which are politically unpopular in the best of times. "We've lost November waiting for the IMF deal. We're going to lose December because the austerity measures are not going to get passed in time," Conelius said. "Then there will be a change in Congress, so the new members are going to have to find out how much their constituents are willing to support higher taxes," he added. The Christmas holiday in December and Carnival in February also promise to slow progress, Conelius said. "We're talking three or four months before the laws get passed." Bank Leumi's Waxman said the market was "quasi-focused" on the questions about Cardoso. If this nascent scandal sidetracks Congress from its austerity program, Waxman said, the IMF may stop its payments, which could cause selling of debt, not only in Brazil but all emerging markets. "We'll probably see a slightly weaker market Monday because we'll have the weekend for rumors to circulate as to whether this is a real scandal (involving Cardoso) or nonsense," Waxman said. "If something slightly negative happens, it will cause a very rapid correction in the risk tolerance that the market readopted in the last three weeks," he added. Any legislative watering down of Cardoso's austerity measures will hit emerging bond prices hard, said Martin Schubert, chairman of the European Inter-American Finance Corp. He agreed the allegations against Cardoso are a potential problem. "Somebody has obviously been trying to blacken his name," Schubert said. "It's probably going to turn out to be nonsense, but the market is looking at it." Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 5:00:00 PM
From: Steve Fancy	Respond to of 22640

ANALYSIS-Brazil proves doomsayers wrong, for now Reuters, Friday, November 13, 1998 at 19:21 By John Miller SAO PAULO, Nov 13 (Reuters) - Brazil's $41 billion international aid package will ease fears of an imminent collapse of Latin America's top economy, but analysts say the spendthrift nation's day of reckoning may be at hand. While Brazil appears to have been spared a punishing currency devaluation -- forecast by doomsayers since 1995 -- economists say the country's 160 million people are still in for a rough ride. The loan package, led by the International Monetary Fund, should protect Brazil's real from devaluation by providing emergency credit lines to discourage currency speculators. It will also force Brazil to tame its gluttonous spending habits that have run up a $60 billion budget deficit. But the package's bitter medicine, requiring tough cuts in social services and coming on top of consumer interest rates of 100 percent, will hurl this $800 billion economy into recession next year. Up to now, the strong real has been popular among many working-class Brazilians, whose purchasing power has soared under four years of low inflation and a stable currency. President Fernando Henrique Cardoso was re-elected in October largely because of his commitment to defending the real, which has brought inflation down to 1 percent from nearly 3,000 percent when Cardoso was first elected in 1994. But economists say popular sentiment for Cardoso and his strong currency could sour quickly as unemployment lines grow next year. "In a few months, the focus will be shifting to soaring unemployment, recession and growing discontent," said a chief economist at a U.S. bank in Brazil who asked not to be named. "People will be asking is it worth it? Is it worth keeping interest rates high and throwing the economy into recession to avoid devaluation?" he said. For many Brazilians, the reality of the dire times ahead has not yet set in. But signs of a slowdown are already clear. Tens of thousands of blue-collar workers have lost their jobs, taking official unemployment to near double digits. Brazil's auto industry, the world's fifth largest, has been hit especially hard as the sector braces for a prolonged slump. The layoffs are spreading to white collar professions like the financial sector and the media. Even English-speaking college graduates are thankful to be taking $550-a-month jobs at a newly privatized long-distance telephone company. Brazil's troubles began in mid-August, when Russia devalued the rouble and halted payments on its foreign debt. Investors lost faith in emerging markets worldwide, pulling a whopping $30 billion out of Brazil in just two months. The capital flight pushed Brazil, the world's eighth largest economy, to the brink of devaluation and sent shivers throughout Latin America, where Brazil accounts for 45 percent of the region's economic output. Brazil's peril also unsettled nerves in the industrial world, which feared that a crisis in Latin America on par with Asia and Russia could lead to a marked global slowdown. Over the past three years Brazil has demonstrated a talent for squeezing through difficult times -- like the Mexican peso crisis in 1994 and the Asian crisis of 1997 -- each time preserving its controversial economic policy. Some Brazilian policy-makers even gloated after these touch-and-go episodes, proud at having once again proven wrong the "experts" that long criticized Brazil's economic strategy. But analysts say that this time around, Cardoso's government is keenly aware the days of muddling through with interest rate hikes and broken promises about slashing spending are over. "The Cardoso government always thought it was a bit smarter than the financial markets and thought it could outwit them," said Riordan Roett, director of Latin American Studies at The Johns Hopkins University. "But the events of 1998 have caught up with them and I think the contagion has scared them a lot more than they thought," Roett said. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 5:06:00 PM
