Reuters, 06.05.03, 6:02 PM ET CARACAS, Venezuela, June 5 (Reuters) - The world's biggest mobile phone maker, Finland's Nokia Corp. (nyse: NOK - news - people), sees Latin America's mobile phone market doubling in size to more than 200 million users by 2010, a company executive said Thursday. Lauri Kivinen, Nokia's Vice President for Corporate Communications, said in a video conference broadcast from Mexico that the number of mobile phone users in Latin America reached 101 million last year. The region currently accounts for six percent of the Finnish company's world sales. "In the next six years, the (mobile phone) users' base in Latin America is going to double," Kivinen, speaking through an interpreter, said in the broadcast to audiences in Argentina, Chile, Colombia, Peru and Venezuela. The Nokia executive added, however, that this projected market growth would depend on whether the cost of mobile phone services could be kept accessible for the inhabitants of Latin American countries, many of which are experiencing economic problems. "The tendencies for the coming years will be based on the general growth of mobile phone services, the displacement of fixed-line telephones by mobile phones and by the strengthening of the GSM (Global Standard for Mobile Communications) open standard," Kivinen said. He added Nokia's share of the mobile phone markets in Latin American countries was higher than its 38 percent global market share, but he did not give a nation-by-nation breakdown. Nokia has a presence in 35 Latin American and Caribbean countries and operates assembly plants in Brazil and Mexico.

June 5 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's real rose from yesterday's three-week high after the central bank's sale of contracts used to protect investors from a decline in the currency, reducing the demand for dollars.

The real rose 1.3 percent to 2.8785 per dollar in Sao Paulo at 2:35 p.m. New York time. The real extended gains after Banco Safra SA said it plans to sell two-year bonds and a congressional committee paved the way for pension system changes to reduce government debt. The real has gained 23 percent in 2003, the best performance of the 16 most traded currencies. Mexico's peso rose.

Investors, primarily bank Treasury desks, have more bets the real will fall than it will rise, said Helio Ozaki, a trader with Finambras Corretora de Cambio e Titulos Ltda., a Sao Paulo brokerage that handles more than a quarter of all Brazilian spot- market currency trades. The central bank's sale yesterday of the currency protection made it less likely demand for dollars will rise allowing their bets to pay off.

The central bank slapped a lot of people yesterday,'' Ozaki said. There are about 30,000 more dollar futures contracts out there betting the dollar will strengthen than weaken -- yesterday's sale has pulled the rug out from them and made anyone else ready to bet against the real think twice.''

Many treasury desks were forced to stop adding to their positions yesterday, said Flavio Farah, head of the Treasury desk at the Sao Paulo unit of Dusseldorf, Germany-based Westdeutsche Landesbank Girozentrale.

Betting against the real right now makes no sense,'' Farah said. It's going to be a while before we figure out just what to do for the medium term.''

Inflows, Debt

The currency extended early gains after Banco Safra announced its plans and on the lower house pension ruling.

Sao Paulo-based Banco Safra plans to sell bonds maturing in July 2005 to yield 5.5 percent to 5.75 percent. Morgan Stanley has been hired to manage the sale.

In Brazil's capital, Brasilia, a committee of Brazil's lower house of Congress said a bill to limit pension expenses is constitutional, moving forward plans designed to help the government eventually reduce its $400 billion debt.

In the meantime, capital flows to the country continue, boosting demand for the real and helping it rise. More than $8 billion of bonds and loans have been contracted abroad this year, according to the O Globo daily newspaper, helping the real outperform all the world's major currencies.

Yesterday, Banco Votorantim SA, the financial services arm of the Sao Paulo-based Votorantim cement, mining, banking and industrial group sold $180 million of two-year bonds to yield 6.25 percent.

Telesp Celular Participacoes SA, based in Sao Paulo and Brazil's biggest cellular telephone service provider, said it plans to sell $150 million of 18-month bonds. Telesp Celular Par is controlled by Vivo, a joint-venture between Madrid-based Telefonica SA and Lisbon-based Portugal Telecom SGPS SA.

Development, Rate Outlook

Also boosting investor sentiment, Alain Belda, the chief executive of Pittsburgh-based Alcoa Inc., the world's biggest aluminum maker, said his company plans a new power plant in Brazil and will invest $2.7 billion in Brazil by 2011.

Capital flows remain strong and the swap sale makes it easier for the flows to cause the real to rise,'' Ozaki said. There are few forces now preventing the dollar from weakening'' against the real.

The real's rise may also have been helped by comments today from central bank President Henrique Meirelles.

The inflation rate for the previous 12 months will fall to 10.8 percent, within the range the government has set as a target for this year, by the end of 2003, he said during a visit to investors in Berlin, according to newswire Agencia Estado.

