TMX ready to take-off? Message Board

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Non-Tech : TMX ready to take-off?

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To: md1derful who wrote (68)	5/5/1999 1:58:00 PM
From: Steve Fancy	Read Replies (1) of 92

RESEARCH ALERT-MSDW says sell YPF, buy Telmex Reuters, Wednesday, May 05, 1999 at 12:22 MEXICO CITY, May 5 (Reuters) - Morgan Stanley Dean Witter said on Wednesday investors should sell Argentina's YPF SA (BUE:YPF.B) (NYSE:YPF) because it expected Repsol's (MADRID:REP) bid for the oil firm to succeed and it recommended going further overweight in Brazil and Mexico. --MSDW strategist Ian Laming said in a research report investors should buy Mexican telecommunications firm Telmex (MEX:TELMEXL) (NYSE:TMX) and cement company Cemex (MEX:CEMEXB). They should also buy Brazilian telephone firm Telesp (SAO:TLPP4), utility Cemig (SAO:CMIG3) and brewer Brahma (NYSE:BRH) (SAO:BRHA3). --Laming said YPF had only a 5.0 percent upside potential in the absence of a bid. But he expected the Spanish firm's bid to succeed and that YPF would then come out of benchmark indices. He said he was bullish on Latin America and therefore did not want "a stock like YPF with capped upside." --"YPF is 5.5 percent of the total MSCI Latin America Free index so it could lead to a sharp fall in the Argentine weighting and and a large increase in the Mexico and Brazil weightings," he said. --As far as Mexico was concerned, Laming said the switch into Telmex and Cemex would take him 20 percent overweight in Mexico from 10 percent overweight previously. --"Asset allocation change is very focused on these two stocks only. This is not a general buy Mexico call." --The strategist was also taking his Brazil weighting to 20 percent overweight from 10 percent previously. He expected the benchmark Selic interest rate to reach 21 percent by year end, 9.0 percent inflation and "only very modest 0.9 percent recession." That was very good for Brahma while Telesp and Cemig were "obvious macro plays." mexicocity.newsroom@reuters.com)) -- Copyright 1999, Reuters News Service

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