Canada's international transactions in securities
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Non-resident investors added a further $13.3 billion of Canadian securities to their holdings in January, led by increased acquisitions of Canadian bonds. For their part, Canadian investors purchased $2.0 billion of foreign securities over the same period, mainly US stocks.
Non-resident investors strengthen position in federal government securities
Acquisitions of Canadian bonds by foreign investors amounted to $10.1 billion in January, following a record high investment of $95.9 billion in 2010. Federal government bonds accounted for just over half of this activity in January, largely Government of Canada two-year benchmark bonds.
Non-residents resumed investment in provincial bonds, purchasing $1.8 billion in January, mainly new short-term bonds denominated in US dollars. Foreign investors also acquired private corporate and government enterprise bonds, targeting short-term bonds. In January, yields on short-term Canadian bonds stood above their US counterparts while the opposite held for longer-term bonds. The Canadian dollar remained near par with the US dollar over the month.
Note to readers
All values in this release are net transactions unless otherwise stated.
The data series on international security transactions cover portfolio transactions in stocks, bonds and money market instruments for both Canadian and foreign issues.
Stoc k s include common and preferred equities, as well as warrants.
Debt securities include bonds and money market instruments.
Bonds have an original term to maturity of more than one year.
Money mar k et instruments have an original term to maturity of one year or less.
Government of Canada paper includes treasury bills and US-dollar Canada bills.
Non-residents added a further $1.9 billion of Canadian money market instruments to their portfolios in January, a third straight month of strong investment. Despite a significant decline in the overall amount of federal government Treasury bills outstanding, non-residents acquired $1.0 billion of these securities in the month.
Foreign investment in Canadian stocks continues
Non-residents have accumulated Canadian stocks for six consecutive months, buying $1.3 billion in January. This was comprised of secondary market transactions and focused on indexed funds tracking equity prices of large Canadian companies. In January, Canadian equity prices were up for a seventh month in a row.
Canadian investment in foreign debt favours short-term securities
Canadian investors purchased $551 million of US Treasury bills, following two consecutive months of divestment totalling $2.5 billion. On the other hand, Canadians trimmed their holdings of non-US foreign paper for the first time since June 2010.
On the long-term side, Canadians reduced their holdings of foreign bonds by $319 million in January, following two months of investment. This divestment was nearly all in US government bonds, as sales of short-term bonds more than offset acquisitions of long-term bonds.
Canadian investors return to foreign stocks
Following three months of divestment, Canadians acquired foreign stocks in January, adding $1.8 billion to their portfolios. A diverse group of US stocks accounted for all of the outflows. In January, US equity prices continued their uptrend and reached their highest level since May 2008.
Available on CANSIM: tables 376-0018 to 376-0029, 376-0042, 376-0058 and 376-0063.
Definitions, data sources and methods: survey number 1535.
The January 2011 issue of Canada's International Transactions in Securities (67-002-X, free) will soon be available.
Data on Canada's international transactions in securities for February will be released on April 18.
For more information, or to order data, contact Client Services (613-951-1855; infobalance@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Éric Boulay (613-951-1872; eric.boulay@statcan.gc.ca), Balance of Payments Division.
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