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

To: Telemarker who wrote (11457)	1/12/1999 3:04:00 PM
From: Steve Fancy	Read Replies (3) \| Respond to of 22640

Telemark...welcome. Thanks for the kind words...seems like I've been here forever. Seems the risk on selling UBB 10 puts @ 1.5 is pretty darn slim. All time low is around 7.5 if I memory serves...and this was during a brief period of herd mentality selling. Just doesn't seem that things are as bad as last fall. As Howard points out, could be trouble if much of the government debt is state related and they default, but as I stated earlier, seems we're pricing in Brazil ceasing to exist. Don't have any feel for how a devaluation might affect banks either, but seems max devaluation would be around 10%...at least on a first attempt. I personally don't think it'll happen. Worst case...I don't know that I'd even try that one, but I have to believe it couldn't be as bad as last year. In the telecom arena, a large portion of the Bovespa indes, we now have 12 underlying pieces to value rather than one. Many seem absurdly priced now to me. Revenues are practically guaranteed to grow. The stub...I'm holding. If I didn't already own it, don't know I'd get involved. Many seem to feel that it could be worth up to 1/2 when and if cashed out. There are some SEC documents at georgeson.com where you can review assets etc and try to form your own conclusions. Just search on TBR from their main menu. Would appreciate your thoughts on the above issues if you are so inclined. Sounds like you've been following long enough to understand this situation. Are you looking at TBH, selected babies, or just UBB? Maybe David or someone else can comment further. sf

To: Telemarker who wrote (11457)	1/12/1999 3:06:00 PM
From: Steve Fancy	Respond to of 22640

Brazil leftist parties declare support for Minas Reuters, Tuesday, January 12, 1999 at 14:34 BRASILIA, Jan 12 (Reuters) - Brazil's main left-wing opposition parties on Tuesday declared their support for the decision by the governor of Minas Gerais state to set a 90-day moratorium on debt payments to the central government. "We manifest our support for and solidarity with Governor Itamar Franco who, by decreeing a 90-day suspension of Minas Gerais state's debt and demanding a renegotiation with the Union, laid bare the fiscal reality of all Brazilian states," the parties said in a communique.

To: Telemarker who wrote (11457)	1/12/1999 3:11:00 PM
From: Steve Fancy	Read Replies (5) \| Respond to of 22640

Credit Suisse Asset's Sterling: Brazil Market Comment New York, Jan. 12 (Bloomberg) -- Credit Suisse Asset Management's Bill Sterling, global head of equities, comments on the outlook for Brazilian and other Latin American economies and stock markets. Credit Suisse Asset Management oversees about $142.3 billion worldwide, of which about $35.6 billion is managed from New York: ''When we look around the world, from a valuation perspective, whether it's price-to-book value or price-to-cash- flow, Latin America looks to be among the cheapest regions of the word, if not the cheapest region.'' ''That said, it does look as if Brazil is going to experience a recession this year that will bring GDP down anywhere from 2 to 4 percent.'' ''The big question is whether they can experience all that pain without eventually having to let the currency slip, perhaps substantially. Whether that means accelerating the rate of decline of the adjustable peg of the real, or eventually having an outright devaluation is anyone's guess.'' ''There are increasing concerns about whether fiscal reforms that are part of the IMF medicine for Brazil will be able to be carried through, given the fact that one prominent state in Brazil has imposed a debt moratorium and is not paying the federal government back its debts.'' ''So we think the risk profile in Latin America still remains quite high. From a three- to five-year perspective, this may actually be a very good time to be looking at Latin markets in general, but looking out over the next couple of quarters, we certainly think the possibility to provide tremendous volatility is there.'' ''In addition, a fair amount depends on the Fed. If, as we believe, the Fed is likely to go into a passive mode for a number of months -- we don't expect it's going to cut rates again this quarter -- that's not helpful for emerging markets in general, but especially ones that are under great stress, which is the case for Latin America at the moment.'' ''We are minimally exposed in our global equity funds to Latin America, but we are keeping our eyes open for a buying opportunity. If a devaluation were to occur that would be a time to re-assess the situation.'' -------------------------------------------------------------------------------- © Copyright 1998, Bloomberg L.P. All Rights Reserved. latinvestor.com