Waiting for the bull.

Some short-term options

It's been tough lately for Mexican markets to generate positive figures, but even so, they seem to be on the right track. On one hand, we've seen numerous job cuts in Mexican and North American industry and a downtrend in local vehicles exports. On the other, there are some positive signs to be considered, such as the possibility of an investment grade by Standard & Poor's, which would bring benefits to all sectors.

The NAPM (National Association of Purchasers and Managers) report to be released next March 1 will let us know of the upcoming U.S. economic trends and how they may affect Mexican markets. Investors might therefore want to consider short-term investments in the following days until a bull market develops.

GENIE IN A BOTTLE

The bottling industry has been moving strong thanks to Coca-Cola FEMSA, which has undertaken two important mergers with other bottle industrials. FEMSA is therefore growing and bound to grow its sales. The mergers will also increase stock value for shareholders, positioning the company as the biggest of its type in Mexico and projecting an US$80-million investment in the region throughout the current year.

Among the company's objectives is to improve its distribution, information systems and value. Current trading value is at around 28.59 pesos per share with a 49.86-peso high and a 24.60-peso low. Femsa is considered to be a solid company with high grades and has the capacity to pay its debts on time.

NOT SO SLIM

Other short-term attractions are Carlos Slim's telecommunication companies, namely America Movil (AMXL). The company's introduction on the BMV (Mexican Stock Exchange) and the NYSE (New York Stock Exchange) has been much talked-about, starting with a 10.52-peso bid value as a high and a 9.68-peso low, and operating around 10.36 pesos. The company controls stakes in telecom companies in seven different nations on the continent: Argentina, Brazil, Ecuador, Guatemala, Mexico, Puerto Rico, and the United States.

With 12 million subscribers and 100% growth each year on Mexican soil, the company's stated goal to "dominate the market" is no understatement. Every Telmex shareholder is entitled to receive an America Movil share for each corresponding AA,A or L series Telmex share. The new company already has around 30.7 billion pesos in active assets and 17.5 billion pesos in liabilities.

High revenues are to be expected in the short-term that in no way will affect the growth of Telmex, which recently issued a billion-dollar bond. Slim still knows how to bring interest to his companies, but a not-so-positive development has been CompUSA's legal quarrel in Dallas, Texas with Coc Services. CompUSA lost the first battle in court and has been ordered to pay US$454.5 million to settle charges over the obstruction of its introduction to Mexico. The verdict is not yet final, however, as Slim is expected to appeal. The ruling has not yet affected America M6vil's market value.

FORD

Although vehicle exports have been low of late, local sales are at good levels. The recent financial movements of Ford are particularly interesting. The company has issued 1.2 billion pesos in bonds (FORD01) with 100 pesos per coupon. The initial date is Feb. 1, 2000 and they mature July 30, 2004. The Standard & Poor's credit rating for the issue was "mxAAA," reflecting Ford's extremely high payment possibilities. The annual corporate return rate considered is 16.80%, and payments will be held on the first day of each semester. JP Morgan was the issuing bank for this operation.

Rafael Olvera S. is an independent financial consultant.

                       America Movil in the Americas
USA
Topp Telecom  97%
Comm South    97%
Prodigy       10%
CompUSA       49%
Mexico
Cable T.V.    49%
Telcel       100%
Guatemala
Telgua        86%
Puerto Rico
of CCPR       50%
Ecuador
Conecel       60%
Brazil
ATL           25%
Argentina
Techtel       60%