Shares of Mexican tycoon Carlos Slim’s phone giant America Movil fell almost 5 per cent on Friday, a day after a congressional committee passed an ambitious bill that aims to loosen his hold on the telecommunications market.
The reform, hailed as the biggest shakeup of Mexico’s telecoms and television market in decades, is aimed at spurring foreign competition and will give regulators the power to force companies to sell assets if they have more than 50 per cent of the market.
Late on Thursday, the lower house committee for constitutional matters passed the bill with no changes, and it is expected to be presented to the floor of the house for a vote next week. If approved, it will then head to the Senate.
Lawmakers in President Enrique Pena Nieto’s Institutional Revolutionary Party (PRI) have said they are confident the bill will pass Congress before the end of April.
Shares of America Movil fell as much as 4.87 per cent to 11.53 pesos (93 cents U.S.) their lowest since April 2009.
“It’s falling hard, aggressively and I don’t doubt that there are people shorting the shares,” said Gerardo Roman, head of trading at Actinver brokerage in Mexico City.
The stock has fallen sharply since Mr. Pena Nieto unveiled the bill on Monday. It tumbled nearly 8 per cent on Wednesday alone, which wiped out almost $5-billion of its market value.
The shares broke their losing streak on Thursday, aided by aggressive buying by the company’s treasury, which purchased 150 million shares for a total of 1.837 billion Mexican pesos ($147.71-million), according to two filings with Mexico’s stock exchange.
Mr. Slim, the world’s richest man, controls some 70 per cent of Mexico’s mobile market and 80 per cent of its fixed phone lines. Mexican TV giant Grupo Televisa, controlled by Emilio Azcarraga, has just under two thirds of the broadcasting market.
Since the start of the week, America Movil’s stock has lost some 13 per cent, and it’s down more than a fifth in the year to date. It also suffered last month when the company released fourth-quarter results that fell far short of expectations.
The company has lost about $19-billion year-to-date in market value, although it remains Mexico’s biggest company with a market cap of about $71-billion.
The share fall has wiped more than $7-billion from the holdings of Mr. Slim and his family so far this year.
As of March, Forbes estimated the Slim family’s wealth at around $73-billion, $6-billion more than U.S. billionaire Bill Gates.
Since the start of the month, the Slim family and its trust are worth about $4-billion less due to the decline in America Movil’s fortunes, according to Reuters calculations on Friday.
Shares of Televisa have also taken a hit from the planned reform, albeit to a lesser degree. They fell about 1 per cent on Friday.
Shares in TV Azteca, which has most of the rest of the Mexican market, were down by 2 per cent.