Maxcom, Megacable Gain on Foreign-Investment Cap Proposal
(Corrects date of minister’s presentation in fourth paragraph of story published Oct. 3.)
Maxcom Telecomunicaciones SAB and Megacable Holdings SAB rose as outgoing President Felipe Calderon’s administration assembles a proposal to lift caps on foreign investment in some Mexican businesses.
Maxcom, the nation’s fifth-largest land-line phone carrier, gained 6.3 percent to 3.56 pesos at 10:41 a.m. in Mexico City after earlier reaching 3.59 pesos, the highest intraday price since Feb. 22. Megacable, Mexico’s biggest cable company, rose 1.6 percent to 30.50 pesos, the highest since Feb. 15, 2011.
While the administration hasn’t confirmed which industries the proposal will address, Mexico’s antitrust and telecommunications regulators have both called for the elimination of a 49 percent limit on foreign ownership of land- line telecommunications companies to encourage competition. The current law also includes a 25 percent cap on domestic airline stakes and says broadcasting services must be exclusively under Mexican control.
“In the coming weeks we’ll announce the type of initiatives we’ll be promoting,” Deputy Economy Minister Jose Antonio Torre said, according to a transcript of a presentation given Oct. 1. “It would be a bill that would reform the Foreign Investment Law that would lift some caps in some sectors.” He declined to name specific industries the proposal would target.
The Economy Ministry favors increasing the airline industry’s foreign investment cap to 49 percent, Torre said.
“It’s a sector that demands high investment in capital,” he said. “Planes are a very significant investment, and we think loosening this limitation that exists today in the law of up to 25 percent is important.”
Grupo Aeromexico SAB (AEROMEX*), the only publicly traded Mexican airline, fell 0.6 percent to 19.87 pesos.
A press official in Calderon’s office who asked not to be named because he wasn’t authorized to speak on the record declined to comment.
Attempts in the Senate to lift the cap on foreign investment in land-line phone companies have failed as recently as last year because of disputes on whether to require investors to come from countries with similarly open rules.
America Movil SAB (AMXL), owner of Mexico’s largest land-line phone network, slid 0.6 percent to 16.45 pesos. The second- biggest carrier, Axtel SAB, rose 4 percent to 3.15 pesos.
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