Madrid, 7 (Europa Press)
Spain is the second largest global destination for Latin American investment, with a capital of, 42,663 million behind the United States, which adds up to, 61,104 million if you invest in companies you own, and averaged 3,800 million since 2010, according to the ICEX Global Lot 2020 report.
The report, co-hosted by ICX and the Ebero-US General Secretariat (CGIP), was presented this Wednesday by Maria Pena, CEO of ISEX Spain Exports and Investments, and Rebecca Greenspan, CGIP General Secretary.
The study confirms that Spain is a long-term investment destination for Latin American capital and is used by many Latin American companies as a gateway to the European market, given its economic and institutional stability.
“Latin American companies are being called upon to play a key role in recovering from the Covit-19 epidemic, and there are many reasons to be optimistic,” said Rebecca Greenspan, secretary general of Ibero-US.
“One of them is a compelling innovation in the region during this crisis. From ‘e-commerce’ to ‘e-learning’, from telemedicine to teleworking, we have seen several months’ progress in a few months,” Greenspan explained. Another reason is that the epidemic has “accelerated green change”, leading companies in the field with great potential for expansion, and people are “aware and concerned about climate change”.
The report collects the impact of the epidemic on Latin American investment. In 2020, Spain received 968 million in investment from the region, which is 38.4% lower than the annual average of Latin American investment in Spain over the past ten years, which is estimated at 3.8 billion. However, this fall is less than what foreign direct investment (42%) has experienced globally.
Maria Pena, CEO of ICX Spain Exports and Investments, noted the random behavior of investment in various Latin American countries, while recognizing that “there are not many investment activities of Latin American companies”. Canceled, but they are pending to look at the economic evolution and health situation in this 2021 “.
The analysis shows a large discrepancy between manufacturing investment data with investment activities held by companies of Latin American descent, which is in Spain. In 2020, this type of activity grew by 152% compared to 2019. According to the report, this high performance of the financial flow in holding companies reflects Spain’s growing importance as a gateway for third – place, especially European, Latin American investment.
The best investments of the infectious year include the expansion of investment activities of Argentine technology company Globant, Brazilian financial services company IG4, Brazilian financial institution Creditas or Argentine software development company Veritron.
According to the report, Latin American investments in the world showed a significant decline during the Govt-19 era, although there were significant differences in the country.
Companies in the region currently hold $ 765,000 million (over 0 640,000 million) in investment shares beyond their borders. It should be noted that since 2011, against the backdrop of weak economic growth in the region, there has been a significant increase of 69% in Latin foreign direct investment in the world.
By 2020, despite the complex international environment, Latin America being one of the worst-affected regions, large Latin American companies showed a significant potential for regression in terms of their foreign expansion, although the country had very significant differences.
Foreign direct investment (FDI) inflows by the region fell by 90%, but this decline is mainly explained by the modification of profits of Brazilian companies, without which the report estimates that the fall would have been only 2% compared to the previous year.
Apart from the fall in foreign investment provided by Brazil in 2020 (-174% on an annual basis), it is also significant in Peru (-56%) and Colombia (-39%). In other major countries in the region, such as Argentina (-21%) or Chile (-15%), the fall was modest.
In contrast, the investment provided grew in 2020 (55%) compared to 2019 in Mexico. However, the study warns that the data should be interpreted with caution because large companies are forced to postpone their expansion processes while waiting for health institutions to be established.
As a positive sign, it can be seen that the ability of companies to finance themselves in the markets is rarely affected, which will allow them to carry out investment projects that have been put on hold during epidemics.
Since 2014, the economic recovery has clearly stimulated the process of internationalization of Latin American companies, which peaked in 2019, the year before the epidemic, when Latin American foreign direct investment (FDI) was $ 43,253 million (above 36 36,300 million).
This is the main geographical destination for Latin American investment. In 2020, by contrast, the percentage of investment projects outside Latin America was 57%, twenty points higher than in previous years.
In terms of sectors, this behavior was very inconsistent in 2020. Investment in mining, construction or retail shrank, while it increased in logistics and transportation, business services, marketing and other services and research and development.
On the other hand, in addition to companies in the region, many of them specialize in raw materials and public contribution, we have seen an increase in other types of investment in recent years. In this context, the Global Latum Report was the first to internationalize technology private equity funds (‘venture capital’) from the region.
Over the past 20 years, these investors have made overseas operations worth $ 11,500 million (9 9,670 million), with 85% of operations accumulated over the past six years. These investments have been sent mainly to the United States and to a lesser extent to Europe.