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: md1derful who wrote (15411)	5/19/1999 9:08:00 PM
From: Steve Fancy	Respond to of 22640

Brazil lowers key Selic reference rate to 23.5 pct Reuters, Wednesday, May 19, 1999 at 19:08 BRASILIA, May 19 (Reuters) - Brazil's Central Bank on Wednesday lowered the reference Selic interest rate to 23.5 percent from 27.0 percent, the bank's monetary policy director Luiz Fernando Figueiredo said. The bank's Monetary Policy Committee, known as the Copom, also maintained the bias to ease the reference rate until its next meeting. The Selic determines the yields on domestic debt and is used to set consumer credit rates. Copyright 1999, Reuters News Service

To: md1derful who wrote (15411)	5/19/1999 9:09:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

FOCUS-Brazil cenbank cuts rates again, to 23.5 pct Reuters, Wednesday, May 19, 1999 at 20:26 By Shasta Darlington BRASILIA, May 19 (Reuters) - Brazil's Central Bank took another swipe at its key interest rate on Wednesday, cutting the Selic even more than expected to 23.5 percent as Latin America's biggest economy shrugs off a shock currency devaluation. The bank's Monetary Policy Committee (Copom) trimmed the benchmark rate from 27 percent in its seventh cut in about two months and maintained the bias to ease the reference rate until its next meeting. The Selic sets the yields on government debt and is used to determine consumer credit rates. Analysts had expected the Copom to cut rates to 24 percent or 25 percent. "There were three principal reasons for this decision," the bank's director of monetary policy Luiz Fernando Figueiredo told reporters after the meeting, citing inflation as the main factor. Huge capital flight forced the Central Bank to abandon its strict foreign exchange policy in mid-January and eventually float the currency against the dollar. The bank hiked interest rates up to 45 percent to fend off inflation as the real plummeted 45 percent against the dollar. With inflation and the foreign exchange rate stabilizing much sooner than economists predicted, the Central Bank has slashed borrowing costs. Figueiredo said he expects inflation in the next four months to come in below 0.5 percent a month. That compares with price hikes of 1.41 percent in February, fueling fears of double-digit inflation. Now, both economists and the government are calling for inflation of about 7 percent in 1999. Figueiredo also cited solid economic performance in the first quarter and encouraging capital inflows as the two other reasons the bank lowered the Selic yet again. Contrary to economic forecasts, Brazil showed signs of growth in the first quarter of 1999, helping lure foreign investors back. Stocks have jumped amid a fresh wave of inflows which have also bolstered the currency and international reserves. Some market watchers had worried that signs of a shift in U.S. interest rate policy could slow rate cuts in Brazil because of concerns over capital flight from Latin America's largest economy. The U.S. Fed left interest rates unchanged on Tuesday but signaled its willingness to raise rates in the future to curb inflation by adopting a formal policy bias toward higher borrowing costs. The decision discards a so-called "neutral" interest-rate outlook that has held since Nov. 17, after the Fed made the last of three rapid-fire interest rate cuts. "If the U.S. central bank at some point has to raise its interest rates one, two or three times that doesn't mean that capital flows to Brazil are going to change," Figueiredo said. "If it happens in a significant way, that's another consideration, but it's not the case now," he added. shasta.darlington@reuters.com)) Copyright 1999, Reuters News Service

To: md1derful who wrote (15411)	5/19/1999 9:12:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's real ends bit weaker amid Argentine woes Reuters, Wednesday, May 19, 1999 at 17:06 SAO PAULO, May 19 (Reuters) - Brazil's currency real <BRBY> ended 0.36 percent weaker at 1.672 per dollar Wednesday due to local market rumors that Argentina may devalue its currency, traders said. Argentine officials denied the rumors. The real finished at its weakest level in two weeks on speculation that Argentina may be planning to float the peso, putting pressure on the currency in neighboring Brazil. Copyright 1999, Reuters News Service

To: md1derful who wrote (15411)	5/19/1999 9:13:00 PM
From: Steve Fancy	Respond to of 22640

Latam markets swoon amid Argentine currency rumors Reuters, Wednesday, May 19, 1999 at 18:14 By Caroline Brothers MEXICO CITY, May 19 (Reuters) - Latin American markets took a hammering on Wednesday as rumors, vehemently denied by officials, spun across the continent that Argentina was weighing a change in its eight-year-old currency board system, which fixes the peso one to one with the dollar. While the origin of the rumor was unclear, speculation that Argentina may be planning to devalue the peso played havoc with regional bolsas, Latin American debt issues and floating currencies during Wednesday's trading session. Argentine Undersecretary of Finance Miguel Kiguel denied to Reuters that the country was considering any change to its currency regime, but not before the rumors slashed 3.69 percent off Buenos Aires' Merval stock index and spooked investors across Latin America. In Brazil, Argentina's main trading partner, the newly floated real shed 0.36 percent to 1.672 per dollar, while Sao Paulo's blue-chip stock index lost 1.26 percent. "If Argentine markets come under attack, the most liquid market in Latin America -- Brazil -- would be sold again," said a currency trader at Bozano Simonsen bank in Sao Paulo. In Mexico, whose floating currency has made it Latin America's punching bag during emerging market crises over the past year, the peso shed 4 centavos from its 9.27-per-dollar opening level on the rumor, moderating that loss only slightly during the session. But Mexico's IPC index of leading shares felt sharper pain. After reaching a historic high of 6192.86 points 10 days ago, it shed 2.4 percent to 5724 points by midday, though the losses were later staunched by Kiguel's denial. "If they devalue the Argentine peso that will affect Brazil," said Carlos Samano, director of research at Bancomer brokerage in Mexico City. "As for Mexico, there will be no effect on the real economy because we have limited trade links, but there will indeed be an effect as far as regional risk perception is concerned." Emerging market debt issues in New York also lost ground on Argentine nerves. Traders said that was due more to worries over the country's large financing requirements in the external debt markets, and discomfort at the possibility of its gross domestic product shrinking by as much as 3 percent this year. Argentine global bonds <ARGGLB17=RR> due 2017 were 3-1/2 points lower at 90-3/4 during the New York morning session. Meanwhile, Brazil's C bonds, the most liquid emerging debt contracts traded abroad, shed 1.5 to 64.75 by midday Brazilian time. "The market is nervous about analysts' view on Argentina's economy," said one fund manager at a big international bank. Wednesday's rumors coincided with an interview published on Monday in the London-based Financial Times newspaper with a former Argentine economy minister, Domingo Cavallo. Cavallo, who orchestrated Argentina's move toward a currency board system by pegging the peso to the dollar in 1991, smothering years of hyperinflation, was quoted as saying Argentina could float its peso. His comments coincided with strong rumors in Brazilian markets that Argentina would allow its currency to float. But Cavallo told Reuters in a separate interview on Wednesday that his comments had been misinterpreted, and there was no chance the Latin American nation would abandon the currency board, which fixes the peso at par with the dollar. Copyright 1999, Reuters News Service

