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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (2667)	1/21/1999 1:31:00 PM
From: Tom	Respond to of 2951

Thai candidate clear front-runner in race to elect new WTO chief. GENEVA -- The Thai deputy prime minister has emerged as the front-runner by a wide margin in the latest poll in the race to elect a new chief for the World Trade Organization. During a session here Wednesday, Swiss Ambassador William Rossier, who has been appointed to oversee the selection process, advised members the latest results based on his latest consultations from Jan. 13-16, senior trade diplomats said. In his report, he outlined that WTO members' first choice for WTO chief broke out as follows: 40 had stated support for Thailand's Supachai Panitchpakdi, 23 for former Moroccan Trade Minister Hassan Abouyoub, 15 for the former Canadian Trade Minister Roy MacLaren, and 13 for the former New Zealand Prime Minister Mike Moore.

To: Tom who wrote (2667)	1/22/1999 9:34:00 AM
From: WONG	Read Replies (1) \| Respond to of 2951

The vicious cycle has begun.... Real fallout hits Spain Spanish companies suffer from exposure to Brazil and the tumbling real January 22, 1999: 9:19 a.m. ET MADRID (Reuters) - Shares in Spanish companies heavily invested in Latin America fell sharply Friday amid heightened concerns Brazil's ailing economy could infect the rest of the region and hit company earnings, dealers said. Losses extended as Brazil's beleaguered real hit a fresh low versus the dollar. The real hit a new low of 1.72 against the dollar when it opened for trading in Brazil Friday morning. It subsequently recovered to 1.64 on central bank intervention, but fresh selling saw it subsequently slip back to 1.72 again. In Madrid, selling centered on the Spanish banking sector in particular, after recent outperformance based on merger activity and ahead of 1998 results from the country's two biggest banks, Santander and Banco Bilbao Vizcaya. Each has $2-$3 billion invested in the region and their earnings, due in the next 10 days, may show further evidence of weakness from their Latin American units, analysts said. A lack of investment fund activity in the market added further volatility to trade, dealers said. After the real weakened further at BBV fell 5.6 percent to 12.47 euros and Santander fell 5.5 percent to 15.73. The Ibex 35 blue-chip index was down 4 percent at 9506.3, but off its lows. Companies with substantial Latin American interests account for at least 40 percent of the Ibex's weighting. Brazil's real has fallen more than 30 percent against the dollar in the last week. Investors worry that could have a knock-on effect through other emerging economies, forcing devaluations as Brazilian exports become more competitive. Its neighbors are especially vulnerable, particularly Argentina. An increasingly likely recession in Latin America's largest economy could also chop regional economic growth. "I have the impression that there were some people who thought Brazil's problems were over. This isn't something which can be resolved from one day to another, and people fear that Brazil's problems will have a domino effect," said a dealer at a Spanish bank. One analyst explained that banks were hit by a devaluation from several sides. "With a devaluation, the value of your assets and liabilities in pesetas falls and net interest income falls...but the medium-term consequence is a rise in interest rates to try to control inflation, and this causes recession," she said. "Thus loan defaults increase and banks' provisions have to increase, denting earnings contributions from those subsidiaries," she said. However she believed the market's response to Brazil was exaggerated, as it discounted higher rates of loan default than were feasible. She added that at present, BBV and Santander's exposure to Latin America is about equal, but the merger between Santander and BCH will mean that as a percentage of total assets, the new bank's exposure is lower. Telefonica, the dominant telecom operator in Latin America, also fell, dropping. 4.6 percent to 39.30 euros. The telephony provider has around $10 billion invested in Latin America, accounting for around one quarter of group earnings. However, analysts say Telefonica is more protected from Latin American fallout as much of its profit growth stems from robust expansion in mobile telephony at home. "I'd say Telefonica is one of the clearest investment opportunities on the bourse. Latin America will affect its earnings, but the mobile arm is driving it at present," said a dealer. "Unlike banks, Telefonica does not have to bear the brunt of possible trading losses and loan defaults," he added.