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


To: md1derful who wrote (11638)1/14/1999 10:39:00 AM
From: Steve Fancy  Read Replies (12) | Respond to of 22640
 
Brazil on path to meet IMF fiscal targets -Cenbank

Reuters, Thursday, January 14, 1999 at 08:57

BRASILIA, Jan 14 (Reuters) - Brazil is on its right to path
to meet fiscal deficit targets set out by the International
Monetary Fund (IMF) in 1998, a senior Central Bank official
said Thursday.
"We are on the path to complete the annual target agreed
with the IMF," Altamir Lopes, head of the economics department
at the Central Bank told reporters.
Brazil agreed with the IMF to keep its budget deficit for
1998 as a whole to 72.9 billion reais as part of an accord to
access an IMF-led $41.5 billion international loan.
On Thursday, the Central Bank reported the country's
nominal budget deficit widened to 56.247 billion reais, or 7.45
percent of gross domestic product between January and October.
The deficit, also known as the public sector borrowing
requirement, covers local, state and federal government
expenditures and is one of the key indicators of Brazil's
fiscal health.
Economists on Thursday predicted Brazil may have narrowly
met IMF's fiscal targets last year.

Copyright 1999, Reuters News Service




To: md1derful who wrote (11638)1/14/1999 10:41:00 AM
From: Steve Fancy  Respond to of 22640
 
Brazil shares surge on foreign markets, local calm

Reuters, Thursday, January 14, 1999 at 09:03

SAO PAULO, Jan 14 (Reuters) - Brazil's Bovespa index of
leading shares surged up nearly 4 percent in early trade
Thursday spurred by rallies in foreign markets and a local
sense that the worst of the crisis had passed, traders said.
Sao Paulo's Bovespa (INDEX:$BVSP.X) index was 3.87 percent higher
at 5,834 points at 1320 local/1520 GMT after losing 5.1 percent
Wednesday on fears of mammoth dollar outflows following a
currency devaluation of more than 8 percent.
Brazil's foreign exchange markets lost a relatively mild
$1.1 billion in net outflow on Wednesday compared to the $3-4
billion that had been feared could exit amid global panic about
Brazil's economic crisis.
Traders said Brazilian share prices would probably seesaw
in the short term as the market waited for the government's
next move to overcome the current crisis which was set off when
the state of Minas Gerais declared a debt moratorium last week.
Heavy dollar outflows in the wake of that move led to the
devaluation and the resignation of Central Bank president
Gustavo Franco, who had strongly advocated keeping the currency
strong at all costs.
"Things are calmer, but this does not mean we're going to
see it holding through the end of the day," one local trader
said. He said foreign investors were still probably pulling out
of the market although there had been a lot of local buying.
tracey.ober@reuters.com))

Copyright 1999, Reuters News Service




To: md1derful who wrote (11638)1/14/1999 10:47:00 AM
From: Steve Fancy  Respond to of 22640
 
All: I think this previous article "Brazil Shares Surge..." is just a small taste of what's to come when investors become even semi-convinced the worst is over. May get a little worse before it gets better, but when it turns, it'll turn on a dime hard and fast IMO. I believe chances are very good it will happen before the end of February...dependent on Congressional votes, IMF stance and the resulting outflows. In the meantime I am staying hedged with TBH puts. As I do whatever with the Jan puts tomorrow, I will get into FEB puts...will not chance the "fear of darkness" over the long weekend. Brazil probably trades Monday as US is closed for Martin Luther King day. These types of days with bad news looming, or lingering in Brazil tend to be down days.

However, with all the negativity in the air since yesterday morning, TBH has held up well IMO. I suspect downside from here is limited...perhaps 50, perhaps last years lows (around 46), but I don't think much worse. No way to tell how much market propping the Brazilian government may be doing, but there does seem to be plenty of buying interest at these levels. Maybe revenue producing companies can't go to zero...even in Brazil.

sf



To: md1derful who wrote (11638)1/14/1999 10:53:00 AM
From: Steve Fancy  Respond to of 22640
 
G7 does not plan statement on Brazil -- Germany

Reuters, Thursday, January 14, 1999 at 08:57

BONN, Jan 14 (Reuters) - The Group of Seven rich nations
does not plan to issue a joint statement in response to Brazil's
decision on Wednesday effectively to devalue its real currency,
the German Finance Ministry said on Thursday.
"The G7 does not plan at the moment to issue a statement on
Brazil," Finance Ministry spokesman Torsten Albig told Reuters.
Germany currently holds the chair of the group.
G7 officials had consulted on Wednesday after Brazil's
central bank widened out its tight trading bands for the real
against the U.S. dollar, amounting to an effective devaluation
of nearly eight percent.
World stock markets took a hit following the de facto
devaluation, but recovered on Thursday. Investors were still
nervously watching to see whether more capital would be pulled
out of Brazil following the flight of $1.5 billion on Wednesday.
A leader of Germany's ruling Social Democrats said the
economic difficulties in Asia, Russia and now Latin America
meant governments in Europe had to work together to stave off a
slowdown.
"The world economic crisis is getting Germany and Europe
into rough waters, and our economic policies must put a clear
emphasis on growth," SPD deputy parliamentary leader Ernst
Schwanhold said in a statement.
bonn.newsroom@reuters.com))

Copyright 1999, Reuters News Service




To: md1derful who wrote (11638)1/14/1999 10:57:00 AM
From: Steve Fancy  Respond to of 22640
 




As Brazil Tries to Compete Globally Illiteracy Remains a Major Obstacle
Associated Press

RIBEIRAO PIRES, Brazil -- Rosalvo Amaral's job prospects usually died when he showed his identity card. In place of his signature was a word he couldn't understand: illiterate.