A stronger real will help reduce inflation by reducing the costs of imports and commodities, which are priced in dollars.

Rate Backdrop

In coming days expectation the U.S. will cut interest rates may lift the real further. Much of the rally in Brazilian bond prices in recent months has been fueled by U.S. and European investors seeking higher returns than they can receive at home.

Brazilian banks have taken advantage of low U.S. rates -- yields on two-year U.S. Treasury bonds fell to a 53-year low of 1.198 percent this week -- to invest at Brazilian rates. Brazil's benchmark 26.5 percent rate is at a four-year high.

Lower U.S. rates could maintain the difference between U.S. and Brazilian rates that has sparked the bank bond sales even if Brazilian rates were to fall.

Investors are focusing on the possibility of another U.S. interest rate cut by the Federal Reserve as soon as its June 25 meeting, said Daniel Katzive, a currency strategist at UBS Warburg, the biggest trader in the $1.2 trillion-a-day foreign exchange market, in Stamford, Connecticut. ``The currencies that have done best are the ones with the highest yield.''

Brazil's benchmark 8 percent bond maturing in 2014 gained 0.94 cent to 91.25 cents on the dollar, causing the yield to fall to 10.14 percent, according to J.P. Morgan Chase & Co. The bond rose to a record high of 91.75 on May 13.

Mexico, Regional Currencies

The peso rebounded from its biggest plunge since Brazil devalued its currency in January 1999 by gaining for the first day in three.

The peso strengthened 0.3 percent to 10.5375 per dollar from yesterday's 10.5725 per dollar close, when it fell 2.8 percent, the currency's largest one-day decline since Jan. 13, 1999.

Colombia's peso rose from a three-week high, gaining 0.3 percent to 2,833.10 per dollar. The Argentinean and Chilean currencies were unchanged. Peru's new sol weakened 0.1 percent to 3.4837 per dollar. Venezuela fixed it bolivar at 1,598 this year.

June 5 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's real rose for a third day after yesterday's central bank sale of contracts used to protect investors from a decline in the currency, reducing the demand for dollars.

The real gained 1.4 percent to 2.8745 per dollar in Sao Paulo at 1:51 p.m. New York time from yesterday's three-week closing high. The real has gained 23 percent in 2003, the best performance of the 16 most traded currencies. Mexico's peso rose.

Investors, primarily bank Treasury desks, have more bets the real will fall than it will rise, said Helio Ozaki, a trader with Finambras Corretora de Cambio e Titulos Ltda., a Sao Paulo brokerage that handles more than a quarter of all Brazilian spot- market currency trades. The central bank's sale yesterday of the currency protection made it less likely demand for dollars will rise allowing their bets to pay off.

The central bank slapped a lot of people yesterday,'' Ozaki said. There are about 30,000 more dollar futures contracts out there betting the dollar will strengthen than weaken -- yesterday's sale has pulled the rug out from them and made anyone else ready to bet against the real think twice.''

Many treasury desks were forced to stop adding to their positions yesterday, said Flavio Farah, head of the Treasury desk at the Sao Paulo unit of Dusseldorf, Germany-based Westdeutsche Landesbank Girozentrale.

Betting against the real right now makes no sense,'' Farah said. It's going to be a while before we figure out just what to do for the medium term.''

Inflows

In the meantime, capital flows to the country continue, boosting demand for the real and helping it rise. More than $8 billion of bonds and loans have been contracted abroad this year, according to the O Globo daily newspaper, helping the real outperform all the world's major currencies.

Yesterday, Banco Votorantim SA, the financial services arm of the Sao Paulo-based Votorantim cement, mining, banking and industrial group sold $180 million of two-year bonds to yield 6.25 percent.

Telesp Celular Participacoes SA, based in Sao Paulo and Brazil's biggest cellular telephone service provider, said it plans to sell $150 million of 18-month bonds. Telesp Celular Par is controlled by Vivo, a joint-venture between Madrid-based Telefonica SA and Lisbon-based Portugal Telecom SGPS SA.

Also boosting investor sentiment, Alain Belda, the chief executive of Pittsburgh-based Alcoa Inc., the world's biggest aluminum maker, said his company plans a new power plant in Brazil and will invest $2.7 billion in Brazil over the next seven to eight years.

Capital flows remain strong and the swap sale makes it easier for the flows to cause the real to rise,'' Ozaki said. There are few forces now preventing the dollar from weakening'' against the real.

Inflation Comments

The real's rise may also have been helped by comments today from central bank President Henrique Meirelles.

The inflation rate for the previous 12 months will fall to 10.8 percent, within the range the government has set as a target for this year, by the end of 2003, he said during a visit to investors in Berlin, according to newswire Agencia Estado.

