While São Paulo continues to attract the largest volumes of financial services foreign direct investment (FDI) in Latin America and the Caribbean, the region’s latest aggregate figure has plummeted from a year earlier. More than $285m reached São Paulo in the 12 months until the end of August 2015, compared with $1.97bn in the previous ranking, according to estimates by database fDi Intelligence.
Concerns over Brazil’s economy, corruption scandals and political uncertainty have dented the appeal of its main financial centre, as well as the general business environment. The only two investors in São Paulo were Visa International and Irish re-insurer XL Group.
Rio de Janeiro is tied with São Paulo for first position, with investments from Bank of America Merrill Lynch and US insurance group Prudential Financial for asset management centres. But unlike São Paulo, the latest FDI into Rio represents a vast improvement on its previous $53m.
Latin America’s other key international financial centre, Mexico City, has also lost ground in the ranking. It attracted $134m this year compared with $231m in the previous ranking and slipped to third place in the list.
Economic conditions have deteriorated badly for the whole of Latin America in the past year. Predictably, investment originating from the region has been muted. The best five performers in the most recent outward FDI ranking spent a total of $420m in foreign financial centres, less than half the investment generated by the previous top five. Quito leads the table thanks to Banco del Pichincha’s three expansion projects in Spain, estimated to be worth a total of $114m.