Francois Courtes, a French-born industrialist, needed skilled workers to improve quality at his strongbox factory in this Sao Paulo suburb. He was alarmed to learn nine of his 46 employees couldn't read or write.

Their common need brought them together. Today, Mr. Amaral is among 20 adults studying their ABCs at a course in Mr. Courtes's factory.

As Brazil painfully emerges from decades of market protections to compete in the global economy, illiteracy remains a major obstacle. Two-thirds of the work force -- nearly 50 million Brazilians -- dropped out before finishing high school.

The Sao Paulo Trade Federation says Brazilian workers spend on average less than four years in school, compared to 11 years in South Korea, nearly nine in Argentina and 7 1/2 in Chile. Poor education often means poorer quality for Brazilian goods, and a smaller chance for companies to compete in world markets.

As those markets shrink in a global economic crisis, Brazilians are learning that only the best will survive. And an unlikely alliance of unions and big business has emerged to try to improve labor and product.

In Ribeirao Pires and other industrial suburbs ringing Sao Paulo, South America's biggest city, hundreds of adults are enrolled in literacy classes offered by factories and private businesses.

The project was proposed by the powerful Union of Metal Workers -- and signaled an about-face in the confrontational tactics long used by labor. Union leader Luiz Marinho knows both approaches. Twenty years ago, at age 15, he fought at street barricades in labor protests. Today he sits down with business executives, politicians and bankers, discussing ways to improve the quality of life.

"We now look at the entire society," Mr. Marinho said. "We look for comprehensive solutions to the most pressing problems, from reinforcing river banks to building clinics."

One result of cooperation is a dramatic decrease in strikes. Last year, there were just four strikes in Sao Paulo's industrial belt, compared with 850 in 1978. Better education also is an essential part of the cooperative atmosphere.

"We have to make the region attractive to private investments," Mr. Marinho said. "They will choose places with good road networks, with good public utilities, where levels of education are high."

For unions, the bottom line is jobs. Unemployment has soared since 1994, as Brazil wrestled inflation down from 50% a month to under 4% a year. Officially, the jobless rate is 8.2%, the worst in 15 years. But unions say the rate is really around 20%.

Everyone agrees it will get worse. After local financial markets tumbled and foreign investors pulled back from Brazil in August, the government ratcheted interest rates up to nearly 50% and promised to cut spending. After Wednesday's currency devaluation, the prognosis for Latin America's biggest economy is stagnant growth or recession.

The auto industry, a big employer, has felt the pinch. After production last year hit a record two million vehicles, sales have slumped. In September, the local plants of Ford Motor Co. and General Motors Corp. announced they will idle thousands of workers.

For industry, the goal of the literacy classes is to raise quality and competitiveness. Mr. Courtes, the factory owner, saw his plans to obtain a quality certificate for his plant stymied by uneducated employees. "Some workers couldn't read the instructions or fill out forms," he said.

He has high hopes for the literacy campaign, which gives students the equivalent of a fourth-grade education. Already he notes benefits.

"People feel better and happier," Mr. Courtes said. "This helps a lot in the production process."

Evandro Salero, manager at the Irmaos Correia bus company, also noticed a dramatic change in his workers after he started a literacy program.

"In just weeks they were more confident and spoke up their minds articulately," he said. "Look at them now. They want to continue; they want to go further."

Mr. Amaral, the student at Mr. Courtes's plant, is hoping to get a leg up in the job competition.

"Maybe I'll be ready to learn a profession," he said. "At least, things may change and I will find a stable job again."

But already, his world is changing.

"I didn't know how good it feels to see those letters and discover they form meanings," he said.





To: md1derful who wrote (11638)1/14/1999 11:03:00 AM
From: Steve Fancy  Respond to of 22640
 
Brazilian Bk Ratings Cut; Outlooks Negative: S&P
Dow Jones Newswires

LONDON -- Standard & Poor's said Thursday it has lowered to B+ from BB- its foreign currency counterparty credit rating on Banco Nacional de Desenvolvimento Economico e Social and its rating on the bank's $3.2 billion of long-term foreign currency senior unsecured debt.

S&P also said it lowered to BB- from BB+ the long-term local currency counterparty credit rating on the bank.

Additionally, S&P has lowered to B+ from BB- its foreign currency counterparty credit rating on Banco do Nordeste do Brasil SA, and its rating on the bank's $348 million of long-term foreign currency senior unsecured debt.

It has also lowered to BB- from BB+ its local currency counterparty credit rating on BNB. The rating outlooks also remain negative, the agency said.



To: md1derful who wrote (11638)1/14/1999 11:33:00 AM
From: Steve Fancy  Read Replies (1) | Respond to of 22640
 
DOC (SNOW), it's official. It has snowed here every day since Dec 16 ending yesterday. Measurements at local airport...33''. Some local areas (such as my driveway) received as much as another foot due to inexact nature of lake-effect snow. Also some areas (such as my driveway) were victims of continued blowing and drifting...all the snow from the vast field behind our house blew into my drive.

sf