In the telecoms sector, Merrill Lynch is recommending World Com, AT & T Wireless and SBC Communications as buys.

Given AT & T's asset base and growing cash flow, Merrill believes the company has ample financial flexibility to grow it's customer base and comfortably remain a solid tripe B credit.

In SBC, it looks for it's extensive portfolio of non-core European equity holdings to be used to finance expansion in it's core North American markets.