Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: lebo who wrote (9730)	11/16/1998 4:28:00 PM
From: Steve Fancy	Respond to of 22640

Brazil minister denies favoritism in Telebras sale Reuters, Monday, November 16, 1998 at 11:07 BRASILIA, Nov 16 (Reuters) - Brazil's communications minister on Monday denied charges in the media that the government favored certain investors in the privatization of telecommunications holding Telebras (SAO:RCTB40) last July. "In order to stop any doubts from hovering over the legitimacy of the Telebras sale, the communications minister is voluntarily at the disposal of Congress to make clarifications where needed," Minister Luiz Carlos Mendonca de Barros said in a statement. The weekly magazine Veja last weekend published excerpts of a transcript of illegally taped conversations between Mendonca de Barros and Andre Lara Resende, president of the privatization coordinator National Development Bank (BNDES), before the Telebras auction. The magazine said the tapes "make clear the intentions of Mendonca de Barros and Andre Lara to help Opportunity, a Rio de Janeiro investment bank." Veja said Mendonca de Barros and Lara Resende discussed ways to weaken the bidding position of Telemar, a consortium of Brazilian companies, so Opportunity could have a better shot at winning the Tele Norte Leste fixed line company. However, Telemar ended up winning the Tele Norte Leste auction with a premium of 1 percent over the minimum bid price. Opportunity could not bid for Telemar in the end because it had won a stake in the previous auction of another fixed-line company, Tele Centro Sul. Mendonca de Barros said the Veja article "induces the reader to consider illegitimate" his work and that of the BNDES on the eve of the Telebras sale by reproducing only part of the conversations. "The dialogues divulged by Veja represent only a partial reconstruction of the phone calls taped at the BNDES and do not include contacts with other consortia interested in the auction which would prove no wrongdoing by the BNDES," the statement said. Veja said it pulled the excerpts from two 90-minute tapes government security officials turned over to the police for the criminal investigation into the phone tapping at the BNDES. It was not clear who tapped the phones. Copyright 1998, Reuters News Service

To: lebo who wrote (9730)	11/16/1998 4:30:00 PM
From: Steve Fancy	Respond to of 22640

Brazil min won't resign over taped phone calls Reuters, Monday, November 16, 1998 at 11:43 Asked if he would resign over the allegations which surfaced over the weekend in Brazilian magazine Veja, Mendonca de Barra said, "Of course not." He suggested that the allegations, which came from illegally obtained wiretaps, were aimed at damaging him and the reformist government of President Fernando Henrique Cardoso. Spin-offs from Brazil's Telebras (SAO:TELB4)(SAO:RCTB40) began trade on the New York Stock Exchange Monday, marking the break-up of the giant telephone company. Copyright 1998, Reuters News Service

To: lebo who wrote (9730)	11/16/1998 4:31:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Fin Min Malan in NY to discuss IMF package Reuters, Monday, November 16, 1998 at 12:17 NEW YORK, Nov 16 (Reuters) - Brazil Finance Minister Pedro Malan is meeting with a host of bankers and investors on a two-day visit to New York to discuss its $41 billion IMF-led agreement. He is being received at a luncheon meeting for a small group of bankers organized by the Institute for International Finance on Monday. That meeting will be chaired by Citibank Vice-Chairman William Rhodes. Tuesday, Malan will meet with investors and other market participants at 10 a.m./1500 GMT at the Waldorf-Astoria Hotel where he will discuss Brazil's recent agreement with the International Monetary Fund. He will hold a press conference at 12:30 p.m./1730 GMT and meet with a group of Wall Street analysts at 3 p.m./2000 GMT, an official at the Consulate of Brazil confirmed. He leaves New York for Europe late Tuesday. The Finance Minister is on an international trip to explain the country's agreement with the IMF in the hope of convincing capital markets that Brazil's economic agenda remains on track. Brazil, Latin America's largest economy, faced a financial crisis earlier this summer after it lost about $30 billion in foreign exchange reserves. Copyright 1998, Reuters News Service

To: lebo who wrote (9730)	11/16/1998 4:33:00 PM
From: Steve Fancy	Respond to of 22640

