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

To: Tony van Werkhooven who wrote (12259)	1/22/1999 1:00:00 PM
From: Steve Fancy	Respond to of 22640

Brazil cenbank says will not use capital controls Reuters, Friday, January 22, 1999 at 12:43 BRASILIA, Jan 22 (Reuters) - Brazilian Central Bank president Francisco Lopes said on Friday that the Central Bank will not implement capital controls. Asked by reporters if he planned to impose capital controls, Lopes said "not under any hypothesis." Governments adopt capital controls to limit the outflow of hard currency amid times of crisis. More than $300 million a day has been flowing out of Brazil's foreign exchange markets since the Central Bank let the currency float freely against the dollar last week. The Central Bank hiked its key bank lending rate to 41 percent on Tuesday in a bid to make it more difficult for banks to borrow money to buy dollars against the real, but the measure failed to stem the flows. Some economists and stock traders have speculated that the Central Bank could be forced to impose capital controls to help resolve the nation's worst economic crisis in two decades. Copyright 1999, Reuters News Service

To: Tony van Werkhooven who wrote (12259)	1/22/1999 1:08:00 PM
From: Steve Fancy	Respond to of 22640

ADR REPORT - Brazilian currency woes hit ADRs Reuters, Friday, January 22, 1999 at 12:52 By Daniel Bases NEW YORK, Jan 22 (Reuters) - Concerns over Brazil's weakening currency, highlighted by Brasilia's decision to intervene in the exchange markets to defend the real, is weighing down on Latin American ADRs. "I think it is very tricky for the Brazilians to try and establish a support for the currency in the wake of a devaluation," said one ADR trader who requested anonymity. The ING Barings Latin American ADR index <.LAT> was down 0.81 points or 0.77 percent at 104.37 Persistent capital flight is expected to result in even deeper currency devaluation, traders in Brazil said. The Central Bank was seen selling dollars in the foreign exchange markets via federal Banco do Brasil, the first time it has intervened since the real was floated one week ago "This is making the markets nervous and I stick with the outlook that inflation and earnings will be negatively impacted. Nothing's changed," the trader added. Brazil's bellwether, telephone issue Telebras (NYSE:TBH), has come off its earlier lows, now trading down 1-1/16 at 62-3/16. Brazil's Bovespa (INDEX:$BVSP.X) index was off 2 percent. The Central Bank said Friday it would not implement capital controls on its markets. While forecasts for a steepening downturn in Brazil's economy and weakening currency are expected to result in lower earnings, one analyst who covers the cellular telecommunications sector of the Latin American market sees value. "On a fundamental basis, cellular stocks remain desperately cheap and we expect the sector to grow over the next two to three years," said Abagail Nelson, Latin American cellular telephone analyst with Paribas in New York. "While we believe the average revenue per user is expected to decline by 50 percent on average in the overall market in 199, we also see the tremendous pent-up demand feeding subscriber growth," Nelson added. Nelson expects her top pick, Brazilian cellular phone company Telesp Celular Participacoes SA (NYSE:TCP), to return 7 percent growth in earnings before interest, taxes, depreciation, and amortization over the next five years. Telesp Celular was down 1/16 at 17 on the New York Stock Exchange.