MEXICO CITY, June 18 (Xinhua) -- Foreign investors consider Mexico as a strong destination among emerging markets due to its attractive pricing, a new report by Citibanamex, the local subsidiary of Citigroup Inc, revealed on Monday.
In the report, Citibanamex said that during May, the reduction in prices of Mexican assets, attractive valuations on the stock exchange and the rate of the peso were viewed approvingly by foreign investors.
According to the bank, foreign investors pumped 866 million dollars in May into the local stock exchange, bringing the total in the first five months of the year to 2.862 billion dollars.
"Foreigners like Mexico and, differing from the outgoing capital flows seen in emerging markets in recent months, the stock exchange in Mexico has remained attractive," read the report by analyst Octavio Garcia.
The document said that accumulated capital entering Mexico this year should place Mexico above any other emerging market.
According to Citibanamex, foreign resources represent 0.7 percent of the stock market's value as opposed to just 0.1 percent in South Africa and Brazil.
The bank said, in May, Mexico saw the largest monthly adjustment in around a decade, due to the U.S. trade situation, especially the placing of tariffs on steel and aluminum imports from Canada, Mexico and the European Union.
The peso depreciated by 7.6 percent against the U.S. dollar in May, also due to doubts about the future of the North American Free Trade Agreement (NAFTA), which are in tense renegotiation among Canada, the United States and Mexico.
Citibanamex said several more months are likely needed to settle the future of the landmark trade agreement, with negotiations being complicated by general elections in Mexico in July and the U.S. mid-term elections in November.