Slim's America Movil slumps on regulation worries
Stock Market Predictions
MEXICO CITY (Global Markets) - Shares in billionaire Carlos Slim's America Movil fell to their lowest price since March 2010 on Friday following a report that suggested a regulator might make the telecommunications firm cut fees in Mexico.
Shares in America Movil lost 4.01 percent to 28.67 pesos, their biggest one-day drop in 17 months.
Bloomberg News reported that Mony de Swaan, head of telecommunications regulator Cofetel, said America Movil could face "a mix of different measures having to do with fees, information and quality."
Bloomberg said regulations could affect America Movil's fixed-line unit Telmex but it did not provide any comment from de Swaan to substantiate the assertion.
Telmex shares fell 1.59 percent to 9.93 pesos.
Representatives of America Movil and Cofetel declined any immediate comment.
"America Movil is falling because the whole market is down and Mony de Swaan came out to say there could be new regulations," said Martin Lara, an analyst at brokerage Actinver in Mexico City.
Weak U.S. employment data weighed on the broader Mexican market. America Movil is the most liquid stock in Mexico and investors use it as a proxy for the market as a whole, Lara said.
Investors knocked down America Movil's share price in a double-digit rout since April after the Federal Competition Commission fined the company $1 billion for abusing its market position. Investors were concerned of further action by regulators.
The stock had recently found support just below 29 pesos.
Lara said the drop in its share price had exaggerated the potential impact of further regulations on America Movil's business.
"We like the stock at current levels and we do not think additional regulations will have a significant impact in the stock price," Lara said.
(Reporting by Michael O'Boyle, additional reporting by Tomas Sarmiento; Editing by Kenneth Barry)
