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Foreign Investors Flock to Latin America, Reuters Reports

17 December, 2012

According to Reuters, the amount of foreign investment dollars coming into Latin America’s largest economies including Mexico, has nearly tripled as investors buy up the nation’s stocks and bonds. $35 billion was recorded flowing into Mexico and other Latin American countries during the first quarter of 2012, followed by an impressive $34.7 billion in the third quarter. 

“Mexico recorded inflows of $24.1 billion in the quarter, mostly due to almost $15 billion in inflows to local bond markets where foreign holdings have hit record highs,” writes Reuters. 

The reality is that Mexico is making money for investors this year. For example, the nation’s stock exchange, known as the Bolsa Mexicana de Valores, is performing extremely well, lagging only behind Germany’s market on the world stage. Furthermore,Mexico’s market is up more than 20 Percent on the year and the nation is undeniably poised to emerge as the world’s next major manufacturing superpower. 

Already, companies such as Audi, Volkswagen, Honda, Pirelli, Hershey, Chrysler, Whirlpool, Nissan, Mazda and Rolls Royce, to name only a few, are either already operating facilities in Mexico or are working to build plants on newly purchased Mexico real estate. Since Mexico also has more free trade agreements with other countries than any other nation in the world, it’s easy to see why companies from around the world are quickly investing in new production facilities in Mexico.

Mexico is also the world’s most energy secure nations, according to a report published by the U.S. Chamber of Commerce this year which examined 25 of the world’s largest energy-consuming nations. In addition, Mexico earned more than $275 million in 2011 by exporting 80 percent of its goods to the U.S.; a number that is expected to increase as doing business in Mexico continues to become more affordable than China. The rising cost of wages and fuel, combined with the fact that goods take up to a month when coming into the U.S. from China, but only a few days from Mexico, make it easy to see why businesses and savvy individual investors have been making moves to cash in on this opportunity.

Topics: Investment Latin America