BNDES's Borges defends role in Telebras sale - RTV Reuters, Monday, November 16, 1998 at 14:24 NEW YORK, Nov 16 (Reuters) - Brazil National Development Bank (BNDES) Vice President Jose Pio Borges defended the bank's role in the privatization of Brazilian telephone company Telebras (NYSE:TBR)(SAO:RCTB40), saying all proper procedures had been followed. In an interview with Reuters Television, Borges said he was confident "that we have not done anything wrong." Earlier on Monday, Brazilian Communications Minister Luiz Carlos Mendonca de Barros said he would not resign over media allegations that he showed favoritism in the $19 billion privatization of the phone company. The commmunications minister and Borges were in New York for the launch of the 12 Telebras spin-offs as American Depository Receipts. Copyright 1998, Reuters News Service

To: lebo who wrote (9730)	11/16/1998 4:34:00 PM
From: Steve Fancy	Respond to of 22640

(UPDATE) Companies Spun Off From Brazil's Telebras Started Trading On NYSE Dow Jones Online News, Monday, November 16, 1998 at 14:44 NEW YORK -(Dow Jones)- American depositary receipts of 12 companies spun off from Brazil's former telecommunications monopoly Telecomunicacoes Brasileiras SA, or Telebras, began trading on the New York Stock Exchange Monday. Among the companies, ADRs of fixed wireline company Telesp Participacoes SA (TSP) opened at $27.75, while Telesp Celular (TCP) ADRs started trading at $21.375. Fixed-wireline company Tele Centro Sul Participacoes SA (TCS) opened at $46; Tele Norte Leste (TNE) ADRs debuted on the Big Board at $14; and long distance carrier Embratel Participacoes SA (EMT) started at $16.50. Cellular firm Tele Sudeste Celular (TSD), meanwhile, began trading at $22. The ADRs are trading on a "when-issued" basis, until their distribution, scheduled for Tuesday. Telebras (TBR) will trade ex-spinoffs starting Wednesday. Meanwhile, top government officials denied a magazine report that said Communications Minister Luiz Carlos Mendonca de Barros and Andra Lara Resende, president of the government-owned National Development Bank, tried to influence the outcome of the auction. The distribution of ADRs has been a source of confusion for many investors. 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, 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 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 welcomed the NYSE listing, which comes almost two months after the separate telecom companies started trading on the Sao Paulo stock exchange. BEA Associates fund manager Guillermo MacLean Friday 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." 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. and Portugal Telecom S.A. came up big winners in the sale of controlling stakes in units spun off from Telebras. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: lebo who wrote (9730)	11/16/1998 4:41:00 PM
From: Steve Fancy	Respond to of 22640

Brazil forex mkts lost about $150 mln Reuters, Monday, November 16, 1998 at 15:11 In the floating market, the real finished unchanged at 1.1980 to the dollar, while it strengthened 0.65 percent against the U.S. currency to 1.24 in the parallel market. Copyright 1998, Reuters News Service

To: lebo who wrote (9730)	11/16/1998 4:43:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil shares end up 5 pct after overseas gains Reuters, Monday, November 16, 1998 at 16:08 SAO PAULO, Nov 16 (Reuters) - Brazilian stocks rose more than 5 percent to close at their session highs on Monday, as overnight gains on Asian and European bourses and optimism inspired by Brazil's IMF accord lifted local share prices. The blue-chip Bovespa index (INDEX:$BVSP.X) finished 5.11 percent higher at 8,004 points in a late rally that pushed Telebras preferred receipts (SAO:RCTB40), the market's benchmark, up 6.61 percent to 101.70 reais. "The fact that Telebras finished above 100 reais, its psychological barrier, is an important sign," said a trader at Corretora Doria & Atherino, a Brazilian brokerage. Investors started picking up relatively cheap Brazilian blue-chips after the IMF deal was announced on Friday. The International Monetary Fund and other lenders had agreed to provide Brazil with a $41.5 billion package to shore up its economy, traders said. As of Monday's close, the Bovespa was still down 21 percent so far this year. The session also marked the first day of trading in New York for companies that were spun off from Telebras, Brazil's former telephone holding. The American Depositary Receipts showed solid gains on the New York Stock Exchange, which gave a further boost to Sao Paulo's Bovespa. The ADRs of Telesp Participacoes (NYSE:TSP_.W) -- one of analysts' favorites -- rose to 28-7/16 in late trading from an opening quote of 27-3/4. Among other key issues in Brazil, Petrobras preferred (SAO:PETR4) added 5.2 percent to 184 reais, while Eletrobras preferred (SAO:ELET3) gained 6.5 percent to 30.90 reais. Traders said shares were expected to extend their rally this week. Volume, reported at a moderate 494 million reais ($415 million) on Monday, is expected to rise as foreign investors pour fresh money into the market. noriko.yamaguchi@reuters.com)) Copyright 1998, Reuters News Service