From: Steve Fancy	Respond to of 22640

Latam relieved by Brazil IMF plan Reuters, Friday, November 13, 1998 at 20:20 By Axel Bugge BUENOS AIRES, Nov 13 (Reuters) - Latin America sighed with relief on Friday after an IMF-led loan package was announced for regional powerhouse Brazil, hoping it will dispel fears that country's economy will implode and drag others with it. Brazil's economic woes have been uppermost in Latin American leaders' minds over the last two months for fear it would be forced into a crippling currency devaluation that could spell economic mayhem for the entire region. The announcement of the International Monetary Fund-led $41-billion-plus program was another important step in Brazil's, and thereby the region's, recovery from the brink of an economic abyss, analysts said. "This will help the region as a whole," said Roberto Lavagna, an economist at Ecolatina, a financial consultancy in Buenos Aires. In the period before Friday's announcement, IMF and other key financial officials indicated a line had been drawn to prevent an emerging market whirlwind from spreading to Latin America after leaving Asia and Russia staggered in its wake. Brazil's rescue package was the center piece in that plan. "The success of Brazil's efforts will greatly brighten the economic prospects for the region as a whole," IMF Managing Director Michel Camdessus said on Friday. "Mexico will benefit from a perception of lower Latin American risk and it will help the (Mexican) peso strengthen and lower its volatility," said Francisco Chavez, an economist at the Interacciones brokerage in Mexico. Since Russia's currency devaluation and debt default in August, governments across Latin America have scrambled to cut budget deficits and raise rates to soothe investors nervous that the crisis would spread to Latin America. A Brazilian devaluation could have sparked a Latin American currency crisis like Asia's last year and thrown the entire region into recession. Two countries, Colombia and Ecuador, have already been forced to devalue their currencies. While a substantial loan package has been anticipated for nearly two months, regional analysts greeted the announcement as a calming development. "The amount (of the package) was known, but the fact that it has been announced and put together is calming because it eliminates uncertainty," said Valentin Carril, head of research at Santander Investment in Chile. "It is a very important and positive development because you have a very sizable package and you now have confirmation of it," said Gustavo Canonero, head of research for Mercosur at Deutsche Bank Global Markets Research, in Buenos Aires. But economists were still loath to call the all-clear despite the IMF plan, Brazil's pledge to save $84 billion over the next three years to restore fiscal health and sky-high interest rates to support the real currency. The Brazilian government's $84 billion in savings, through a mixture of tax hikes and spending cuts, has led most economists to predict a recession in Brazil next year which would drag regional growth lower. Argentine exporters in particular, who send a third of their goods to Brazil, are shivering at the prospect of depressed Brazilian markets. Most of all, economists said, Brazil's economy will not be safe until its Congress approves the $84 billion in savings. Until that approval is given, it could still prove difficult for Brazil to lower interest rates of nearly 50 percent, which have to be maintained at those levels to attract funds into the local currency but add billions to government debt payments. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 5:08:00 PM
From: Steve Fancy	Respond to of 22640

BRAZIL IMF DEAL - How much money will Brazil use? Reuters, Friday, November 13, 1998 at 21:56 By Mary Milliken SAO PAULO, Nov 13 (Reuters) - Brazil may employ only a quarter or half of the $41 billion loan package granted Friday by the International Monetary Fund and leading industrial nations, economists said. The fact that the world's financial powerhouses are ready to loan to Brazil may be enough to help the country restore the credibility needed to borrow again on international markets and cover its external payments, they said. "It removes the fear of devaluation and the fear that they are not going to meet their obligations," said Peter West, chief Latin American economist for BBV Securities in London. Brazil's external financing requirements for 1999 amount to an estimated $50-60 billion, $25-30 billion of which is the current-account deficit and another $25-30 billion in medium and long-term external debt payments. Brazil can offset that with some $18 billion in foreign direct investment,$20 billion in financing for imports, and $3.5 billion in portfolio investment, according to economists' estimates. That leaves between $10-18 billion in external payments to be covered with the IMF-led loan. "The level of external financing is fairly comfortable as long as there is not a new wave of