Andy Jackson Saturday March 29, 2003 The Guardian

The Latin American papers, positioned in what the US regards as its "backyard", have been divided over the war in Iraq. "This unilateral decision to attack Iraq is an unprecedented step," lamented La Nacion in Argentina. It felt the US had gone too far this time: "Even its regretful incursions into Latin American politics have been limited to supporting domestic groups."

In Mexico, Reforma questioned why its northern neighbour had blocked the signal of the country's Canal 40 TV station after it showed footage of dead Iraqi civilians. "One of the US's greatest strengths has always been its freedom of expression," said the paper. "But when it denies the right of its people to see what it is doing in their name, it does a great disservice to the principles it is trying to enforce in Iraq."

Less enthusiastic still was Gilberto Lopez y Rivas of La Journada, who wondered in the Mexican paper what principles the US was espousing. "The US has long used the pretext of liberty to commit crimes against the rights of Latin American people," he said. "They did not establish democracy in a single one of the countries in which they intervened - only fictional representations of that promise ... Now it is time for Iraq to be liberated, and Latin Americans know only to well what that liberation means."

Journal de Brasil noted that the war had caused the end of President Lula de Silva's political honeymoon. "The quarrel between George Bush and Saddam Hussein is of little consequence to us," it said. "What is currently at stake for Brazil is our democracy and, above all, our right to live in freedom from fear."

Venezuela has a turbulent and besieged leader of its own, and La Nacional wondered whether President Hugo Chavez could deal with his country's problems. Reports of Colombian guerrillas and drug traffickers operating within Venezuela led the paper to question Mr Chavez's defence policy. "The government can no longer continue on its ambiguous course," it said. "It is obsessed with the defence of Caracas as if it is there that our sovereignty is at risk. But concentrating troops in the capital puts the security of all the regions at risk. Under the indifferent gaze of the government, the rural population has been placed between the sword and the wall. If it is not already too late, our leaders must take responsibility, speak truthfully to the country, and preserve our nation from potentially damaging threats."

EDUARDO KAPLAN, Dow Jones Newswires Friday, March 28, 2003 (03-28) 11:49 PST (AP)

<a href=www.sfgate.com>A Dow Jones News Analysis

NEW YORK (Dow Jones/AP) -- For all the talk about orderly debt restructuring, every day seems to bring news of a new Latin American government or company rushing to exchange its bonds.

The latest to join the growing line was the market-unfriendly government of Venezuela President Hugo Chavez, who announced Wednesday his cash strapped country will seek to exchange part of its foreign debt.

The news came just as Uruguayan officials were flying back home after an international roadshow to discuss a debt exchange that could reach $5 billion.

Meanwhile, several local and foreign companies that went on a shopping spree throughout the region in the 1990s are now dealing with devalued assets, depreciating currencies and lowered growth expectations.

A unit of Spain's Endesa in Chile, Brazil's local divisions of U.S.-based AES Corp., and Mexico's TV Azteca are some of the names talking to creditors about their debt burdens.

Still hovering over the horizon is the massive restructuring that Argentina will have to eventually face following its sovereign debt default in late 2001, which surpassed the $100 billion mark and triggered the country's unprecedented economic collapse.

It's hard to pin down a total figure, but Jose Barrionuevo, director of emerging market strategy at Barclay's in New York, has seen enough to call Latin America the most leveraged region in the emerging market sector.

"I can't remember a time like this," said Barrionuevo. "It's a reflection of a weak global environment which suggests things may not be improving soon, but it's worse for many of these economies since they have been in recession or close to one for three or more years. We won't have a new credit cycle until the U.S. starts growing."

Global investors who have been dealing with a fair share of bursting credit bubbles in the past three years may temporarily overcome their debt restructuring fatigue and listen to some of the latest overtures by sovereign issuers.

After all, as a recent Lehman Brothers report pointed out, debt restructuring under the threat of default is still preferable to outright default.

Uruguayan officials attested to this sentiment last week after a round of meetings with U.S. investors. The country's central bank president, Julio de Brun, said reactions were better than expected. Venezuela will likely meet willing parties, judging by the early responses.

"This is a rush, but it's more orderly than the credit restructuring in the 1990s," said Christian Stracke, head of emerging market research at independent research firm CreditSights.

Stracke was referring to the sovereign debt crises in the latter part of the decade following debt defaults by Russia, Ukraine and Ecuador.

"I think that Uruguay and Venezuela are showing that they have learned some lessons from what happened to Ecuador and Russia, for instance. They are trying to approach creditors first, instead of defaulting. They are addressing a problem of temporary liquidity, not of solvency," Stracke said.

