November 25, 2013 / 4:00 PM / 4 years ago

CORRECTED-UPDATE 1-Flows into Mexico stocks, bonds rebound in 3rd quarter

(Clarifies deficit is accumulated in final paragraph)

MEXICO CITY, Nov 25 (Reuters) - Foreign investor inflows to Mexican stocks and bonds picked up in the third quarter as the Federal Reserve kept its monetary stimulus program unchanged, a Mexican central bank report said on Monday.

Foreign portfolio investment in Mexican stocks as well as corporate and government debt nearly doubled to just over $16 billion in the July to September period, the central bank said in a statement.

Net investments in Mexican stocks and corporate debt rose to $3.669 billion after market players had pulled out nearly a net $5 billion in the second quarter. Investments into peso-denominated government debt also rose.

Emerging markets around the world had suffered this year amid bets the U.S. Federal Reserve would cut back its bond-buying program this year. The Fed’s monetary stimulus has supported demand for riskier assets.

But investors piled back into Latin America’s second-biggest economy during the third quarter as expectations after the Fed surprised investors and did not cut back its bond-buying program aimed at keeping interest rates low in the United States.

Meanwhile, investment by foreigners in Mexican factories and businesses fell to $3.389 billion, down sharply from the second quarter when foreign direct investment (FDI) reached more than $18 billion due to beer giant Anheuser-Busch InBev’s acquisition of Grupo Modelo.

FDI was also down by about one-third from the third quarter of 2012.

The country’s current account deficit was $5.457 billion in the third quarter, widening slightly from the second quarter. The accumulated deficit for the first nine months of the year was the equivalent of 1.7 percent of gross domestic product. (Reporting by Michael O‘Boyle, Editing by W Simon)

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