global financial turmoil," said Mauro Schneider, chief economist at ING Bank in Sao Paulo. If Brazil manages to restore investor confidence in the economy with the IMF accord and the parallel three-year fiscal austerity package, economists say foreign investment could increase enough to cover nearly all Brazil's financing requirements. The IMF is also confident that the amount of the package more than covers any foreseen pressure on Brazil's reserves and that no formal rollover of Brazilian debt is required. "The international community is providing a very large, sufficiently front-loaded package," IMF first deputy managing director Stanley Fisher told a news conference Friday. Finance Minister Pedro Malan was more guarded than the economists, saying only that he hoped Brazil would not need to use all of the $41 billion at the country's disposal for the next three years. Brazil will get in the next few weeks the first injection of $9 billion, which is likely to go straight into the country's foreign reserves, now at $42.6 billion. The economists were unsure when Brazil would be able to tap international debt markets again, both for sovereign and corporate issues. Brazil last issued sovereign debt in March 1998 and had only a two-month window to borrow abroad after the dust from the Asian crisis had settled. Credit lines for Brazilian exporters may be the first to sprout after coming to a virtual halt last month. "Credit for export has more collateral and is easier to re-establish," said Jaime Alves Neto, economist at Banco Patente. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 5:10:00 PM
From: Steve Fancy	Respond to of 22640

IMF deal gives Brazil a last chance for reform-CNI Reuters, Friday, November 13, 1998 at 22:16 BRASILIA, Nov 13 (Reuters) - A $41 billion-plus credit package announced by the International Monetary Fund Friday gives Brazil a last chance to finally approve long-delayed reforms, the head of the country's biggest industry group said. "We cannot miss this opportunity," said Fernando Bezerra, president of the National Industry Confederation (CNI). "It is unique; there will be no second chance." The IMF package, which includes $14.5 billion from leading industrial nations, represented "an unmistakable show of faith and support from the international financial community regarding the direction of Brazil's economy," Bezerra said in a statement. But the lenders would expect Brazil to urgently approve structural reforms which were proposed in 1995 but have yet to be put into effect, the industry boss said. Brazil's unruly Congress has to approve the small print of constitutional reforms of the civil service and the social security system which is set for a $35 billion deficit this year. Another reform to simplify the country's complicated tax system has yet to begin its long passage through parliament where much of the government's recently announced austerity plan also requires approval. The reforms and the austerity plan are seen as the only way Brazil can aggressively cut interest rates of nearly 40 percent that add to debt costs and aggravate the country's wide budget deficit, the fundamental problem of the economy. The budget deficit is currently more than 7 percent of gross domestic product. Finance Minister Pedro Malan said Friday the government aimed to cut the shortfall to 4.7 percent of GDP by the end of next year. william.schomberg@reuters.com)) Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 5:11:00 PM
From: Steve Fancy	Respond to of 22640

U.S. turns to controversial fund to back Brazil Reuters, Friday, November 13, 1998 at 23:08 By Glenn Somerville WASHINGTON, Nov 13 (Reuters) - The Clinton administration again is turning to a fairly obscure 1930s-era fund to offer backup aid, this time for Brazil's wobbling economy, in a tactic that has proven a red flag for Congress in the past. Treasury Secretary Robert Rubin on Friday said the United States will provide up to $5 billion of $14.5 billion in bilateral aid that 20 countries have pledged to support a larger package arranged by the International Monetary Fund and other lending institutions. The U.S. contribution will come from the Treasury's Exchange Stabilization Fund, a multi-billion-dollar pot of money that falls wholly within the jurisdiction of the Treasury secretary, subject only to presidential approval. Congressional critics say the fund, set up in 1934 to protect the dollar from big swings in value, was never intended for the uses Treasury has put it to as a source for funds to bail Mexico out of a financial crisis in 1995 and as a back-up for later rescues of South Korea and Indonesia. What particularly irks Congress, in its traditional role as holder of the government's purse strings, is that Treasury can tap the fund without getting lawmakers' approval. The administration beat back a Congressional bid this summer to sharply restrict its ability to use ESF resources for international rescues, but those objections are likely to arise again. Rubin and Deputy Treasury Secretary Lawrence Summers acknowledged as much, speaking to reporters at the White House, by saying they had talked to several Congressmen in advance to rally support for their Brazil effort. With Congress adjourned, Rubin conceded only a limited number of lawmakers were available. But he added: "Look, all of us have been very focused on