To: md1derful who wrote (15411)	5/19/1999 9:32:00 PM
From: Steve Fancy	Respond to of 22640

Foreign banks raise stake in Brazil's Boavista ReutersPlus, Wednesday, May 19, 1999 at 19:32 SAO PAULO, May 19 (Reuters) - French bank Credit Agricole Indosuez (SBF:INDO.P) and Portugal's Banco Espirito Santo will raise their stakes in Brazil's Banco Boavista Interatlantico (SAO:BBVT3), four months after its funds incurred big losses for investors, a Boavista executive said on Wednesday. Credit Agricole would lift its participation in Interatlantico, the holding company that controls Boavista, to 40 percent from 21.6 percent, Boavista director Luiz Alberto Marques told Reuters. Espirito Santo would also increase its stake to 40 percent from the current 35.8 percent, he said. The foreign institutions would together increase their capital by 50 million reais, making the local Monteiro Aranha Group drop its stake to 20 percent from 30.8 percent. They would also buy shares from minority shareholders through a public offer. Marques said the bank would also be taken off the stock market once the capital restructuring was concluded. President Jose Luiz Miranda would become chairman of the board and a new president would be named, he said. The changes in Boavista come four months after investment funds linked to the bank suffered heavy losses by betting against a currency devaluation in Brazil. The bank, which made a profit in its own trading operations with the January devaluation, offered to reimburse investors for their losses, estimated at 90 million reais. Credit Agricole and Espirito Santo invested in Boavista in September 1997 and were among the first foreign banks to enter Brazil in the recent wave of acquisitions. Copyright 1999, Reuters News Service

To: md1derful who wrote (15411)	5/19/1999 9:35:00 PM
From: Steve Fancy	Respond to of 22640

Brazil IGP-M price index keeps falling early May Reuters, Wednesday, May 19, 1999 at 19:40 SAO PAULO, May 19 (Reuters) - Brazilian prices continued to shrink into early May for a new indication that the country has beat the inflation spiral feared after the January currency devaluation, a private research group said on Wednesday. Brazil registered deflation of 0.25 percent from April 21 to May 10, compared to 0.05 percent in the last 10 days of April, as measured by the private Fundacao Getulio Vargas' (FGV) IGP-M index. The IGP-M is a compilation of three indices, with the wholesale price index accounting for 60 percent of the total. Wholesale prices led the deflationary trend with a fall of 0.65 percent from April 21 to May 10. Wholesalers had hiked prices after the devaluation, sending the IGP-M up in February and March. But the weak economy prevented retailers from passing the increases on to consumers, helping to curb inflation growth. The IGP-M for May, which measures prices up to the 20th day of the month, will be released at the end of May. Earlier Wednesday, the University of Sao Paulo's Economic Research Institute (Fipe) said its closely watched inflation index might show deflation in May because of falling food prices. It also revised down its forecast for 1999 inflation to 6 percent from 7 percent. Copyright 1999, Reuters News Service

To: md1derful who wrote (15411)	5/19/1999 9:37:00 PM
From: Steve Fancy	Respond to of 22640

Brazil shares end lower amid Argentina concerns Reuters, Wednesday, May 19, 1999 at 19:59 SAO PAULO, May 19 (Reuters) - Brazilian shares slumped 1.22 percent on Wednesday amid rumors that neighboring Argentina may release its tight grip on the peso currency, which has been pegged at par with U.S. dollar since 1991, traders said. Sao Paulo's benchmark Bovespa stock index closed at 12,118 points amid the devaluation worries, which persisted despite fierce denials by Argentine officials. "Rumors about Argentina really weighed on the market, even though is seems now that they really were just rumors," one trader said. The Bovespa fell to an intra-day low of 12,008 points. Before the devaluation concerns arose, market watchers said they expected shares to rise amid optimism that the Central Bank would cut its key Selic reference from its current 27 percent. Analysts say the bank's Monetary Policy Committee was likely to lower the rate to between 24 and 25 percent when it wraps up its meeting later Tuesday. Copyright 1999, Reuters News Service