Economic recovery provides investment impetus - UN

* FDI steadies in 4th qtr -- still half of early 2008 level

* M&A picks up in 1st qtr, but greenfield investment down

GENEVA, April 26 (Reuters) - Economic recovery and the revival in corporate profitability will add impetus to flows of foreign direct investment (FDI) in the coming quarters, a U.N. agency said on Monday.

But it would be premature to say that FDI is now on a strong rebound, the United Nations Conference on Trade and Development (UNCTAD) said in its quarterly Global Investment Trends Monitor.

Increases in FDI, on which many developing countries rely for growth, generally trails economic growth by at least two quarters, according to the agency.

Global investment flows fell by nearly two fifths last year, UNCTAD said in January. [ID:nLDE60H1AN]

The pick-up in the global economy since mid-2009 suggests that multinational companies may be returning to more ambitious international investment programmes, the latest report said.

One sign was a marked growth in cross-border mergers and acquisitions, which practically doubled in the first quarter of this year to almost $100 billion from the low levels of the previous quarter.

These included several mergers worth more than $3 billion in telecoms, pharmaceuticals and food, led by the $7.6 billion acquisition of Belgium's Solvay (SOLB.BR) by Abbott Laboratories (ABT.N) of the United States, UNCTAD added.

However, the number of investments in greenfield projects fell slightly to about 3,000 in the first quarter, indicating that multinationals remain cautious about international investments and that there is no clear FDI trend, it said.

The level of FDI flows stabilised in the fourth quarter of last year, with UNCTAD's quarterly FDI index at 117.4 after 117.5 in the third quarter and still almost half the 218.5 seen in the first quarter of 2008 before the crisis burst.

Only a few economies, including China, Hong Kong, Ireland and Norway, received more FDI inflows in the fourth quarter of 2009 than on average in 2007, the report said. (Reporting by Jonathan Lynn; Editing by Mark Heinrich)