Bloomberg News

Mexico Exchange Said to Consider Asking for Elektra Stock Split

January 16, 2012

Jan. 13 (Bloomberg) -- Mexico’s stock exchange may ask Grupo Elektra SAB to make more shares available for trading after investors said there are too few in circulation, said a person familiar with the matter.

Bolsa Mexicana de Valores SAB may request that Elektra, the retail and banking company controlled by billionaire Ricardo Salinas, issue more shares or carry out a stock split, said the person, who asked not to be identified because he’s not authorized to speak publicly on the matter.

Elektra has soared 149 percent in the past 12 months, a rally that Citigroup Inc. said in a Jan. 4 report was fueled in part by the company’s equity derivatives transactions, which are causing a scarcity of shares. Mexico’s benchmark IPC index fell 4 percent over that time. Bolsa Mexicana Chief Executive Officer Luis Tellez said that the exchange is in discussions with Elektra and declined to provide more information.

“We are aware of the Elektra problem,” Tellez said in a Jan. 11 interview in Mexico City. “We are talking to them about it.”

An Elektra official who asked not to be identified in accordance with company policy declined to comment.

Guillermo Babatz, president of Mexico’s securities regulator, said his agency is deferring to the exchange’s review.

“We are concerned about the matter,” Babatz said in an interview yesterday.

Elektra fell 6.6 percent today to 1,249.52 pesos in Mexico City, the biggest decline since Sept. 20. The benchmark IPC index dropped 2.1 percent.

--Editors: David Papadopoulos, Lester Pimentel

To contact the reporters on this story: Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net; Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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