U.S. Markets closed

Emerging markets take record share of FDI inflows in H1 2013 - UNCTAD

LONDON (Reuters) - A record share of foreign direct investment flows went into emerging markets in the first half of 2013, while Britain became the world's largest recipient of FDI, a UN survey released on Thursday showed.

Global FDI flows rose 4 percent in the first half of 2013 compared with 2012, to around $745 billion (464.1 billion pounds), according to the survey by the United Nations Conference on Trade and Development (UNCTAD).

Emerging market stocks have lagged developed markets this year. But many of these markets are rich in resources, while growing domestic consumption is also attracting investment.

Flows to developed markets declined, but emerging markets took more than 60 percent of the total inflows, their highest ever share.

"The increase was driven by acquisitions in Central America and the Caribbean, as well as record inflows into the Russian Federation," UNCTAD said.

"Although flows to developing Asia fell slightly, the region continues to absorb more than half of the FDI directed to developing economies as a group, and one quarter of global FDI flows."

The U.S., France and Germany saw a drop in inward investment, but Britain became the world's largest recipient of FDI flows.

Britain saw $75 billion of inflows in the first half, and China - the world's largest emerging market - was the second-largest recipient at $67 billion.

The $46 billion Glencore-Xstrata merger and $55 billion BP-Rosneft transactions brought large increases in flows to Russia, Britain and the British Virgin Islands, the report said.

UNCTAD said FDI flows were likely to lessen in the second half, however, hurt by recovery risks in the U.S. and euro zone, bringing overall 2013 levels close to last year.

But it added that in 2014: "macroeconomic indicators, such as rising industrial production in recent months in many developed economies, point to an improving climate for FDI".

(Reporting by Carolyn Cohn; Editing by Hugh Lawson)