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Brazil shares dip while Unibanco jumps on Net offer

SAO PAULO: Brazilian stocks lost some ground on Thursday as profit-taking resumed, but shares in Unibanco jumped as the bank offered clients free Internet access, traders said.

The Sao Paulo Stock Exchange's Bovespa Index ended 0.9 percent lower at 16,107, amid calmer trade after two days of wild swings as the market was transfixed on Wall Street and its worries of rate hikes.

"It wasn't a nervous day, just normal profit-taking," said Dan Cohen, equity strategist at Hedging Griffo Asset Management.

The Bovespa ended 1999 with a 152 percent gain, but is so far down this week 5.7 percent after a 6.4 percent tumble Tuesday and a recovery of 2.5 percent Wednesday.

The Bovespa, Cohen said, will remain focused on the US market and indicators ahead of a meeting of the rate-setting Federal Open Market Committee of the US central bank at the beginning of next month.

Locally, the Central Bank's Monetary Policy Committee meeting on Jan. 19 to decide on rates, may become a big factor in light of the rate woes in the US

The relative calm in the market contrasted with the utter excitement in Unibanco.

Unibanco ended with a 5.7 percent gain at 46.50 reais, but rose more than 20 percent after Brazil's third largest private bank ran four-page newspaper ads announcing free, unlimited access to the Internet.

"This rise was a bit exaggerated," said one market player.

But some onlookers see great potential in Unibanco's offer for increasing the client base and raising revenue, as they did for banking leader Bradesco's move to offer free, but limited Net access in December.

Unibanco said it wants to double the number of clients who use its Internet banking to 600,000 with the access offer.

Analysts have chosen banks as some of their top picks for 2000, precisely for their good position to cash in on the Internet frenzy sweeping Brazil.

Bradesco got a small lift from its competitor's move, jumping 0.8 percent to 13.90 reais, while Itau, which is rumoured to be ready to make an Internet access offer, closed 1.4 percent higher at 148.00.

Cable TV operator Globocabo, another big recent Internet-linked gainer, dropped 5.6 percent to 2.89 reais.

Volume on the Bovespa was heavy at 1.0 billion reais, just below Wednesday's 1.1 billion.-Reuters