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

To: David Petty who wrote (11399)	1/11/1999 2:03:00 PM
From: Steve Fancy	Respond to of 22640

Well guys, looks like I may have found the source of my hard drive problems. Bought the soloman anti-virus software and it would appear some kind of virus is coming off of one of my kids computers. Kind of involved with this...if anyone runs across any significant news this afternoon please post as I won't be watching by the minute as I generally do. Thanks, sf

To: David Petty who wrote (11399)	1/11/1999 2:26:00 PM
From: Steve Fancy	Respond to of 22640

BRAZIL CONGRESS WEEK-Gov't faces vote amid feud Reuters, Monday, January 11, 1999 at 13:39 By William Schomberg BRASILIA, Jan 11 (Reuters) - Brazil's government will seek to reassure nervous foreign investors this week that fresh political uproar will not derail its anti-crisis austerity drive in Congress where a package of tax increases is on the agenda. With the country's political circles engrossed in the fallout from Minas Gerais state's announcement of a 90-day debt moratorium, government whips will go all out to keep lawmakers focused on fiscal issues, political analysts said. A joint session of the two houses of parliament was due to vote Wednesday on a presidential decree that spells out a number of higher taxes for businesses. The decree is the latest in a string of belt-tightening measures sent to Congress by the government in a bid to keep Brazil from plunging into Asia-style financial chaos. The decree requires only a simple majority for approval, usually a simple task for the government. But a victory is essential to the government's hopes of restoring its battered credibility with foreign investors. Chief among the decree's contents is an item that prevents companies from deducting spending on interest rates from their tax payments and which is expected to add 2 billion reais ($1.7 billion) to public coffers this year. The government, on the brink of a devastating currency crisis in November, agreed with the International Monetary Fund to cut or raise $23.5 billion this year to fully qualify for a $41.5 billion package of international rescue loans. Delays in approving a hefty increase in the CPMF financial transaction tax forced the Finance Ministry to announce an alternative "mini package" of higher corporate taxes in December. Brazilian financial markets took a pasting last week as investors feared Minas Gerais' moratorium might cause tensions with President Fernando Henrique Cardoso's volatile multi-party political alliance, and slow the fiscal measures in Congress. Minas Gerais governor Itamar Franco is a former Brazil president and a leading member of an anti-Cardoso faction within the powerful Brazilian Democratic Movement Party (PMDB), one of the biggest in the president's coalition. But Brasilia-watchers said Franco did not hold enough sway over the PMDB to turn the party against the government, noting how other senior figures within the PMDB had distanced themselves from Franco's dramatic move. They also said that so far, none of Brazil's 26 other influential state governors, including several from the left-wing opposition, had followed Minas Gerais into declaring a debt moratorium. "We do not see a spillover effect of the Minas Gerais debt moratorium in the fiscal adjustment votes in Congress," Citibank's emerging markets department said in a report issued late Friday. "We will continue to see difficulties in this process, but not due to Itamar Franco," the report said. Brasilia-based political consultant Santa Fe Ideias said the government would have to overcome differences within its alliance over a host of second-tier public sector appointments that are traditionally distributed to political allies at the start of a new government. Cardoso was sworn in for this second term Jan. 1. "Several fires will have to be put out for a peaceful vote to be held," Santa Fe said in a daily bulletin. The government is expected to have a harder time approving other measures in its fiscal package, including legislation spelling out the small print of a civil service reform bill approved last year and which allows for widespread dismissals within the public sector. The slow-moving bill increasing the CPMF financial transactions tax is due to be put to a second and final full vote in the Senate next week before moving to the more rebellious lower house in February. william.schomberg@reuters.com)) Copyright 1999, Reuters News Service

To: David Petty who wrote (11399)	1/11/1999 2:31:00 PM
From: Steve Fancy	Respond to of 22640

ADR REPORT - Brazilian ADRs undone by politics Reuters, Monday, January 11, 1999 at 13:05 By Daniel Bases NEW YORK, Jan 11 (Reuters) - Brazilian ADRs were sharply lower Monday on what has been described as "pathetic" trading volumes, amid concerns that the region could come undone because of slow progress hammering out its fiscal reform plan. "People are just very worried that in typical Brazilian fashion, they waited and may have passed the point of no return," said one senior Latin American ADR trader. Brazilian telecommunication ADRs - American Depository Receipts - were being hit the hardest, pressured by a steep decline in the local stock market. The Bovespa (INDEX:$BVSP.X), Brazil's benchmark stock index was down 6.44 percent at 1200 EST/1700 GMT. Telephone issue and bellwether gauge for the country and the region, Telebras (NYSE:TBH), was down 5 at 67-13/16. Wireless phone service provider, Tele Centro Sul Participacoes SA (NYSE:TCS) was down 4-1/4 at 39-1/4, while its peer, Telesp Participacoes SA (NYSE:TSP) was off 1-1/2 points at 19-3/16. "You've got interest rates at unsustainable levels given inflation, and you can't lower them without causing more capital flight. I can't see a way out," the trader said. The ING Barings Latin American index <.LAT> of leading area issues was down 4.47 points, or 3.81 percent at 112.91, indicating weakness throughout the region. Mexico's main stock market index, the IPC share index <.MXX> was off 1.95 percent; Argentina's Merval index <.MERV> was down 3.07 percent; Argentina's benchmark IPSA index <.IPSA> was off 2.53 percent. "The volumes in the region are pretty pathetic," said another ADR trader in New York. Brazil's fiscal austerity reform package was undermined when the Minas Gerais state, an industrial and mining center, located in the southeast, announced a 90-day debt moratorium. Both houses of the Brazilian parliament are expected to vote Wednesday in a joint session on a presidential decree that spells out a number of higher taxes for businesses. The decree is the latest in a string of belt-tightening measures sent to the Congress by the government in a bid to keep Brazil from plunging into an Asian-style financial crisis. In a broad look at ADR trading, the Bank of New York ADR index <.BKADR> was down 1.94 points, or 1.64 percent at 116.34. Copyright 1999, Reuters News Service