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Global FDI flows rise 11pc

Islamabad: Global foreign direct investment rose by 11 per cent in 2013 to an estimated $1.46 trillion, up from a revised $1.32tr in 2012, while FDI flows to developing economies reached a new high of $759 billion, accounting for 52 per cent of global FDP inflows in 2013, Unctad announced on Tuesday.

According to the ‘Global Investment Trends Monitor’ the total inflows to developing Asia as a while amounted to an estimated $406bn in 2013, at a level seminar to 2012.

With inflows to China at an estimated $127bn including both financial and non-financial sectors, the country again ranked second in the world, closing the gap with the United States to some $32 billion, the UN Conference on Trade and Conference report says.

West Asia is the only region to see a fifth consecutive decline in FDI in 2013, dropping by another 20pc to $38bn.

The region’s two main recipients Saudi Arabia and Turkey both registered significant FDI declines of 19pc to $9.9bn and 15pc to $11bn respectively. Turkey witnessed virtually a total absence of large FDI deals.

The FDI flows could rise further in 2014 and 2015, to $1.6tr and $1.8tr respectively as global economic growth gains momentum.

Activity is expected to improve further in 2014 and 2015, largely on account of recovery in developed economies. Those improvements could prompt transnational corporations (TNCs) to gradually transform their record levels of cash holdings into new investments.

Developing economy mergers and acquisition sales’ value in 2013 increased by 64pc to $88bn, bouncing back to their pre-crisis levels.

Almost 68 per cent of the acquisitions were from other developing countries.

The value of greenfield projects continued to decline in 2013, although only minimally, by 1.7 per cent from the previous year.

A 17pc decrease of project values in developed economies was counterbalanced by a few developing countries that saw announced greenfield activity increase.

Expectations of a rebound in cross-border mergers and acquisitions (M&A) activity in 2013 did not materialise as TNCs maintained a cautious approach.

The value of cross-border M&A sales increased only modestly by 5 per cent to reach $337 billion in 2013.

Cross border sales in developed countries decreased by about 10 per cent on both sides of the Atlantic. However, there are signs that confidence is returning in Europe.

 

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