To: lebo who wrote (9730)	11/16/1998 5:17:00 PM
From: Steve Fancy	Respond to of 22640

Bank Of NY To Sponsor ADR Programs For Former Telebras Cos. Dow Jones Newswires NEW YORK -- Bank of New York Co. (BK) will sponsor the listing and trading on the New York Stock Exchange of the American depositary receipts for the 12 new holding companies resulting from the privatization and break-up of Telecomunicacoes Brasileiras S.A. (Telebras), the former holding company for Brazil's state-owned phone system. In a press release Monday, Bank of New York said the holding companies were established on May 22 and the controlling interest of the Brazilian government in each was sold July 29. Each of the 12 separate public companies will trade on the NYSE as follows: Telesp Participacoes S.A. as "TSP"; Tele Norte Leste Participacoes S.A. under the symbol "TNE"; Tele Centro Sul Participacoes S.A. under "TCS"; Embratel Participacoes S.A. as "EMT"; Telesp Celular Participacoes S.A. under "TCP"; Tele Sudeste Celular Participacoes S.A. as "TSD"; Telemig Celular Participacoes S.A. "TMB"; Tele Celular Sul Participacoes S.A. "TSU"; Tele Centro Oeste Celular Participacoes S.A. "TRO"; Tele Nordeste Celular Participacoes S.A. "TND"; Tele Leste Celular Participacoes S.A. "TBE" and Tele Norte Celular Participacoes S.A. under the symbol 'TCN." Continuing to trade, after its original listing on July 28 is the Telebras Unit ADR (TBH), which represents ownership in all 12 holdings through a single instrument. The Telebras Unit ADR currently has a market capitalization of more than $4 billion, with average daily ADR dollar trading volume of about $100 million. Bank of New York has acted as depositary for Telebras since 1992 when a Level-I ADR program was established. In 1995, Telebras upgraded its ADR program to a Level-II program and listed on the NYSE. In 1997, Telebras was the most actively traded ADR on the New York Stock Exchange, with a market capitalization exceeding $9 billion. Bank of New York offers banking and other financial services.

To: lebo who wrote (9730)	11/16/1998 5:18:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Central Bk Cuts Overnight Rate To 38.5% From 39% Dow Jones Newswires SAO PAULO -- In the first sign that Brazil's government will gradually trim interest rates, the central bank on Monday lowered its overnight borrowing rate on the interbank market to 38.5% from 39%. The move marks the start of what some analysts expect will be regular interventions by the monetary authority on the overnight market to cut rates daily by 50 basis points. Last Wednesday, the central bank cut its ceiling Tban lending rate to 42.25% from 49.75%. The following day, it set the lending rate on the overnight market at 39%, which was more conservative than the 35%-37% that many banks had projected on Wednesday. Analysts said there was good reason for the cautious approach from the government last week, noting that it was more prudent to cuts rates slowly than to run the risk of having to hike rates sharply again. The central bank's monetary policy committee had more than doubled rates to 49.75% in September to halt an investor exodus that reached alarming proportions following Russia's default and devaluation in mid-August. With capital outflows slowing in November and investors receiving a spate of good news about Brazil, analysts say that rates should continue falling. "There are good reasons now to expect that the government will keep lowering rates," said Odair Abate, head economist at Lloyds Bank in Sao Paulo. "We can't say that Brazil is completely out of crisis, but the moment of panic has subsided significantly." Abate cited last Friday's long-awaited release of a $41.5 billion international credit line for Brazil and optimism about the government's fiscal austerity plans - a necessary precursor to the aid package - as the primary reasons the market is expecting rate cuts. "Of course, it all depends on what happens with the voting on (tax increases proposed in) the fiscal plan and the new budget, but we're expecting year-end rates to be between 24% and 25%," Abate said. The government is scheduled on Tuesday to introduce a constitutional amendment in Congress to nearly double the CPMF financial transactions tax. The CPMF, which is charged on all banking transactions, is one of the most controversial measures in the fiscal plan. Congress also needs to approve the revised 1999 budget, which includes cuts of 8.7 billion reals (BRR) ($1=BRR1.19), from an earlier budget proposal, before the end of the year. The central bank's Monetary Policy Committee, or Copom, next meets on Dec. 16 to set interest rates for the following six weeks. If the monetary authority continues trimming its overnight rate 50 basis points each working day, as some analysts expect, rates will be at 27.5% when the Copom meets again. -By Stephen Wisnefski; (55-11) 813-1988; swisnefski@ap.org

