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Brazil shares dip while Unibanco jumps on Net offer

SAO PAULO: Brazilian stocks lost ground on Thursday as profit-taking resumed, but Unibanco shares 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 in calmer trade after two days of wild swings as the market was transfixed by Wall Street and worries about increases in interest rates.

"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 so far this week is down 5.7 percent after a 6.4 percent tumble Tuesday and a recovery of 2.5 percent Wednesday.

The Bovespa 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, Cohen said.

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

The relative calm in the market Thursday contrasted with the excitement over Unibanco.

Unibanco ended up 5.7 percent 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 to increase the client base and raise revenue in the Unibanco offer as they did when bank leader Bradesco's offered free, but limited Net access in December.

Unibanco said it wants to double the clients who use its Internet banking service to 600,000.

Analysts have chosen banks as some of their top picks for 2000 precisely because they are well-positioned 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