Axtel Snaps Slump as Santander Damps Concern: Mexico City Mover
Axtel SAB (AXTELCPO), Mexico’s second-largest land-line phone carrier, posted its first advance in eight sessions after Banco Santander SA downplayed speculation that a recent Supreme Court decision could cost the company money.
The stock rose 1.9 percent to 4.37 pesos at 3 p.m. local time in Mexico City trading, breaking the longest streak of consecutive declines since the period ending Nov. 25.
While Axtel lost a court ruling this week, it was the first in a series of similar decisions and is itself unlikely to cost Axtel money, Santander said in a research note dated today.
Press reports sent the “wrong message” about the decision, according to Santander. “Axtel owes 1.5 billion” pesos, said a headline yesterday in Mexico City newspaper Reforma, while daily El Universal wrote that the Supreme Court’s decision “represents risks for Axtel.”
“Any stock price weakness that might occur as a result of these local reports could make the stock more attractive,” Santander analysts led by Gregorio Tomassi said.
Axtel shares lost 16 percent in the seven sessions through yesterday, while the benchmark IPC index of 35 Mexican companies slipped 1.3 percent.
Mexico’s Supreme Court is reviewing four cases involving the fees Axtel had to pay dating back to 2005 to connect calls to the clients of mobile-phone companies. The cases will determine whether Axtel overpaid or underpaid for those fees by reviewing the methodology government regulators used to determine the rates.
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