Safe bets.

With a U.S. economic slowdown giving the market jitters, which investments are recession-resistant?

Following the U.S. Federal Reserve's surprise interest-rate cut last month, many market players have been confused about what direction to take with their investments. The fear is that an erroneous strategy could leave investors suddenly stranded amidst an economic recession.

To invest with confidence, one had best look at those companies that have solid growth fundamentals and strategies based on their investment plans. Among these sound investment options is CF Mexico (Consolidated Freightways). Last month The Economist published CF's plans to Invest US$17 million in projects sprinkled from the northern border to Mexico City.

The investments will increase this company's commercial value considerably and position it as the largest local freight terminal in existence. In addition, it has plans to expand into Phoenix, Arizona and McAllen, Texas next March. One very good reason to invest in this company: Returns are expected to be high.

TELECOM PICKS

There are several attractive telecom sector opportunities for investors. One is the much-talked about sale of Iusacell to Vodafone by the Peralta family, who hold 34.5% of the cellular company. Vodafone has strong ties with the U.S. company Verizon Communications, which already has an interest in Iusacell. The move confirms Verizon's drive to further their interests in Latin America. JP Morgan estimates that the price paid per share was US$20. Negotiations for the sale are likely to reflect positively during coming months, putting heavy pressure on the competition.

Ricardo Salinas Pliego's holdings, telecom company Unefon and retail-sector giant Elektra, are also attractive investment options. High projections are expected for Elektra, one of the sector's strongest chains, especially following its brisk 2000 Christmas sales. Meanwhile, Unefon made its public offering on the Bolsa for an initial amount of 176,129,000 ordinary series "A" shares. This company is using its relationship with Salinas Pliego-owned television giant TV Azteca to promote share sales via televised spots aimed at small investors, which, so far, have captured a large amount of capital (last reports were near 880.8 million pesos).

The empire built by Salinas Pliego seems to be ever more consolidated, even though its strategies in the past have often left much to be desired.

We can only hope that in the month of love and friendship, Cupid brings a slow economic deceleration for our northern neighbor, even though the Mexican government has repeatedly claimed it is prepared for whatever may come. Investors should be on the look out for market trends and take adequate measures to invest wisely, following government actions as well as local and U.S. economic indicators.

Rafael Olvera is an independent financial consultant.

                              Elektra growth
                  Total outlets have grown significantly
                        over the past three years.
Year    1997 1998 1999 2000
Outlets 680  819  946  949