(Corrects analyst's price target to 780 from 700 pesos)
MEXICO CITY, April 11 Members of Mexico's
association of brokerages last week asked officials from the
country's stock exchange to look into a recent surge in the
stock price of banking and retail company Elektra,
according to three members of the group.
Shares of Elektra, which runs appliance stores that have
banking and money transfer businesses, are up more than 166
percent so far this year, trading at a five-year high of 701
pesos per share, compared to a 9 percent gain in Mexico's IPC
The jump has more than doubled the company's market
capitalization since the end of February to nearly 164 billion
pesos ($8.7 billion), according to Reuters data.
Members of the analysis committee of the Mexican Association
of Stock Institutions (AMIB) at a meeting on Thursday asked
representatives of the Mexican stock exchange to look into the
reasons behind the big gains in Elektra's stock price, according
to three people at the meeting, who asked for anonymity due to
the sensitivity of the matter.
The committee does not have any formal power to request
action from the Mexican exchange or the country's stocks
regulator, the National Commission on Banking and Securities
(CNBV). A CNBV spokeswoman declined to comment.
The Mexican stock exchange said it does not
comment on individual stock moves. Elektra referred to a recent
series of statements to the stock exchange in which the company
said it was not aware of the cause behind the price gains.
Martin Hernandez, an analyst at Signum, the only brokerage
covering the stock, said strong results since the fourth quarter
of last year were driving the gains, pointing to a drop in bad
loans by 50 percent to 3.4 percent of the company's portfolio.
On Wednesday he said he raised his price target to 780 pesos
from 530 pesos per share.
"If the first quarter report is better than expected, it
could go even higher," he said. Analysts who are not registered
to provide analysis on a stock cannot legally comment on its
Elektra is controlled by Mexican billionaire Ricardo
Salinas. Investors have been wary of Elektra since Salinas had a
run-in with the U.S. Securities and Exchange Commission in 2005.
Salinas withdrew Elektra and two other companies from their
New York listings in 2005, after he became a target in an SEC
fraud investigation. Salinas paid a $7.5 million fine to settle
that probe without admitting or denying any wrongdoing.
($1 = 18.7792 Mexican pesos)
(Reporting by Sheky Espejo and Michael O'Boyle; Editing by