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 (BestGrowthStock) – 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.

Stock Market News

(Reporting by Jonathan Lynn; Editing by Mark Heinrich)

Economic recovery provides investment impetus – UN