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

To: David Petty who wrote (11468)	1/12/1999 2:13:00 PM
From: Steve Fancy	Respond to of 22640

Tough to say David, but I would guess that there are far fewer larger players in TBH these days. I suspect many have already branched into selected babies. I'll be a huge buyer if and as these things approach "0". This selling is ridiculous, devaluation or not. We seem to be pricing in Brazil falling off the face of the earth. sf

To: David Petty who wrote (11468)	1/12/1999 2:20:00 PM
From: Steve Fancy	Respond to of 22640

Boy I'm a brave soul<g>. Order in for a measly 5 TSP APR 20C at 2. FWIW, 17.5's are out there...DW for April and GW for July. sf

To: David Petty who wrote (11468)	1/12/1999 2:24:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shrs plunge 8.9 pct, near circuit-breaker Reuters, Tuesday, January 12, 1999 at 13:05 SAO PAULO, Jan 12 (Reuters) - Brazilian shares plunged 8.9 percent in afternoon trade Tuesday as concerns over Minas Gerais state's debt moratorium sparked dollar flight and pushed shares close to the circuit-breaker cut-off, traders said. Sao Paulo's key Bovespa index (INDEX:$BVSP.X) slumped to 5,835 points. Trade on the Bovespa is halted if the index falls 10 percent before the last half hour of the session. "Stocks are down on continued strong dollar outflows," a trader at Opportunity brokerage in Rio de Janeiro said. He said that Minas Gerais' decision to halt payments on its debt to the central government has made international debt markets skittish, forcing companies to pay off maturing foreign issues instead of rolling them over. "Nobody seems to be doing anything about this situation," he said. More than $1 billion has fled Brazil through foreign exchange markets this month. Copyright 1999, Reuters News Service

To: David Petty who wrote (11468)	1/12/1999 2:26:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Ceara state rules out joint debt talks Reuters, Tuesday, January 12, 1999 at 13:05 SAO LUIS, Brazil, Jan 12 (Reuters) - The governor of Brazil's Ceara state ruled out the possibility of joint debt renegotiations with the other states and the federal government, saying Tuesday that financially troubled states would have to go it alone. Ceara governor Tasso Jereissati, a senior member of President Fernando Henrique Cardoso's PSDB political party, was speaking to reporters before a meeting of 18 state governors allied to Cardoso's government. The meeting comes in the wake of a debt moratorium declared by Brazil's third richest state of Minas Gerais, which set off market panic on concerns that other states would follow suit and push the country deep into economic trouble. Copyright 1999, Reuters News Service

To: David Petty who wrote (11468)	1/12/1999 2:28:00 PM
From: Steve Fancy	Respond to of 22640

ADR REPORT - Brazil political row pressures Latam Reuters, Tuesday, January 12, 1999 at 13:26 By Daniel Bases NEW YORK, Jan 12 (Reuters) - Capital flight from Brazil is raising investor concerns that the country is stumbling towards a currency devaluation, thus sucking confidence and money out of ADRs of Latin American companies traded in New York. Investors are fleeing as Brazil's fiscal austerity plan has been sidetracked by a a political skirmish between the central government and its former president, now governor of the southeast mining and industrial state, Minas Gerais, Itamar Franco. Franco said last week he would cease to make payments for three months on the $13.4 billion the state owes the federal government. Brazil's central government says it will honor all of its debts. That has proved little comfort to investors, who drove the Bovespa (INDEX:$BVSP.X), Brazil's benchmark stock index down by more than 8 percent on Tuesday after the index lost 5.58 percent on Monday. The benchmark telephone issue, Telebras (NYSE:TBH) was off 5-3/16 at 63-7/8 in New York Trading. The ING Barings Latin American ADR index <.LAT> was down 4.91 points or 4.33 percent at 108.37. "You've got people worried that there will be a potential currency devaluation. I mean we expected daily outflows (capital) to slow with the new year, but no so. Yesterday, $187 million left the country," said a senior LatAm ADR trader in New York, indicating the pace was not slowing. "Brazil's development bank was seen intervening in the currency markets and perhaps ready to do something with stocks, but I haven't seen anything there," the trader said, requesting that he remain anonymous. Traders noted that Brazil's problems become regional because it is the leading market in the area. Leading Mexican telephone issues, Telefonos de Mexico (NYSE:TMX) was off 1-6/16 at 44-1/16. "If Brazil doesn't get its fiscal house in order and they don't start collecting the taxes, regardless of the Minas Gerais problems, they stand to lose the IMF money," and that's got investors concerned, said Val Kosmider, vp. of trading at Handelsbanken in New York. Overall, ADRs are being pulled lower by weakness in the U.S. markets. The Dow Jones Industrial Average, undercut by weakness in technology issues after a week of tremendous gains was down 119 points or 1-1/4 percent at 9501 at 1243 EST/1743 GMT. In a broader look at ADR trading, the Bank of New York ADR index <.BKADR> was off 1.58 points or 1.36 percent at 114.98. European ADRs were also sucked into the U.S. stock downdraft. Automakers, DaimlerChrysler AG (NYSE:DCX) was off 1-11/16 at 103-15/16; Volvo AB (NASDAQ:VOLVY) was down 1-9/16 at 26-13/16. "Across the board, the European ADRs are getting hit with some profit taking after a very good run," said a European ADR trader in New York who requested anonymity. Copyright 1999, Reuters News Service