the financial crisis for the past year and a half and I think that people have had a chance to think through the interdependence of the global economy, the stakes for our own economic well-being, of dealing with contagion, and I think all of that has informed the way people are reacting to this." Summers said the pledge of U.S. aid was fully justified. "Just to be clear, the ... statutes setting up the Exchange Stabilization Fund authorizes its use to provide a guarantee in this way on the authority of the Treasury Secretary acting with the President's support," Summers said. On March 31, the last date for which figures are available, the fund held assets of $39.43 billion, primarily in dollars invested in Treasury bills and in foreign currencies including marks and yen and in Special Drawing Rights, the quasi-currency used by the IMF. The money given to Mexico from the ESF was repaid, with interest, and in the case of Indonesia and South Korea it served as a second line of defense and no funds were drawn. Analysts say the fund gives the Clinton administration flexibility to show leadership in emergency situations like the financial crisis that began in Asia in mid-1997. It adds credibility to U.S. efforts to rally support for its trading partners and to contain spreading economic woes, as in the case of Brazil. "The broad idea of it is to achieve stability so if the fund can't be used for purposes like this then I don't see what it should be used for," said Robert Dederick, economic consultant to Northern Trust Co. in Chicago. There was a vote of confidence from one corner of Congress, as outgoing Speaker Newt Gingrich issued a statement saying he was "very supportive of the relief plan for Brazil outlined today," though he did not specifically mention the ESF. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9687)	11/14/1998 5:13:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Listing Of Brazilian Telecom Spinoffs May Confuse Some Investors Dow Jones Online News, Friday, November 13, 1998 at 19:06 By Margarita Palatnik, Staff Reporter NEW YORK -(Dow Jones)- The planned New York listing on Monday of 12 Brazilian telecommunications companies spun off from Telecomunicacoes Brasileiras SA still has some investors bewildered. Some holders of Telebras American depositary receipts (TBR) are still unsure what they'll own after Monday. The Bank of New York, the depositary agent for Telebras, Friday said that the 12 companies will begin trading Monday on a "when issued" basis. TBR will go ex-spinoffs on Nov. 18, the day after the distribution, but will continue to trade until the company is liquidated. Another source of confusion is the distribution itself. Telebras won't distribute odd lots, or fractional ADRs, which will instead be cashed out. In the conversion schedule, only three companies are on a one-to-one ratio with TBR, while the remaining eight are converted on a fractional basis. For example, an investor holding one Telebras ADR would get one ADR of Embratel Participacoes SA (EMT), but would receive cash instead of the 0.02 ADRs due of Tele Leste Celular Participacoes SA (TBE). Telebras options will be settled with ADRs of the new spinoffs, the Options Clearing Corporation said Friday. OCC vice president John Peplinski said that the deliverables for a Telebras option will include 12 new ADRs, plus the TBR stub and a small cash settlement in lieu of a fractional ADR. Investors who don't want a dozen ADRs have two options: HOLDRs (TBH) are a basket security that represents ADRs of Telebras. RTBs are another ADR instrument that represents a Telebras basket security traded locally. Fund managers consulted Friday welcomed the NYSE listing, which comes almost two months after the 12 telecoms started trading on the Sao Paulo stock exchange. BEA Associates fund manager Guillermo MacLean said the New York trading would deepen the market in the individual companies. He added that HOLDRs are still "extremely attractive." Robert Salvy, who manages about $2 billion in Latin American assets for Shroder Capital Management International agreed. "We'll be able to choose the fastest growing of the receipts," Salvy said. "And it should mean greater liquidity." Deutsche Bank Securities advised its clients to swap Telebras ADRs for a basket security until liquidity transfers to the individual stocks. Based on the experience in Brazil, Deutsche Bank strategist Jane Heap said, the transfer will be gradual. Heap said that holding the HOLDRs or RTBs could avert potential increases in transaction costs. She noted that derivatives available for HOLDRs may not be available for all individual companies. The Chicago Board Options Exchange said Wednesday it would list options on the six most liquid spinoffs on Nov. 18. Telebras was privatized July 29 into 12 different companies. The new firms started trading in Brazil on Sept. 21. Brazil's privatization of the 12 operating units of Telebras was the largest such sale in Latin American history. Prices in the July auction topped the government's minimum price of $11.51 billion by 64%. MCI Communications Corp., Telefonica S.A. of Spain, and Portugal Telecom S.A. came up big winners in the sale of controlling stakes in units spun off from Telebras. -By Margarita Palatnik; 201-938-2226; margarita.palatnik@cor.dowjones.com Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.