<a href=reuters.com>Reuters Mon April 14, 2003 05:41 PM ET By Hugh Bronstein

NEW YORK, April 14 (Reuters) - Emerging market debt prices rose on Monday as a rally in U.S. stocks helped investors feel comfortable buying riskier high-yielding sovereign bonds.

With the war in Iraq apparently winding down and investors feeling less frightened about putting money to work in global markets, emerging debt rose 0.68 percent in daily returns, adding to a 9.5 percent uptick since Jan. 1.

"The credits that have a little extra yield to offer, such as Brazil and Venezuela, outperformed today while the market as a whole followed U.S. equities higher," said Christian Stracke, lead emerging markets analyst at CreditSights, a Wall Street research firm.

Benchmark Brazil C bonds BRAZILC=RR rose 1-5/8 to bid 84-7/8 while Venezuela DCB bonds VENDCB=RR gained 1-1/4 to bid 73-1/4.

"It's a continuation of the trend we've been seeing, daily rallies and the market making new highs," said Paul Masco, head of emerging market trading at Salomon Smith Barney.

"There is cash out here and expectations that there is more cash coming," Masco added.

While the Dow Jones industrial average jumped 148 points, fueled by solid earnings by big financial companies, emerging market bond spreads tightened by 18 basis points to 611 over U.S. Treasuries, according to JP Morgan's Emerging Markets Bond Index Plus.

Brazil's portion of the market tightened 48 basis points to 880 while Venezuela's tightened 46 basis points to 1,279.

Tighter spreads reflect the perception of decreased risk as measured against safe-haven U.S. Treasury bonds.

In Brazil, the market is focused on expectations that new President Luiz Inacio Lula da Silva will introduce social security and other reforms seen by Wall Street as necessary for the country to balance its mountainous debt load.

The Venezuelan economy will shrink by about 8.9 percent this year, in line with last year's contraction, while inflation will rise 35 percent, the government said on Monday, days after the International Monetary Fund issued more dire predictions.

Following a two-month national strike that crippled the country's key oil sector in December and January, the IMF last week forecast a gross domestic product contraction of 17 percent, with an inflation spike of 40 percent.

But since then the country has dramatically stepped up oil production, Venezuelan Finance Minister Tobias Nobrega said in an interview with Reuters during a visit to New York.

Inflation, Nobrega added, will be kept in check in part by the expected shrinkage in GDP.

Venezuela's annualized inflation hit 34.1 percent in March. Inflation closed 2002 at 31.2 percent, the highest level in five years and more than double the 12.3 percent recorded in 2001.

VENEZUELA'S FRACTIOUS POLITICS

Opponents of Chavez, who organized the strike, accuse him of trying to establish a Cuban-styled socialist state.

Despite the political turmoil, Stracke recommends investors take an overweight position in Venezuelan debt.

"The bonds have held up fine, even though they are lagging Brazil," Stracke said.

"I think you should stay overweight but it will take some time to be convinced that there is not another political collapse around the corner," Stracke said. "Meanwhile, the government has announced expenditure cuts that will ensure that the budget deficit is manageable."

Reuters-Forbes.com, 04.14.03, 5:12 PM ET

CHICAGO (Reuters) - Gold prices fell Monday as some optimism about economic growth and corporate profits deflected the war spotlight from safe-haven investments.

Oil prices closed mixed as the markets awaited decisions by the Organization of Petroleum Exporting Countries. OPEC may soon pull back production it raised before the war with Iraq, but Venezuelan and Nigerian supplies have already been rising.

At the COMEX, trading volume in gold was far below what was seen before the war in Iraq, when gold hit its highest price in 6-1/2 years, near $390 an ounce.

The U.S.-led forces that toppled the government of Saddam Hussein are wrapping up combat after 26 days. Financial markets continue to retrain their sights on the stock market.

On Monday, Wall Street spirits were raised by the progress of the war and by encouraging earnings from Citigroup Inc. , the world's biggest banking group. The Dow Jones industrial average closed 147 points higher at 8,351.

As in recent weeks, gold prices fell as stocks rose and diluted safe-haven demand from big investors.

COMEX June gold closed $3.60 lower at $324.90 an ounce. Gold bullion closed at $324.30/5.05, down from $327.80/8.55 at Friday's close. The London Monday afternoon fix was $325.95.

U.S. Central Command said the capture of Saddam Hussein's hometown of Tikrit Monday brought the U.S.-led military campaign to a "transition point." But it was not ready to say the war was over, given the potential for small-scale skirmishes.

Investors grew nervous as Washington accused Iraq's neighbor Syria of harboring members of Saddam's government and of testing chemical weapons. The U.S. search for such weapons of mass destruction in Iraq prompted the U.S.-led invasion.

But analysts said the gold market looked more balanced since prices fell some $70 from the highs. Gold bottomed at $318.75 a week ago, its lowest since Dec. 3, 2002.

"To a large extent, the short-term large commodity funds and the novice speculators have now left this market," said Leonard Kaplan, president of Prospector Asset Management.

