Slim's Spinoff Telesites Drops After Debut as Analysts Say Sell

  • Shares lead decline on Mexico's benchmark IPC for a second day
  • Just one of five analysts in a Bloomberg survey recommend buy

Telesites SAB, the long-awaited spinoff from Carlos Slim’s America Movil SAB, is tumbling as a majority of analysts recommended selling the shares. The wireless-tower company started trading in Mexico this week.

Mexico City-based Telesites, created to manage the operator’s wireless towers amid rising pressure from regulators, led declines on the benchmark IPC for a second straight day. Telesites dropped 2.9 percent to 11.99 pesos on Wednesday in Mexico City.

Only one of five analysts recommend buying the shares while three recommend selling. Itau BBA projects shares will slide another 17 percent by the end of 2016 as both Slim’s tower operator and telephone company remain a target of regulators. Under the spinoff program, America Movil shareholders received Telesites stock, which began trading Monday at 12.9 pesos. Investors are selling the shares to meet composition requirements for their portfolios, said Rodrigo Alfaro, a portfolio manager at Black Wallstreet Capital in Mexico.

“The funds can’t have Telesites in their portfolios,” Alfaro, a money manager with the firm, said in an e-mail. “They need to sell it and make adjustments to re-balance positions so indexed funds are as they were before. There are a lot of them and they have to do it before the end of the month to avoid problems.”

Telesites became the 36th company on the IPC benchmark when it started trading this week. The spinoff has as many as 11,000 towers in Mexico, making it Latin America’s second-largest renter of tower space.

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