Foreign investment in Canadian securities advanced C$6.1B in February, was focused on corporate instruments, as Canadian acquisitions of foreign securities advanced C$6B: Statistics Canada

OTTAWA , April 16, 2014 (press release) – Foreign investment in Canadian securities advanced $6.1 billion in February and was focused on corporate instruments. This was matched by Canadian acquisitions of foreign securities at $6.0 billion.

Foreign investment in Canadian securities focuses on corporate debt and equities

Foreign investors purchased $6.1 billion of Canadian securities in February, the largest such investment in three months. This activity was led by a $4.5 billion foreign acquisition of Canadian debt securities, balanced between short- and long-term instruments.

Chart 1 
Foreign investment in Canadian securities
Column stacked chart – Chart 1: Foreign investment in Canadian securities, from February 2010 to February 2014

Chart description: Foreign investment in Canadian securities

CSV version of chart 1

Non-residents acquired $2.2 billion of Canadian bonds, following two straight months of divestment. This activity was led by a $3.9 billion purchase of federal government business enterprise bonds, the largest investment since May 2009. Foreign investors also added provincial government bonds to their portfolios, but reduced their holdings of federal government bonds through secondary market sales and retirements.

Foreign investment in the Canadian money market amounted to $2.3 billion in February and was diversified across all sectors, except the federal government. Non-residents have now divested federal government paper for a fifth straight month, reflecting the continued reduction in the overall outstanding amounts of these instruments over this period.

Foreign investors continued to inject funds in the Canadian stock market in February as they acquired $1.6 billion worth of equities. This was a sixth straight month of investment in these instruments, a period during which non-residents increased their holdings by $27.2 billion. Canadian stock prices were up for an eighth consecutive month in February, reaching their highest level since June 2008. The Canadian dollar appreciated against its US counterpart for the first time in five months, up by less than one US cent by the end of February.

Canadian investment in foreign securities strengthens

Canadian investors acquired $6.0 billion of foreign securities in February, marking a fifth straight month of such investment. Acquisitions in the month targeted a broad range of foreign securities, led by bonds. Canadian investment in foreign bonds was up to $2.7 billion, mainly in foreign currency-denominated instruments. Canadian acquisitions of foreign money market instruments were $938 million, and reflected the largest investment in US Treasury bills since October 2010. US long-term interest rates were down but short-term interest rates edged up in February.

Chart 2 
Canadian investment in foreign securities
Column stacked chart – Chart 2: Canadian investment in foreign securities, from February 2010 to February 2014

Chart description: Canadian investment in foreign securities

CSV version of chart 2

Canadian acquisitions of foreign equities amounted to $2.4 billion in February, mainly non-US foreign shares. Major global equity markets were up in the month with the US stock market closing at a record high.

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