MEXICO CITY America Movil, the company owned by billionaire Carlos Slim, shed almost $5 billion in market value on Wednesday as its shares slid for a third day after the government proposed an overhaul of the nation's phone and television industries to weaken Slim's dominance.
The sweeping reform bill, presented by President Enrique Pena Nieto, could end broadcaster Televisa's rule of the airwaves as well as Slim's stranglehold on the phone business.
The revamp would permit more foreign ownership of media and phone companies and give regulators the power to compel players controlling more than 50 percent of the market to sell assets, allowing for more competition.
Slim, the world's richest man, controls about 70 percent of Mexico's mobile market and 80 percent of its fixed phone lines.
America Movil (AMXL.MX) (AMX.N) shares shed 7.79 percent to hit 11.83 pesos, the lowest closing price since June 2009. The shares on Wednesday fell as low as 11.75 pesos. The stock, which had tumbled after the company reported disappointing quarterly results last month, has lost around a fifth of its value in the year to date, despite aggressive share buybacks by the company.
The bill on reforming the phone and television industries, backed by the heads of Mexico's main political parties, arrived in Congress on Tuesday. Members of the ruling Institutional Revolutionary Party say they are confident it will be approved in Congress by May.
Speculation that the approval process will be smooth and swift has put additional pressure on America Movil, analysts said.
"It looks like the reform could come (into effect), and America Movil could be more strictly regulated sooner than expected," said Valeria Romo, analyst at brokerage Monex in Mexico City.
The slump in America Movil shares weighed on Mexico's IPC stock index .MXX, which fell 1.56 percent.
America Movil shares could fall further in the medium term to between 10 and 11 pesos, analysts at Monex wrote in a report. In the short term, the shares could find a level of support between 11.70 and 12 pesos, the analysts said.
Shares of Televisa (TLVACPO.MX) (TV.N), the world's biggest Spanish-language content producer, fell 2.21 percent to 66.07 pesos. The company is believed to control three-fifths of Mexico's broadcast market.
Previous Mexican governments have failed to rein in the power of the huge telecommunications companies, and the reform bill still faces a number of hurdles before it can become law.
America Movil continued to buy back shares this week, but the purchases did not stem the slide in the share price.
The company on Tuesday executed its biggest one-day buyback this year, buying back 75 million shares, but the share price closed down 2.43 percent at 12.83 pesos.
The company spent a total of 1.6 billion Mexican pesos ($128.55 million) Monday and Tuesday on share purchases, buying back 125 million shares, according to stock exchange filings.
Since reporting weak fourth-quarter results on February 12, the company has spent 5.286 billion pesos buying back shares. Its shares have fallen more than 23 percent since then.
America Movil's buyback fund was at 43.938 billion pesos after Tuesday's stock purchases.
The yield curve on America Movil debt has widened about 10 basis points since the reform was proposed, although so far it is not seen affecting debt pricing for the company, a frequent issuer, IFR reported.
The yield on the company's bonds expiring in 2022 traded at around 145 basis points to 140 basis points, about 4 basis points wider on Wednesday.
(Reporting by David Alire Garcia, Alexandra Alper, Elinor Comlay and Noe Torres; Editing by Maureen Bavdek, Bernadette Baum and Leslie Adler)