(Adds comment, details, updates prices)
By Gabriel Stargardter
MEXICO CITY, March 12 Shares of Mexican tycoon
Carlos Slim's America Movil telecom company
fell to their lowest since 2009 on Tuesday, the day after Mexico
presented a reform bill aimed at spurring competition in the
telephone and television sectors.
Shares of Televisa , the main Mexican
broadcaster, fell as much as 1.2 percent early on Tuesday but
recovered to trade flat by early afternoon.
The new bill aims to shake up the telecoms sector by
allowing increased foreign ownership of media and phone
companies, and giving regulators the power to make players
controlling more than 50 percent of the market sell assets.
Mexico's peso currency, which has been boosted by
expectations of economic reform, strengthened, trading at its
highest level since October 2011. Ratings agency Standard &
Poor's said the country's credit outlook had improved.
Slim, the world's richest man, dominates Mexico's
telecommunications market, controlling about 70 percent of its
mobile market and 80 percent of its fixed phone lines.
The planned reform has rattled confidence in America Movil,
which has already taken a hit over the past year from costly
investments in Europe, tougher regulation and disappointing
Earlier on Tuesday, Credit Suisse cut its rating on America
Movil stock from 'outperform' to 'neutral'.
Shares of America Movil, a one-time darling of investors in
Latin America's No. 2 economy, have trailed Mexico's benchmark
IPC index. The shares fell by as much as 3.2 percent on
Tuesday before recovering slightly.
The stock is down nearly 14 percent for the year and off
more than 30 percent since last May, raising awkward questions
about how the company will adapt to the changes required of it.
"We still don't know what they're going to have to lose,"
said Gerardo Roman, head of stock trading at Actinver brokerage
in Mexico City. "If they chop off 25 percent of their best
paying business then it would be horrible, it would ruin them."
America Movil's share price fell on Tuesday to its lowest
level since July 2009. Since then, the IPC stock index has risen
more than 85 percent.
Previous Mexican governments have failed to curb the
influence of the media and telecoms tycoons, and fomenting
competition in the sector is seen as crucial to unlocking the
nation's economic potential.
Televisa, the world's largest Spanish-language content
producer, is also in Mexican regulators' crosshairs.
President Enrique Pena Nieto said on Monday he wanted to
overhaul the telecommunications market as quickly as possible.
He enjoyed a fruitful relationship with Televisa while
governor of the State of Mexico between 2005 and 2011, and
critics accused him of being a tool of the broadcaster.
Lawmakers in Pena Nieto's Institutional Revolutionary Party
say he is determined to put pressure on Slim and Televisa.
Controlled by tycoon Emilio Azcarraga, Televisa says it has
about 60 percent of Mexico's broadcast market.
Both Televisa and America Movil welcomed the reform plans on
Despite the pressure on shares, Mexico's peso has reacted
positively to the new government's reform agenda, as well as
signs of economic improvement in the United States, Mexico's
main trading partner.
The peso traded at 12.446 per dollar on Tuesday afternoon.
Standard & Poor's meanwhile revised its sovereign foreign
currency credit outlook on Mexico to positive from stable,
citing government efforts to implement economic
America Movil shares were down 2.36 percent at 12.84 pesos,
while Televisa traded flat at 67.67 pesos per share.
(Additional reporting by Noe Torres; Editing by Dave Graham,
Nick Zieminski, Lisa Von Ahn and James Dalgleish)