Mexico will reportedly receive a record amount of foreign direct investment (FDI) dollars this year,according to the Wall Street Journal. In fact,Mexican President Enrique Peña Nieto announced last week that his administration expects to see between $35 and $40 billion in new investment dollars from foreign companies this year.
“FDI is an important indicator of companies’ confidence in a country’s risk profile,” writes the International Business Times. “Mexico’s high rate of FDI so far this year indicates that investors are more confident in the Mexican economy.”
According to the report,about 60 percent of the FDI pouring into Mexico during the first quarter of 2013 went into the nation’s booming manufacturing sector,while around 18 percent went to support the commercial and retail sectors. Major investors this year include Danish toy maker Lego at $125 million,Mondelez International (formerly Kraft Foods) at $600 million and various companies associated with the aerospace industry at more than $200 million. In addition,General Motors will invest more than $690 million,while vacation provider Apple Leisure Group recently announced a $600 million investment plan.
Furthermore,data from the Banco de México,which is the nation’s central bank,shows that foreign investors have increased and held their Mexico bond positions steady in recent months,totaling a rise of more than 6.4 percent over the total at the end of 2012. In fact,according to the Financial Times,one of the things that has made Mexico so attractive is the nation’s growing role as a leading international exporter – and today’s numbers are expected to double over the next decade.
Also of note,in late June Mexico’s stock market realized the largest weekly gain since 2009,as the IPC index grew by more than 6.8 percent. Winners included the MSCI Emerging Markets Index,which rose by 4.4 percent,as well as Homex and Corp. Geo,which rose 16 percent and 14 percent on the week,respectively.
In other encouraging market news,Evercore Mexico Capital Partners raised $201 million for its new EMCP III fund,via a wide variety of contributions from both institutional and private investors. The fund plans to seek out opportunities that will allow investors to cash in on Mexico’s rapidly growing middle class and very stable macroeconomic environment. In addition,construction company OHL Mexico raised more than $525 million in an offering this June,while Mexico real estate firm Corporacion Inmobiliaria Vesta raised nearly $195 million in a follow-on offering last month. Finally,Zacks Equity Research has named Homex,Grupo Aeroportuario del Pacifico,America Movil,MDC Holdings and Cemex as its top Mexican stock picks at this time.