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| Mexico's Stocks Open Lower On America Movil; IPC Off 0.5% |
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| Thursday, 14 January 2010 14:12 | |
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MEXICO CITY (Dow Jones)--Mexico's benchmark stock index opened lower Thursday, due almost entirely to a sell-off in the shares of wireless operator America Movil (AMX, AMX.MX) after the company unveiled plans to make an offer for Carso Global Telecom and Telmex International.
Around 10:45 a.m. EST, the local IPC index of 35 most-traded issues was down 0.5% at 32,662.78 points. Volume was a strong 114.3 million shares worth 3.05 billion pesos ($239.4 million). America Movil, by far the market's heaviest issuer and the biggest telecommunications operator in Latin America, saw its locally traded L shares down 5.1% at MXN30.16. Volume was 60.1 million shares worth MXN1.82 billion. The company said Wednesday after markets closed that it will offer 2.0474 America Movil shares for every share held in Carso Global Telecom (TELECOM.MX). If shareholders agree, it would give America Movil an indirect 59.4% stake in Mexico's leading fixed-line company, Telmex (TMX), and 60.7% of Telmex Internacional (TII). The move would consolidate companies controlled by local business tycoon Carlos Slim, one of the world's richest men, to create a regional telecommunications behemoth with 250 million service subscriptions. Analysts were generally blindsided by the move, which would result in Telmex Internacional being delisted from the local stock exchange. Assuming a successful transaction, Morgan Stanley said in a report that America Movil shares should benefit in the medium to long term. "We think this transaction makes strategic sense for America Movil," the bank said. "Formally combining its operations with Telmex International would allow both companies to leverage each others' networks, reducing operating expenditures and capital expenditures." In the short term, however, Morgan Stanley said it expects America Movil's share price to go down because the firm would pay a premium for shares of the companies it acquires. Also, the transaction would slightly dilute the value of America Movil shares, the bank added. Telmex L shares were 0.2% lower at MXN10.65, while Telmex Internacional shares were 2.5% higher at MXN11.68. Other local stocks were mixed. Cement maker Cemex (CX, CEMEX.MX) CPO shares were down 0.3% at MXN15.36, while copper miner Grupo Mexico (GMEXICO.MX) B shares traded 1.2% higher at MXN31.64 and retailer Wal-Mart de Mexico (WMMVY, WALMEX.MX) V shares rose 0.6% to MXN61.44. Mexico's peso softened against the dollar, possibly affected by an unexpected drop in U.S. retail sales in December, as the U.S. is the main market for Mexican exports. The peso was quoted in Mexico City trading at MXN12.7525 to the dollar, compared with MXN12.7080 at Wednesday's close. Prices fell in the secondary market for local government debt, pushing yields higher. The yield on 10-year bonds due 2017 was up 2 basis points at 7.78%, while the yield on 20-year bonds due 2024 was up 3 basis points at 8.19%. -By Paul Kiernan, Dow Jones Newswires; (5255) 5980-5178, This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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| Last Updated on Thursday, 14 January 2010 14:15 |
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