To: David Petty who wrote (11468)	1/12/1999 2:33:00 PM
From: Steve Fancy	Respond to of 22640

I'd sure like to see TBH at the high for the day by 3:00. TSP hit 16 13/16 today...unbelievable. sf

To: David Petty who wrote (11468)	1/12/1999 2:40:00 PM
From: Steve Fancy	Respond to of 22640

razil Cardoso: States Must Adjust Accounts, Not Complain Dow Jones Newswires RIO DE JANEIRO -- With concern running high that a brewing political battle between Brazilian states and the federal government will spiral out of control, President Fernando Henrique Cardoso said Tuesday that the country will honor all its foreign debt obligations. "The market can rest assured," Cardoso said at the opening of a Globo newspaper printing press here. "We know what we will do, we know what we are doing, we will pay all our debts." News last week that the state of Minas Gerais, Brazil's third wealthiest, had declared a 90-day moratorium on debt payments to the federal government sent markets reeling and raised concerns that other states would follow suit. Referring to the move by Minas Gerais, Cardoso said that "not paying debts is a thing of the past," noting that previous failures to honor commitments mired Brazil in stagnation in the past. When questioned about state debt financing problems, Cardoso said that "states have no reason to complain," pointing out that the federal government provides favorable lending rates. "States with problems are now paying between 10% and 13% of revenues to pay off debts," Cardoso said, adding that "the remaining 87% or 90% has to be used wisely." Regarding Minas Gerais specifically, the president said "the government has done everything, reducing the debt by nearly 2 billion reals (BRR)($1=BRR1.20)." Cardoso insisted that states must put their own financial houses in order. He said that excess payroll expenditures and the social security system weigh most heavily on state accounts. Minas Gerais owes the federal government nearly BRR15 billion, with about BRR80 million coming due in January. The President reaffirmed the government's commitment to reducing "very high" interest rates. The prime lending rate currently stands at 29% per year. Cardoso said last week that the government hoped to reduce rates but that it couldn't until fiscal measures currently before Congress were approved. Following market rumors last week that Finance Minister Pedro Malan was set to step down, Cardoso said Tuesday that "Malan is essential for Brazil." The rumor surfaced last Friday following media reports that a candidate not supported by Malan would be nominated for the presidency of the National Savings Bank, or CEF. Malan, for his part, categorically denied talk of an impending resignation, the Estado news agency reported. -By Jamie McGeever; (5521) 580-9394

