MEXICO CITY Aug 23 Foreign direct investment in
Mexico nearly quadrupled in the second quarter, thanks to the
purchase of brewer Grupo Modelo, but financial investments
suffered as investors yanked billions from the corporate debt
and stock markets.
Foreign investment in Mexican stocks and corporate debt
registered a negative $4.941 billion in the second quarter. That
compared with a positive inflow of $29 million in the first
quarter, central bank figures showed on Friday.
The withdrawals helped push total portfolio investment down
to a negative $9 million, well below the $13.2 billion in net
inflows during the prior three months.
By contrast, foreign direct investment (FDI) reached $18.29
billion in the April-June period, boosted by Belgian-based beer
giant Anheuser-Busch InBev's acquisition of Grupo
Modelo, which went through at the end of May.
The FDI figure was nearly four times above the $5.56 billion
recorded in the prior quarter.
The manufacturing sector, which has been struggling under
weaker U.S. demand, received the bulk of the FDI in the first
Fears of a wind-down in Federal Reserve monetary stimulus -
which could weaken the peso and boost import prices - has
dampened investor interest in emerging market assets.
Optimism about President Enrique Pena Nieto's reform agenda
had bolstered investment in Mexico, but the government cut 2013
growth forecasts to 1.8 percent from 3.1 earlier this week,
after data showed the economy contracted in the second quarter.
The fading interest was reflected in a sizeable decrease in
investment in government debt. Flows into peso-denominated bonds
reached $1.75 billion in the quarter, well below the $9.34
billion invested in the first quarter.
The data also showed Mexico's current account deficit
widened to $6.01 billion in the second quarter from
5.32 billion in the first, bringing the deficit to 1.8 percent
of gross domestic product in the first half of this year