Bloomberg News

Walmex Bribery Case Proving Boon for Slim: Chart of the Day

May 03, 2012

The bribery allegations that have sparked a rout in Wal-Mart de Mexico SAB are also spurring a rally in America Movil SAB, the wireless carrier controlled by billionaire Carlos Slim.

The CHART OF THE DAY shows the 30-day correlation coefficient between the two stocks turned negative on April 23, when Walmex sank 12 percent, the most since 1998, on allegations described in a New York Times story that its executives bribed Mexican officials. America Movil is one of the few actively traded shares in Mexico, making it a likely recipient of money that investors pulled out of Walmex, according to Greg Lesko, who manages $700 million at Deltec Asset Management.

“As people were selling their Walmex because of this bribery scandal, the money had to go somewhere,” Lesko said in a telephone interview from New York. “It seems that money was flowing into America Movil.”

Before reports of the allegations surfaced, Walmex and America Movil had a correlation coefficient as high as 0.7624 in the past year, with a reading of 1 indicating that the companies trade in lockstep. The correlation dropped to negative 0.46 yesterday.

America Movil, the largest mobile-phone carrier in the Americas, was the best performer on the benchmark IPC index after the Times’s report, which the company says it is investigating. It gained 2.9 percent that day and another 10 percent since while Walmex has slumped 15 percent.

Slim’s wireless provider also got a boost on April 12, when billionaire Ricardo Salinas’s retailer Grupo Elektra SA (ELEKTRA*) plunged 18 percent on concern stock-market rule changes governing the treatment of derivatives would threaten its position on the IPC. (MEXBOL) America Movil climbed 2.3 percent that session, compared with a 0.5 percent gain in the IPC.

To contact the reporters on this story: Jonathan J. Levin in Mexico City at; Veronica Navarro Espinosa in New York at

To contact the editor responsible for this story: David Papadopoulos at

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