This palpable sense of progress is a welcome development, but being able to talk to investors will amount to nothing more than good intentions if no deals are struck.

Barclay's Barrionuevo questions the prospects of the latest debt exchange offers if Uruguay and Venezuela can't come up with decent incentives for bondholders. He also said he expects Ecuador to join the ranks and start talks with creditors in the second half of the year.

Bad as conditions sound for sovereign issuers, they are even tougher for companies trying to restructure debt.

"I think in many cases you have a solvency problem," Stracke said. "Many of these companies are operating in environments where there are no sources of financing and economies aren't posting growth."

National Briefs By Detroit News staff, wire and Bloomberg News reports Automotive

DALLAS -- The Texas Supreme Court denied a request by Ford Motor Co. and Bridgestone Corp.'s Firestone unit to block trials involving 30 deadly accidents in Venezuela and Mexico involving Explorer sport utility vehicles with Firestone tires. Ford and Firestone sought to dismiss the Texas state court suits because the accidents happened abroad. Plaintiffs' lawyers said the lawsuits should be tried in Texas because Ford tested the Explorer in the state. Ford called the Texas court decision unfair, while Firestone was "disappointed" with the decision. Ford and Firestone have been named in hundreds of lawsuits involving deaths and injuries blamed on tire failures and vehicle rollovers.

Bloomberg Business News March 28, 2003, 12:12AM

CARACAS, Venezuela -- Dell Computer Corp., the world's second-largest personal computer maker behind Hewlett-Packard Co., said Thursday its Latin America sales haven't suffered from the Iraqi war and proposed boycotts of U.S. products by critics.

"It's business as usual," Peter Wiegandt, Dell's vice president for Latin America, said after a news conference. "We haven't seen any effect."

Dell's sales in the region increased 51 percent last year compared with 2001, Wiegandt said.

He declined to give sales figures, or make forecasts.

Critics of the war, including groups in Germany and Indonesia, have started boycotts against U.S. products.

The Round Rock-based computer maker has about 650 employees in the region, including a manufacturing plant in Brazil.

Shares of Dell closed down 1 cent Thursday at $27.84 on the Nasdaq Stock Market. They have climbed 4.1 percent this year.

<a href=www.upi.com>URL By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 3/27/2003 7:00 AM

RIO DE JANEIRO, Brazil, March 27 (UPI) -- Latin American stock markets fared reasonably well during this volatile week that saw military action begin in Iraq.

Indexes across the region, like those around the globe, tracked the daily news out of the Middle East.

But signs of vulnerability to a prolonged war in Iraq did emerge in markets across Latin America, with analysts saying that the short- and medium-term scenario will very much depend upon how quickly the allied forces get a grip on Iraq.

"Right now they're just trading on par with other stock exchanges, based on the flow of the news of the war," said Roger Oey, an analyst with BBV Corretora in Sao Paulo, about Brazilian equities.

"But, certainly, let's say we have a conclusion to this conflict soon, the stocks, like those around the world, would react positively."

Brazil -- Latin America's largest economy -- is looking to make strong gains not only should war end soon in Iraq, but because of stocks that analysts say are still highly discounted from fears of the country defaulting.

"Brazil is a unique case. All the stocks were pricing in not only the risk of a war, but also that the government would introduce policies that would lead to inflation, high interest rates, and more a social-benefits driven policy," Oey said.

"But now the government ... is promising to push through strong (economic and legal) reforms. In terms of economics, Brazil is too discounted for the present scenario."

Currencies across the region are faring quite well, fueling further investor optimism.

Argentina's peso rose to an 11-month high Wednesday, as analysts said exporters earning in dollars bought up the local currency.

The peso rose 1.36 percent to 2.89 to the dollar. The peso has gained more than 15 percent since the beginning of the year.

Brazil's currency -- the real -- has shone of late, despite a drop of 0.42 percent Wednesday to 3.38 to the dollar.

But the decline in Brazil is somewhat worrying for investors, as analysts blamed it on the notion of a longer war in Iraq, which would send oil prices up and spur inflation in the country.

Additionally, all the countries in the region are extremely vulnerable to dampened emerging-market investors' appetite for pumping cash into Latin America.

One soft spot for Brazil this week has been labor relations.

On Wednesday, metalworkers began a planned strike in Sao Paulo, the biggest labor walkout since President Luiz Inacio Lula da Silva took office on Jan. 1.

The workers are seeking higher pay and are organized by one of Brazil's biggest unions, Forca Sindical. Wednesday's action affected 40 factories and included some 23,000 workers.