U.S. interest rates are at 40-year lows, which makes gold more attractive. The dollar is also near multiyear lows, which makes dollar-denominated gold cheaper for overseas investors.

May silver bucked gold's trend, rising 4.5 cents to $4.538 an ounce and trading at a four-week high at $4.545.

At the New York Mercantile Exchange, crude oil and heating oil futures for May delivery closed firm on short-term supply tightness. But most other petroleum contracts closed lower.

NYMEX May crude closed 49 cents higher at $28.63 a barrel. In London, May Brent crude rose 25 cents at $25 a barrel.

Traders said the main question mark remains OPEC, which has signaled it is considering reducing crude output to ward off a further dive in prices amid oversupply. OPEC ministers are expected to gather on a still-undecided date this month.

Iraqi oil production and exports are forecast to resume in three months and may be aggressive to finance rebuilding.

Meanwhile, rising production from Nigeria after a recent shutdown caused by ethnic clashes and increasing exports from Venezuela, which is emerging from a long strike, were also adding to world supplies.

NYMEX May heating oil closed 2.30 cents higher at 74.75 cents. May gasoline fell 0.13 cent to 84.91 cents a gallon.

At the Chicago Board of Trade, soybeans ignored the record harvest in Brazil and Argentina now gathering pace and set new five-year highs. May soybeans closed 7-1/2 cents higher at $6.07-3/4 a bushel.

China, the top U.S. soybean buyer, has imported record amounts of soybeans since September as its soybean crush industry has boomed and livestock herds grown. CBOT soymeal, a prime livestock feed, also closed near contract highs Monday.

China's soybean importing, coming after U.S. soybean crops shrank amid drought last year, has driven projected U.S. soybean end-season stocks this year to seven-year lows.

Rumors began circulating that Brazilian soybeans might even be imported this summer into the United States, the world's biggest soybean exporter. That has already happened with two other U.S. crop exports: wheat and soymeal.

The U.S. Agriculture Department said last Thursday that China's soybean imports in 2003 would be 500,000 metric tons more than what it expected in March at 16.5 million tons -- and compared with 10.4 million imported last year.

"I'm worried about them going to 18 million tons, instead of 16.5," said analyst Roy Huckabay at the Linn Group.

CBOT May corn closed unchanged at $2.39-1/4 a bushel. But May wheat closed 3-1/2 cents lower at $2.80-3/4 on worries about whether Egypt will stay a strong U.S. wheat importer.

<a href=reuters.com>Reuters Mon April 14, 2003 03:33 PM ET (The following statement was released by the ratings agency)

NEW YORK, April 14 - Standard & Poor's Ratings Services said today that it assigned its 'A+' long-term and 'A-1' short-term credit ratings to Fondo Latinoamericano de Reservas (FLAR), Latin American Reserve Fund, whose primary goal is to assist and support the balance of payments of its member countries by granting them short- and medium-term loans. The outlook on the long-term ratings is stable.

"FLAR's ratings are supported by its active membership support, robust public policy role, and strong capital position," said credit analyst Richard Francis. "Its principal shareholders (the Republics of Bolivia, Colombia, Costa Rica, Ecuador, Peru, and the Bolivarian Republic of Venezuela) have consistently honored their obligations to the fund, even while encountering severe economic stress," he added.

According to Mr. Francis, FLAR's members are expected to continue providing it preferred creditor status going forward. "They support the institution because it stands ready to provide inexpensive unsecured dollar financing to member central banks at short notice for balance of payment support," Mr. Francis noted. "Standard & Poor's also expects FLAR to continue its success in expanding its membership beyond the Andean nations, as it has done recently with the accession of Costa Rica," he concluded. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions.

Reuters, 04.11.03, 1:23 AM ET NEW YORK, April 11 (Reuters) - Baker Hughes Inc, the world's third-largest oilfield-services company, on Friday forecast a first-quarter profit shortfall due to business interruptions from civil unrest in Nigeria and war-related delays in the Middle East. The Houston-based company said it expects to post a quarterly profit from continuing operations of between 13 cents and 14 cents a share. According to research firm Thomson First Call, Baker Hughes was forecast to report, on average, a first-quarter profit of 19 cents a share, on estimates ranging from 17 cents to 22 cents a share. A year ago, Baker Hughes reported a first-quarter profit of 22 cents a share. The company also cited the impact of ongoing weakness in activity in the U.S. Gulf of Mexico and the North Sea, incremental pressure on pricing and slower than expected resumption of industry activity in Venezuela. Baker Hughes shares closed up 78 cent, or 2.63 percent, at $30.39 on the New York Stock Exchange on Thursday

Description: Caixanova is a Spanish savings bank that serves Latin America through its headquarter in Miami. The bank has offices in Mexico and Venezuela and will open more offices in Argentina, Brazil and Chile during 2002 and 2003. In Latin America, it offers wholesale and private banking services to companies and individuals.