Canadian investors acquired C$14.1B of foreign securities in November, led by investment in US shares; non-residents increased exposure to Canadian securities by C$12.8B, mainly federal government debt and equity securities: Statistics Canada

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OTTAWA , January 17, 2023 (press release) –

Canadian acquisitions of foreign securities totalled $14.1 billion in November, the largest investment since April. Meanwhile, non-resident investors purchased $12.8 billion of Canadian securities, up from a $9.1 billion investment in October. As a result, international transactions in securities generated a net outflow of funds of $1.4 billion from the Canadian economy in November.

Chart 1: Canada's international transactions in securities

Canadian investment in foreign shares resumes
Canadian investors acquired $14.1 billion of foreign securities in November. Investors resumed their purchases of foreign shares by adding $9.9 billion to their holdings, after six consecutive months of divestment that totalled $29.9 billion. Specifically, Canadian investors acquired $5.8 billion of US shares and $4.0 billion of non-US foreign shares. US share prices, as measured by the Standard and Poor's 500 composite index, were up by 5.4% in November.

Chart 2: Canadian investment in foreign equity and investment fund shares

Canadian acquisitions of foreign debt securities slowed to $4.3 billion in November, as sizeable investments in the previous two months totalled $22.1 billion. Canadian investment in US government bonds was $3.5 billion, after two months of strong investment that totalled $15.5 billion. In addition, Canadian investors bought $2.2 billion of non-US foreign bonds. In November, US long-term interest rates fell for the first time since July.

Chart 3: Canadian investment in foreign bonds

Foreign investment in Canadian securities increases
Non-resident investors acquired $12.8 billion of Canadian securities in November, up from a $9.1 billion investment in October. These investment activities followed a substantial divestment of $23.1 billion in September. Foreign investment in November focused on federal government debt securities and equity securities.

Foreign investors increased their exposure to federal government debt securities by $7.1 billion in November, adding $5.0 billion of bonds and $2.1 billion of money market instruments. The foreign investment in federal government paper followed seven consecutive months of divestment that totalled $32.1 billion. At the same time, foreign acquisitions of Canadian corporate debt securities slowed to $2.5 billion, the lowest investment since July 2021. New issuances abroad of private corporate bonds reached their lowest level since February 2021.

Chart 4: Foreign investment in Canadian debt securities, by sector of issuer

In November 2022, Canadian short-term interest rates reached the highest levels since July 2007 and exceeded Canadian long-term interest rates by the most basis points since December 1990. Meanwhile, the Canadian dollar appreciated against the US dollar.

Foreign investors acquired $3.5 billion of Canadian equity securities in November 2022, the largest investment since March. Foreign acquisitions of shares of the banking sector were moderated by a divestment in shares of the manufacturing sector. Canadian share prices, as measured by the Standard and Poor's/Toronto Stock Exchange composite index, posted a 5.3% increase in November.

Note to readers
The data series on international transactions in securities covers portfolio transactions in equity and investment fund shares, bonds, and money market instruments for both Canadian and foreign issues. This activity excludes transactions in equity and debt instruments between affiliated enterprises. These are classified as foreign direct investment in international accounts.

Equity and investment fund shares include common and preferred equities, as well as units or shares of investment funds. For the sake of brevity, the terms "shares" and "equity and investment fund shares" have the same meaning.

Debt securities include bonds and money market instruments.

Bonds have an original term to maturity of more than one year.

Money market instruments have an original term to maturity of one year or less.

Government of Canada paper includes Treasury bills and US-dollar Canada bills.

All values in this release are net transactions unless otherwise stated.

Next release
Data on Canada's international transactions in securities for December 2022 will be released on February 17, 2023.

Products
The Canada and the World Statistics Hub (Catalogue number13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, and Japan.

As a complement to this release, the data visualization product "Securities statistics," part of the series Statistics Canada – Data Visualization Products (Catalogue number71-607-X), is available online.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is also available.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

Industry Intelligence Editor's Note: This press release omits select charts and/or marketing language for editorial clarity. Click here to view the full report.

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