Union organizers say 280,000 workers might eventually strike. They are demanding pay raises of 10 percent, saying inflation has risen too fast for wages to keep up.

As for the markets, Brazil's Bovespa stock index climbed 1.4 percent to 11,158 last Thursday, as investors looking for the war in Iraq to quickly end pushed the index to its highest level in two months. Aircraft manufacturer Embraer gained 3.8 percent, while state-run oil company Petrobras added 1.9 percent.

On Friday the index rose 2 percent to 11,377, as investors were bullish on the progress of the war in Iraq. Long-distance company Embratel gained 6.6 percent, while Embraer added another 6.1 percent.

Monday brought a steep loss on Wall Street, which sent Latin America down with it.

The Bovespsa lost 2.8 percent to 11,052. Investors were suddenly faced with a war in Iraq that might drag on longer than hoped. Embraer plunged 7.2 percent, while Embratel lost 5.4 percent.

The Bovespa gained 1.6 percent to 11,232 Tuesday as investors gained confidence that allied troops were making solid progress. Telemar gained 1.8 percent while Petrobras added 1.9 percent. Embraer, however, dropped 4 percent after revising down its forecast on jet deliveries. Swiss International Airlines told Embraer early Tuesday that it was halving an order for 60 jets.

Wednesday brought a loss of 0.23 percent to 11,206. Utility Eletropaulo lost 2.24 percent, Telesp Celular shed 3.39 percent in heavy trade, and Petrobras lost 1.15 percent. Investors were weighed by President George W. Bush's reiteration that the war in Iraq was going to be a protracted affair.

In Mexico, the IPC index finished last Thursday up 0.5 percent to 6,048 in thin trade. Investors held out hopes for a short war in Iraq. Wal-Mart de Mexico, or Walmex, rose 3.3 percent, while cellphone giant America Movil lost 1.2 percent.

Markets were closed on Friday for a holiday.

Monday brought a loss of 2.1 percent to 5,924 as the index followed Wall Street down. Worries on Iraq weighed. Fixed-line phone company Telmex lost 1.7 percent, while America Movil shed 2.7 percent. Walmex lost 1.2 percent.

The IPC rose 0.2 percent Tuesday to 5,938 as trade was quiet and all eyes were on Iraq. Walmex gained 1.6 percent.

On Wednesday the IPC gained 0.24 percent to 5,952. Mobile phone operator Iusacell gained 14.9 percent, Walmex rose 2.49 percent, and industrial group Alfa added 1.17 percent.

In Argentina, the Merval stock index gained 1.7 percent to end at 574.2. Grupo Financiero Galicia -- which controls the country's largest private bank -- added 3.3 percent.

Friday brought a gain of 1.9 percent to 585.4. The banking sector fared well as the government appeared open to helping bail out banks hit hard by the one-year banking freeze. Banco Frances added 6.3 percent and Grupo Galicia was up another 5.5 percent.

Monday saw the Merval following the region down, with the index falling 2.55 percent to 569.7. Banco Galicia lost 3.78 percent and Banco Frances dropped 1.63 percent as the government backed off slightly from its bail-out talk.

The Merval gained 0.81 percent to 574.2 Tuesday as banks rose. Banco Frances added 2.9 percent while Grupo Galicia gained 3.9 percent. Steelmaker Acindar added 3.4 percent.

On Wednesday the Merval lost 1.02 percent to 568.4. Acindar lost 3.28 percent, Banco Santander fell 4.76 percent, and Banco Frances lost 1 percent.

Chile's IPSA index added 0.6 percent to 1,023 on Thursday. Banco Santander gained 3 percent. The index closed absolutely flat on Friday, with investors sidelined by the action in Iraq.

Monday saw a loss of 1.1 percent to 1,012 for the IPSA. Telecom CTC Chile lost 1.7 percent. Tuesday brought a loss to 1,011 in quiet trade. Banco Santander lost 2.3 percent.

The IPSA lost 0.33 percent to 1,008 Wednesday as investors worried about the outcome of the war in Iraq.

The IBC index in Venezuela ended Thursday down 0.2 percent at 8,442. On Friday the index gained 0.7 percent to 8,504. Nacional Telefonos de Venezuela, or CANTV, which comprises 40 percent of the index, added 0.4 percent.

On Monday the IBC lost 0.7 percent to 8,446 as CANTV lost 2 percent. Tuesday saw a loss of 0.2 percent to 8,423 for the index. On Wednesday the index rose slightly to 8,429.