Mexico City - Shares of Carlos Slim's phone giant America Movil rose on Thursday, helped by a local brokerage's upgrade of its recommendation and the company buying back what amounted to a quarter of all its shares traded during the day.
The shares fell sharply earlier in the week, after the Mexican government on Monday unveiled a plan to boost competition and foreign investment in the sector, rattling America Movil investors. Its shares tumbled nearly 8 percent on Wednesday alone, losing almost $5 billion in market value.
America Movil shares rose more than 4.5 percent in morning trading and ended the day up 2.45 percent at 12.08 pesos.
The shares dropped more than 1 percent at the start of Thursday trading, but then recovered on what analysts described as investors' eagerness to take advantage of Wednesday's massive slump and a recommendation upgrade by a local brokerage.
“Obviously, after such a strong drop and an upgrade recommendation to 'buy'... global clients are coming in strong,” said Jorge Nevid, head of trading at brokerage Accival in Mexico City.
Nevid was referring to Wednesday's upgrade by local brokerage Actinver, which argued that markets had “over-reacted” to the reform, which would take time to be implemented.
BIG STOCK BUYBACK
The shares also got a boost from aggressive purchasing by the company's treasury, which bought 75 million shares for a total of 916.6 million pesos ($73.55 million), according to a filing with Mexico's stock exchange.
That made up 25 percent of the total 295.6 million shares traded on Thursday, according to Reuters data.
Mexican President Enrique Pena Nieto's ambitious reform bill could end Slim's longtime stranglehold on the phone business as well as broadcaster Televisa's rule of the airwaves.
The bill has also hit shares of Televisa, which fell more than 1 percent early Thursday before paring losses to trade down 0.26 percent.
Hailed as the telecom sector's biggest overhaul in years, the government's plan would boost competition and give regulators the power to force television and phone companies controlling more than 50 percent of the market to sell assets.
Slim, the world's richest man, controls some 70 percent of Mexico's mobile market and 80 percent of its fixed phone lines, while Televisa has about 60 percent of the broadcasting market.
The bill was backed by the heads of Mexico's main political parties, and arrived in Congress on Tuesday. Members of the ruling Institutional Revolutionary Party say they are confident it will be approved in Congress no later than by May.
America Movil's recovery lifted Mexico's IPC index, which ended Thursday's session up 0.16 percent at 43,348.52, after closing at a three-month low on Wednesday. - Reuters