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

To: steve kammerer who wrote (12292)	1/23/1999 10:09:00 AM
From: David Petty	Read Replies (1) \| Respond to of 22640

Steve K., Howdy! (As far as I can tell, 32% decline not 50%) You stated that "1 Real in July was worth $1.17" No, 1.17 Real was worth $1.00 US Around July 20th 1 real was worth $0.8618 US$ (1.16 Real=1.0 Dollar) Yesterday 1 real was worth $0.588 US$ (1.70 Real=1.0 Dollar) That would be approx 32% decline .588/.8618 (.682) The quote on the Bovespa yesterday was RCTB40 @112.00 Reals 112/1.70=65.88 versus July rate 112/1.16=96.55 65.88/96.55=.682

To: steve kammerer who wrote (12292)	1/23/1999 10:14:00 AM
From: Telemarker	Respond to of 22640

Come on, Steve. Take out a calculator and look at what you're saying. A baby bra with R117.00 of profits with the Real at 1.17 would have $100.00 of profits. With the Real at 1.72, these R117.00 of profits translate into $68.02, a 32% decrease in U.S. Dollar terms. Obviously, currency rates are a large part of this game, but it is indeed more complicated than that. I view exchange rates as symptomatic of underlying economic fundamentals (although sometimes, in the short term, they can be the driver as will probably be the case here). The marketplace is now looking at what will happen to the Real in the future, and how it will affect the Brazilian economy on a going-forward basis. Regards.