Mexico FDI Hits Record US$31 Billion in 1H24: The Week in Finance

Foreign Direct Investment in Mexico reached US$31.1 billion in the first half of 2024, fueled by the ongoing nearshoring trend. However, Morgan Stanley has downgraded the country’s investment outlook due to the upcoming judicial reform. Additionally, Nubank reported a net income of US$487 million in Q2 2024, alongside a rise in customer numbers.

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Mexico's FDI Rises 7.2% in First Half of 2024

Foreign Direct Investment (FDI) in Mexico reached US$31.1 billion in the first half of 2024, a 7.2% increase from the previous year, with the United States contributing 44% of the total inflows. The majority of this investment came from the reinvestment of earnings, highlighting Mexico's economic stability and attractiveness for business expansion. The manufacturing sector, particularly in transportation equipment and other key industries, captured 54% of the FDI, with significant contributions from Germany and Japan as well.

Nubank’s Net Income Surges to US$487 Million in 2Q24

Nubank doubled its net income to US$487 million in 2Q24, driven by a 65% year-over-year revenue increase and significant growth in its customer base, particularly in Brazil, Mexico, and Colombia. The company's total deposits reached US$25 billion, with its credit card and loan portfolios fueling profitability. Nubank now serves 95.5 million customers in Brazil, making it the fourth-largest financial institution in the country, while also expanding its presence in Mexico and Colombia.

Trifecta 2024: Polls, Payments, and Pesos

According to Sebastian Kreis, Co-Founder and CEO, Xepelin, businesses in Mexico are facing heightened challenges at the end of 2024 due to political transitions in North America, including a new president-elect in Mexico, US elections, and currency volatility. To navigate these complexities, companies are encouraged to adopt strategic financial planning and use digital solutions, which offer extended payment terms and reduce currency risk. 

Morgan Stanley Downgrades Investment Recommendation for Mexico due to Judicial Reform

Morgan Stanley has downgraded its investment recommendation for Mexico to “Underweight,” anticipating below-average stock performance due to proposed judicial reforms by President Andrés Manuel López Obrador, which they believe will increase risk and limit capital investments. The proposed reforms aim to overhaul the judicial system by allowing judges and magistrates to be elected by popular vote, which requires a qualified majority in Congress for approval

InDrive Will Not Seek a Finance License, Will Focus on Providing Credit to Drivers

inDrive, a mobility platform operating in 46 countries, has launched its financial services division, inDrive Money, in Mexico, focusing on providing cash loans to drivers on its platform. Unlike competitors like Uber and Didi, inDrive does not plan to obtain a regulated financial license, allowing for quicker service rollout and flexibility in meeting the credit needs of its users, who often lack access to traditional banking. The company aims to enhance financial inclusion by offering loans tailored to drivers' needs, with plans to expand offerings and relax eligibility criteria to serve a broader audience.