Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: wl9839 who wrote (15305)	5/15/1999 1:45:00 AM
From: Steve Fancy	Respond to of 22640

US inflation data depresses Brazil shrs, currency Reuters, Friday, May 14, 1999 at 12:48 SAO PAULO, May 14 (Reuters) - Brazilian shares were lower at midday Friday while the currency, the real, <BRBY> weakened 0.24 percent against the dollar as unexpectedly high U.S. inflation data dampened sentiment in local financial markets, traders said. Sao Paulo's blue-chip stock index Bovespa (INDEX:$BVSP.X) was down 1.37 percent to 12,288 points, while the real traded at 1.658 per dollar against Thursday's close of 1.654. "The U.S. inflation numbers hit all the markets this morning, inflation was higher than anybody expected," a currency trader at Banco Bozano, Simonsen said. "But the scare has begun to pass and markets are recovering a little." The U.S. Labor Department reported that the Consumer Price Index (CPI) rose 0.7 percent in April in the sharpest monthly gain since October, 1990. High inflation could prompt the Federal Reserve to hike U.S. interest rates at next week's Federal Open Market Committee (FOMC) meeting, or shortly thereafter. Higher U.S. rates would make returns in riskier emerging markets less attractive. "The numbers don't bode well for the Bovespa, but we'll have to see what they do with rates," a stock trader at a local brokerage said. Local markets did not react much to the public sector budget deficit figures released by the Central Bank earlier Friday. Brazil's public sector nominal deficit, including the impact of the currency devaluation, narrowed in the 12 months to March to 12.3 percent of gross domestic product from 13.9 percent in February. Meanwhile, Brazil's primary surplus in the first quarter exceeded the target agreed with the International Monetary Fund of 6 billion reais, posting a surplus of 9.23 billion reais. Many economists said the primary figures were stronger than expected while interpreting the decline in the nominal budget gap as due to the recovery staged by the real in recent months. The real, according to traders, was expected to end the day little changed from Thursday's close amid light trade and balanced capital flows. saopaulo.newsroom@reuters.com)) Copyright 1999, Reuters News Service

To: wl9839 who wrote (15305)	5/15/1999 1:47:00 AM
From: Steve Fancy	Respond to of 22640

INTERVIEW-Brazil sees EU-Latam talks start in June ReutersPlus, Friday, May 14, 1999 at 14:44 By Joelle Diderich BRASILIA, May 14 (Reuters) - The European Union and Latin America should launch official talks to create a free trade area between the two regions at a summit in Rio de Janeiro in June, Brazil's Foreign Minister said. Representatives will hunker down for talks after the meeting provided the European Commission comes armed with a negotiating mandate, which it has so far been denied, Luiz Felipe Lampreia told foreign correspondents in an interview. "I am confident that we will start the meeting with the European Union having solved this pending question, which is the attribution of a negotiating mandate," he said. Nearly 50 heads of state from the European Union, Latin America and the Caribbean will meet in late June in Brazil's famous beach resort to discuss trade links. Initially, delegates will work on a free trade agreement between European countries and members of the Mercosur customs union, which groups Brazil, Argentina, Paraguay and Uruguay. Chile and Bolivia are associate members. This would be completed at around the same time of the planned creation of the Free Trade Area of the Americas (FTAA), a region stretching from Alaska to Patagonia, said Lampreia. "We can expect to launch negotiations with a view to establishing a free-trade area between Mercosur and the European Union within a time limit compatible with the limit we are discussing for the FTAA, that is until 2005," he said. Some Latin American countries want a full free trade agreement with the European Union, but negotiations are likely to be hampered by the region's desire for Europe to open its markets to Latin America's vast agricultural sector. Lampreia said Brazil, Latin America's biggest economy and a major producer of coffee, soybean and sugar, was ready to leave agricultural issues on the back burner until the end of the year. The foreign minister also said Brazil would adopt a tit-for-tat approach in trade talks, indicating that it was strongly aware of the diverse interests European companies have in Latin America's industrial and service sectors. "We will only be ready to make concessions on our tariffs if we receive reductions in tariffs of a corresponding value on products which interest us," he said. Lampreia said Mercosur had survived Brazil's devastating currency devaluation in January, adding that talks continued with Argentina on including disputed items in the customs union, which is due to turn into a free trade area by 2004. He noted that a third of Brazil's trade was now with Latin America, but dashed talk -- raised by Venezuelan President Hugo Chavez during a recent visit to Brazil -- that Mercosur was looking to expand northwards. "It is not foreseeable that Mercosur will cover all the countries in South America. There is nothing to indicate that we are close to seeing this," said Lampreia. Copyright 1999, Reuters News Service

To: wl9839 who wrote (15305)	5/15/1999 1:49:00 AM
From: Steve Fancy	Respond to of 22640

