TV Azteca SAB, the Mexican broadcaster controlled by billionaire Ricardo Salinas, fell the most in three months after the country’s exchange said the stock would be removed from the benchmark index next month.
Azteca, Mexico’s biggest broadcaster after Grupo Televisa SAB, fell 5.8 percent to 5.81 pesos in Mexico City trading, the biggest one-day drop since April 24. The IPC index of 35 Mexican companies rose 0.6 percent.
Salinas, 57, whose net worth is estimated at $10.8 billion, sued the exchange last year after it said that another of his companies, retail and banking company Grupo Elektra SAB, would be removed from the index because of a methodology change. A Mexico City judge temporarily blocked the exchange from applying the change to Elektra, keeping it in the index.
Azteca’s retreat today is mainly due to the latest IPC changes, Aldo Miranda, a trader at Intercam Casa de Bolsa SA in Mexico City, said in an e-mailed response to questions.
“The name is not that liquid, so outflows have a bigger impact,” he said.
Some investment funds buy shares in benchmark indexes to try to replicate or beat their performance, so shifts in the gauge can lead to inflows or outflows from the affected stocks.
Azteca is one of five companies leaving the market-capitalization weighted index as part of an annual review of the gauge, according to the statement yesterday from the exchange, Bolsa Mexicana de Valores SAB. Other companies slated for removal include billionaire Carlos Slim’s precious metals miner, Minera Frisco SAB, and three homebuilders whose shares have tumbled following a government housing-policy shift.
Dan McCosh, a spokesman for Mexico City-based TV Azteca, declined to comment on the IPC removal. Roberto Gavaldon, a spokesman for the stock exchange, said the decision reflects a predetermined formula.
Azteca has fallen 31 percent this year. Its average daily volume over the past six months was 3.3 million shares, 19th among the IPC’s 35 companies, according to data compiled by Bloomberg.
The Bolsa has said its methodology changes last year were part of efforts to refine the IPC. Members are selected based on a formula that takes into account trading activity, market capitalization and the percentage of shares that are freely traded, according to the exchange.
Most of Elektra’s shares are held by Salinas, while others are tied up by equity-swap contracts that allowed the company to bet on its own shares, according to an annual report. Salinas is the world’s 99th richest person, according to the Bloomberg Billionaires Index.
According to Elektra’s lawsuit last year, the changes were tailored to assure its exit after an index-topping rally in 2011. The stock more than doubled that year, pushing its price to 42 times trailing earnings before interest, taxes, depreciation and amortization.