Barrons and Bloomberg Businessweek reported Tuesday that shares of Maxcom Telecomunicaciones and Megacable Holdings SAB rose following outgoing President Felipe Calderon’s proposal to lift caps on foreign investment in some of Mexico’s businesses.
“Maxcom, the nation’s fifth-largest landline phone carrier, gained 6.3 percent to 3.56 pesos at 10:41 a.m. in Mexico City after earlier reaching 3.59 pesos,” reported Bloomberg on October 3. “This is the highest intraday price since Feb. 22. Megacable, Mexico’s biggest cable company, rose 1.6 percent to 30.50 pesos, which is the highest since Feb 15,2011.”
Although Calderon’s administration has not yet confirmed which industries his new proposal will affect, the nation’s antitrust and telecommunications regulators have already called for the elimination of an existing 49 percent limit on foreign ownership in landline telecommunications companies. This measure is expected to encourage additional competition in the sector.
In addition, a 25 percent cap on domestic airline stakes would be revised, as would an existing law that forces the country’s broadcasting services to remain entirely under Mexican control.
“In the coming weeks we’ll announce the type of initiatives we’ll be promoting,” shared Mexico’s Deputy Economy Minister Jose Antonio Torre in a transcript of a presentation from Sept. 30. “It would be a bill that would reform the Foreign Investment Law that would lift some caps in some sectors.”
The new developments are expected to have a positive effect on investment potential throughout the country, including Mexico real estate. According to Torre, Mexico’s Economy Ministry is currently inclined to increase the airline industry’s foreign investment cap to 49 percent, which is a bold move toward the type of reforms that will continue putting Mexico ahead of the game on an international level.
“It’s a sector that demands high investment in capital,” Torre stated according to Bloomberg. “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.”