To: lebo who wrote (9730)	11/16/1998 5:19:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Telesp Celular Sees Over 3M Subscribers By End '99 Dow Jones Newswires NEW YORK -- Cellular telecommunications company Telesp Celular Participacoes SA (TCP), which listed Monday on the New York Stock Exchange, projects to double its customer base by the end of 1999 to more than 3 million subscribers, an executive told Dow Jones Newswires on Monday. "We now have 1.6 million subscribers," said Jose Roque de Pinho, president of Telesp Celular Participacoes. "We expect to double that by the end of 1999." De Pinho declined to estimate the investment needed to reach its subscriber goals. In the company's earnings statement released Thursday, Telesp said that during the first nine months ended Sept. 30, it spent 572 million reals (BRR) ($1=BRR1.19) and that it expects the capital expenditure figure to reach BRR900 million by year end. De Pinho, who spoke after a news conference held for the initial trading of the 12 Telebras spinoff American depositary receipts on the New York Stock Exchange, said that Monday is a big day for the company. "Not only are we listing here (at NYSE), but also we're launching our digital CDMA (Code Division Multiple Access) network," he said. Telesp Celular has contracted with manufacturers Motorola Inc. (MOT), Lucent Technologies (LU) and NEC Corp. (NIPNY) to provide equipment for its network expansion, de Pinho said. At 1935 GMT, the company's ADRs were trading at $21 5/8, up 2/8 from their initial price. TCP said that for the nine months ended Sept. 30, its net profit was BRR258 million. TCP is the holding that controls Telesp Celular SA (E.TCL), which serves the rich and populous state of Sao Paulo, and was recently privatized as a spinoff of Telecomunicacoes Brasileiras SA (TBR, TBH). TCP is controlled by Portugal Telecom (PT). -By Margarita Palatnik; 201-938-2226; margarita.palatnik@cor.dowjones.com

To: lebo who wrote (9730)	11/16/1998 5:24:00 PM
From: Steve Fancy	Respond to of 22640

Tele Sudeste Celular posts R$ 127.4m profit by Sept. São Paulo, 16 - Tele Sudeste Celular Participações -- the former state-owned cellular telecom, privatized last July 29, (see also Telebrás) posted a net profit of R$ 127.4m in the year to September. The company's net earnings stood at R$ 632.982m, while its financial expenditures totaled R$ 11.982m. In the first nine months of 1998, Tele Sudeste's operational result finished at R$ 249.241m. (By Simone Azevedo)

To: lebo who wrote (9730)	11/16/1998 5:25:00 PM
From: Steve Fancy	Read Replies (9) \| Respond to of 22640

WSJ: President Cardoso to gain new political 'momentum' São Paulo, 16 - The US-based newspaper, The Wall Street Journal, wrote today that market participants were hoping that President Fernando Henrique Cardoso, recently elected to a second term, "can transfer the momentum from the international agreement to the domestic political front". According to the Wall Street Journal, it is not as yet clear whether the international community's US$41.5bn rescue plan for Brazil will succeed or fail to calm financial markets. "Investors will ultimately judge the plan on its ability to force down Brazilian interest rates, strengthen the national currency and boost the country's stock of foreign exchange." Domestic market's immediate reaction, the newspaper wrote, showed global financial markets relieved but not overwhelmed. "The market's ambivalent reaction reflects Brazil's lingering credibility problem, exacerbated by the failure to fully implement last year's budget-deficit reduction plan." For the newspaper, the country's fragmented Congress must still ratify fiscal measures in the new package, which are linked to the IMF-led aid, "and many investors may stay on the sidelines until they see the cuts in place." However, Treasury Secretary Robert Rubin said, it was confident in the success of the financial rescue package for Brazil. "This should do it," he said. "Not only is Brazil in and of itself very important, but adverse developments in Brazil could affect other parts of Latin America." In another story, the newspaper went further saying that Brazil's "belt-tightening" austerity package, according to a congressional report released Sunday, "will drastically affect several government social programs." The study, the newspaper says, shows that the most affected programs include "low-income housing, agrarian reform and projects to alleviate the drought-stricken northeast and increase the minimum wage." The story also pointed out that about 25 million of Brazil's 160 million inhabitants live in extreme poverty. (By Fabio Pagotto, Cynthia Decloedt and Paulo R. Monteiro Dias)