A stronger real will help reduce inflation by reducing the costs of imports and commodities, which are priced in dollars.

Interest rates also fell on expectation lower inflation may give the government room to cut its benchmark target rate at central bank monetary policy committee meetings June 17 and 18.

The overnight interest-rate futures contract for Jan. 2 settlement, the most-traded interest-rate futures contract on Sao Paulo's BM&F futures and commodities exchange, fell for a fifth day in seven, losing 1 basis point to 23.83 percent. The contract indicates investor expectations for the end of December. A basis point is 0.01 percentage point.

Rate Backdrop

In coming days expectation the U.S. will cut interest rates may lift the real further. Much of the rally in Brazilian bond prices in recent months has been fueled by U.S. and European investors seeking higher returns than they can receive at home.

Fitch Ratings' upgrade of the outlook on Brazilian debt to positive from stable may add to the demand for Brazilian investments even as the perception of default risk on $400 billion of government debt falls along with borrowing costs.

Brazilian banks have taken advantage of low U.S. rates -- yields on two-year U.S. Treasury bonds fell to a 53-year low of 1.198 percent this week -- to invest at Brazilian rates. Brazil's benchmark 26.5 percent rate is at a four-year high.

Lower U.S. rates could maintain the difference between U.S. and Brazilian rates that has sparked the bank bond sales even if Brazilian rates were to fall.

Investors are focusing on the possibility of another U.S. interest rate cut by the Federal Reserve as soon as its June 25 meeting, said Daniel Katzive, a currency strategist at UBS Warburg, the biggest trader in the $1.2 trillion-a-day foreign exchange market, in Stamford, Connecticut. ``The currencies that have done best are the ones with the highest yield.''

Brazil's benchmark 8 percent bond maturing in 2014 gained 1.19 cents to 91.50 cents on the dollar, causing the yield to fall to 10.07 percent, according to J.P. Morgan Chase & Co. The bond rose to a record high of 91.75 on May 13.

Mexico

The peso rebounded from its biggest plunge since Brazil devalued its currency in January 1999 by gaining for the first day in three.

The peso strengthened 0.2 percent to 10.5516 per dollar from yesterday's 10.5725 per dollar close, when it fell 2.8 percent, the currency's largest one-day decline since Jan. 13, 1999.

Colombia's peso rose from a three-week high, rising 0.2 percent to 2,835.48 per dollar. The Argentinean and Chilean currencies were unchanged. Peru's new sol weakened 0.1 percent to 3.4840 per dollar. Venezuela fixed it bolivar at 1,598 this year.

Thu June 5, 2003 01:14 PM ET NEW YORK, June 5 (<a href=reuters.com>Reuters) - Investors poured money into high-yielding emerging market sovereign bonds on Thursday in a bid to compensate for very low interest rates in the developed world and jittery U.S. stock markets, traders and analysts said.

Total returns jumped 0.85 percent, according to JP Morgan's Emerging Markets Bond Index Plus.

"It smells like liquidity driven by the expectation that official interest rates in the G7 are going to stay low. So the 'Let's go chase yield' trade is still on," said Mark Siegel, managing director at David L. Babson & Co., a member of the MassMutual Financial Group.

Benchmark Brazil C bonds BRAZILC=RR rose 1-1/4 to bid 91-1/2, having skyrocketed more than 25 points since the start of the year.

"All of a sudden Brazil is off to the races again for no particularly good reason," one emerging debt trader said. "We are trying to look for the catalyst and not finding it," the trader added. "The simple answer: somebody got some money, so they're spending it."

Thursday's gains added to total returns of 20.8 percent market-wide since Jan. 1. Brazil has gained an eye-popping 42.7 percent in the same period.

Even politically volatile Venezuela, suffering a deep recession, joined Thursday's rally by rising 0.6 percent.

"A main theme is credits playing catch-up," the trader said. "Credits that had lagged over the last three months of this run-up, such as Venezuela, are getting pushed up."

Venezuela has underperformed the wider emerging bond market so far in 2003, rising 13.6 percent in total returns, about 7 percentage points under the market average.

New Delhi, June 5. (PTI): The CII today welcomed the `framework agreement' signed between India and Andean community nations, saying that it was a precursor to the Preferential Trade Agreement (PTA) with the latter and would significantly help in extension of bilateral trade with Peru.

The agreement with the Andean nations including Bolivia, Colombia, Eucador, Peru and Venezuela, would also pave the way for a similar agreement with Mercosur Group comprising Brazil, Argentina, Uruguay and Paraguay, a Chamber release said.

Such a tie-up at the highest level would provide a major boost to the already expanding trade between India and Latin American countries which stood at $ 2445.44 million dollars in 2001-02 and was growing at a compound annual growth rate of above 35 per cent, it said.