To: David Petty who wrote (11468)	1/12/1999 2:42:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Federal Govt, Goias State Reach Debt Payment Accord Dow Jones Newswires SAO PAULO -- The Brazilian government and the state of Goias have reached an accord to ensure that the state's federal debt obligations can be met, the Goias governor's office said in a written statement Tuesday. Goias, a medium-sized state in central Brazil, will relinquish its 13 million-real (BRR)($1=BRR1.20) share of a federal fund in January to help compensate for BRR17 million in debt not paid in December. The BRR4 million remaining will be accounted for through the withholding of another federal revenue allocation the state is due to receive, the statement said. The agreement was reached Monday during a meeting between Goias Governor Marconi Perillo and Brazilian Finance Minister Pedro Malan. The Goias governor, who took office Jan. 1 and is a member of President Fernando Henrique Cardoso's Social Democratic Party (PSDB), was in Brasilia to discuss the transfer of the state-run bank to the federal government, the statement said. The news from Goias comes nearly a week after Minas Gerais, Brazil's third-wealthiest state, announced a 90-day moratorium on debt payments to the federal government. The decision generated panic among investors and raised the specter that other states might follow suit. On Monday, Brazil's southern-most state of Rio Grande do Sul said that its federal debt of BRR800 million in 1999 is "unpayable." The government has steadfastly denied it will renegotiate debt agreements signed with states. In a first concrete action against Minas Gerais, the government Monday suspended the distribution of federal funding totaling BRR11.7 million in January. In an effort to calm investor fears, President Cardoso said Tuesday that Brazil will honor all foreign debt commitments. He added that states are in no position to complain about debt obligations, saying that irresponsible spending has put states in a difficult position. -By Stephen Wisnefski; (55-11) 813-1988; swisnefski@ap.org

To: David Petty who wrote (11468)	1/12/1999 2:45:00 PM
From: Steve Fancy	Respond to of 22640

GM Picks Up Market Share In Brazil In '98, Despite Crisis By ADRIANA ARAI Dow Jones Newswires SAO PAULO -- A quick glance at Brazil's 1998 vehicle sales figures produces no surprises: Volkswagen AG, as usual, led auto sales in South America's largest economy. Granted, the German giant had to forfeit its leadership position in passenger cars to Italy's Fiat SpA for a few months in early 1998 - but Volkswagen had faced a similar threat in 1997. A second look at the data, however, shows that General Motors Corp was the big revelation in 1998. "GM was the only car manufacturer that was able to grow its market share under extremely unfavorable consumer demand conditions," said A.T.Kerney vice-president in Brazil Rogerio Aun. All the other big three car makers in Brazil - Volkswagen, Fiat, and Ford Motor Co - couldn't make it through last year's financial turmoil unscathed. Not that GM had it easy; according to figures released Monday, sales of its passenger cars and light commercial vehicles dropped 16% last year over 1997. During the same period, Volkswagen's tumbled 27%, Fiat's 28%, and Ford's 31%. As a result, GM's share in the passenger car and light commercial vehicle market expanded 1.8 percentage points to just over 24%. Volkswagen's market share contracted 1.9 points, Fiat lost 2.2 points, and Ford fell 1.6. (See chart below) In 1998, sales of cars, trucks, and buses in Brazil shrank 21% from the year before to 1.5 million, chiefly due to sky-high interest rates the government has adopted since October 1997 in a bid to stem massive capital outflows. The explanation for GM's success, according to analysts consulted by Dow Jones Newswires, is straightforward: the company offers the most complete and technologically advanced product line. And, most importantly, GM hit the bull's eye with the Vectra, its medium-sized model launched at end-1996, and seems to have done just as well with its new Astra model late last year. "The battle to consolidate image and market share focuses on the medium-size segment," said Aun. "That's why all the newcomers (Toyota, Renault, Honda, Chrysler, among others) are debuting in the Brazilian market with medium-size models." As the big four car manufacturers brace for fierce competition as of 1999, analysts say GM is better prepared to hold on to its market share. The following is a list of the market share of each of Brazil's largest car makers: MARKET SHARE - PASSENGER CARS/LIGHT COMMERCIAL VEHICLES 95 96 97 98 Volkswagen 37.1% 36.4% 31.9% 30.0% Fiat 27.0% 27.9% 28.1% 25.9% General Motors 22.4% 23.9% 22.4% 24.2% Ford 12.1% 10.9% 14.7% 13.1% Source: Anfavea, ATKerney analysis. -By Adriana Arai; (5511) 813-1988; aarai@ap.org