Elektra Remains on Mexico IPC Index on Injunction

Grupo Elektra SA, the Mexican retail and banking company controlled by billionaire Ricardo Salinas, will remain on the benchmark IPC index after obtaining a court injunction forcing the stock exchange to use an older methodology to determine its weighting.

Elektra’s weight on the index will decline to 2.04 percent from 2.09 percent when changes are adopted Sept. 3, stock exchange operator Bolsa Mexicana de Valores SAB said yesterday in a filing. The Bolsa didn’t say whether Elektra would have remained on the index under the new methodology, which accounts for shares that are restricted by derivative contracts.

Salinas’s company is suing the Bolsa for unspecified damages after the exchange operator’s announcement of a new methodology on April 11 led to a drop of as much as 68 percent in Elektra shares. Investors including Van Eck Associates and Intercam Casa de Bolsa SA said then that the new rules had cast doubt on Elektra’s ability to remain on the index.

Elektra had derivative contracts tied to its stock price representing about 14 percent of its shares as of June 19, down from about 23 percent at the end of 2010. Salinas and his family controlled 70.5 percent of Elektra’s shares at the end of last year.

The Bolsa’s new rules specify that to be included in the IPC, a company must have 12 percent of its outstanding shares freely traded, not held by a controlling shareholder or withheld from trading because they are being held as a hedge in a derivative contract.

Dan McCosh, an Elektra spokesman, declined to comment.

Share Performance

Elektra rose 0.3 percent to 617.31 pesos yesterday in Mexico City before the IPC changes were announced. The shares are down 51 percent from their closing price on April 11, having recovered from a low of 408.79 pesos on June 18.

The Bolsa did apply its new methodology to the other stocks in the IPC. Consorcio Ara SAB, Controladora Comercial Mexicana SAB, Axtel SAB and Organizacion Soriana SAB will leave the index, while Grupo Financiero Inbursa SAB, Alpek SAB, Industrias CH SAB and Coca-Cola Femsa SAB will join, the Bolsa said.

Of the remaining 31 stocks on the index, only three will increase their weighting: America Movil SAB, Wal-Mart de Mexico SAB and the Bolsa itself.

Genomma Lab Internacional SAB’s weight will be little changed at 0.99 percent, Grupo Aeroportuario del Pacifico SAB, which will decline 35 percent to 0.61 percent, according to today’s filing and to data compiled by Bloomberg.

(Corrects to show Genomma Lab weight is little changed.)
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