INTERVIEW-Sao Paulo recharges privatization plans ReutersPlus, Friday, May 14, 1999 at 14:57 By Shasta Darlington SAO PAULO, May 14 (Reuters) - Sao Paulo's cash-strapped government is betting it can defuse legal opposition to its privatization plan and lure investors by first selling a small utility instead of a giant power company. Brazil's wealthiest and most populous region aims to put on the block the smaller electric power producer Paranapanema as soon as June 23 to keep the privatization drive alive and raise cash quickly. "We want to move Paranapanema, a smaller company that's more accessible to a greater number of buyers, to the forefront," state Secretary of Energy Mauro Arce said in an interview. Despite dangling legal problems and concerns over electricity rate hikes and other sale terms, the state still hopes to privatize this year all three electrical generators that were spun off of Cia Energetica de Sao Paulo (SAO:CESP4) in March and at least one concession for a natural gas distribution network. "The sales are important to pay off debt," Arce said. "These privatizations were factored into our accounts this year." Sao Paulo state had originally planned to sell off the biggest chunk of Cesp, its giant generation utility, in May and follow with Paranapanema and Tiete in June. Cesp was divided into three power producers and a transmission company in preparation for the sales. The state had also hoped to sell two natural gas concessions in the interior of the state following the hugely successful sale of Comgas (SAO:CGAS4) in April for $992 million, 119 percent over the minimum offering price. Popular opposition, legal injunctions and differing views over the future of the waterways that provide some of Cesp's power, however, took the wind out of the state's sails and forced Gov. Mario Covas to delay the auctions. But as a the nation's highest court has agreed to take a look at the legal injunctions, and likely overrule them, Arce is mapping out his new course. "We will soon be in conditions to set new privatization dates," he said. "Paranapanema could go as soon June, June 23. The others will certainly come this year." Not only is Paranapanema smaller and probably cheaper than Cesp. It also does not include any of the controversial waterways, making its sale easier. And the proceeds from Paranapanema, Arce explains, are needed now. "There are some urgent debts, which is why we want to go ahead in June," Arce said. "The others can wait, though certainly we expect to sell them this year." Eight companies, including Tractebel (BRU:TREB.T), Duke (NYSE:DUK), Sithe Energies, American Electric Power (NYSE:AEP), CMS Energy Corp. (NYSE:CMS) and Brazil's VBC Energia, have expressed interest in Paranapanema and the other generators, Arce said. The state still has not determined what percentage of the firms' total capital will be sold. While the government plans to put its 31 percent stake on the block, other shares could be included in the auction, raising the stake to 45 percent. Federal electricity watchdog Aneel will also have to decide what, if any, rate increase Cesp can implement before minimum prices will be set. Arce said the government is expecting a hike of around 19 percent. Amid all the fuss over electricity, Arce has not lost sight of the gas sector. He still plans to sell this year at least one of the two concessions to develop natural gas distribution networks. "We have to do one of the areas which already has a pipeline," he said. "It has high consumption potential already this year." He said companies that lost out in bidding for Comgas have urged him to go ahead with the sale of the concession which stretches over almost two-thirds of the state from Limeira to northern and western borders. "It will be very valuable...certainly hundreds of millions of reais," Arce said. Interested buyers could include Enron (NYSE:ERE) and Italy's Agip <AGIS.CN> among others, he added. shasta.darlington@reuters.com)) -- Copyright 1999, Reuters News Service

To: wl9839 who wrote (15305)	5/15/1999 1:53:00 AM
From: Steve Fancy	Respond to of 22640

Brazil to grant increased export credits in 1999 ReutersPlus, Friday, May 14, 1999 at 18:03 SAO PAULO, May 14 (Reuters) - Brazil's National Development Bank (BNDES) is expected to grant credits of $3 billion to exporters in 1999, $1 billion more than last year, Development, Trade and Industry Minister Celso Lafer said on Friday. "Our expectation is to give support this year which will reach $3 billion, much more than what was granted last year, which was $2 billion," Lafer told local radio network CBN. "Commercial credit lines are being reworked but we still haven't reached the necessary equivalent level to what we had before the crisis in Russia," he said. Lafer was referring to Russia's debt moratorium announced last year, which triggered a crisis of investor confidence in Brazil, Latin America's largest economy. He said the ministry viewed Brazil's export sector as a priority and that the BNDES was instrumental in providing support to exporting companies in the form of credits. "In the first quarter we had BNDES support for exports to the tune of $509 million. In the first four months...it was $675 million," Lafer said. Brazil reported a trade deficit of $779 million in the January-April period, on exports of $13.747 billion and imports of $14.526 billion. Copyright 1999, Reuters News Service

To: wl9839 who wrote (15305)	5/15/1999 1:56:00 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil shares end lower after U.S. inflation news Reuters, Friday, May 14, 1999 at 19:37 SAO PAULO, May 14 (Reuters) - Brazilian shares ended 1 percent lower on Friday as concerns over U.S. inflation data undermined optimism that Brazil's economy was on the road to recovery, traders said. Even with the drop, Sao Paulo's key Bovespa index (INDEX:$BVSP.X) ended at 12,335 points this week, up 0.8 percent after foreign investors poured money into the bourse in the first few sessions, enthusiastic that the worst of Brazil's currency crisis had passed. Shares dipped on Friday after the U.S. Labor Department reported that the Consumer Price Index (CPI) rose 0.7 percent in April in the sharpest monthly gain since October 1990. "With the CPI results, everyone is worried about profit-taking in the United States and the reactions that could provoke here," Carlos Hokama, a fund manager at Banco Credibanco said. The price data could prompt the Federal Reserve to raise U.S. interest rates at next week's Federal Open Market Committee (FOMC) policy meeting, or shortly thereafter. Higher U.S. rates would make returns in riskier emerging markets less attractive. Still, Brazilian stocks cut some losses in afternoon trade amid hopes that the Central Bank will continue cutting rates at home despite the bit of negative news from abroad. "There were rumors that there could even be another rates cut today," Hokama said. The Central Bank's Monetary Policy Committee (Copom) is expected to trim rates when it meets next week, in what would mark the eighth cut since the currency crisis hit in mid-January. The government has lowered rates amid signs of slowing inflation and economic recovery. Turnover was lower than in recent sessions with 658 million reais trading hands, compared with daily volume of close to 1 billion reais earlier this week. Telebras preferred receipts (SAO:RCTB41) led blue-chip stocks lower, closing down 1.3 percent at 168.01 reais. Electric utility Empresa Bandeirante de Energia Eletrica (SAO:EBEN4) bucked the market's trend, jumping 6.7 percent to end at 11 reais after announcing a first-quarter loss of 170.3 million reais, largely because of the devaluation. Copyright 1999, Reuters News Service