Canada's international transactions in securities
Archived Content
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.
Related subjects
-
[an error occurred while processing this directive]
Foreign investment in Canadian securities slowed to $7.4 billion in December, half the amount recorded in November but still close to the average monthly investment in 2011. Meanwhile, Canadians acquired $2.8 billion of foreign securities in December, led by bonds.
Transactions in December closed a third straight year of relatively robust non-resident investment in Canadian securities at $95.6 billion, down from a high of $117.4 billion in 2010. In addition, the year 2011 marked the highest annual Canadian investment in foreign securities since 2007. This activity was well off the pace set from 2005 to 2007, a period that reflected the expansion of the maple bond market.
Foreign portfolio investment in Canadian securities
Chart description: Foreign portfolio investment in Canadian securities
Non-residents acquire Canadian debt instruments at a slower pace
Foreign investment in Canadian bonds slowed to $2.1 billion in December. Secondary market acquisitions of federal bonds with short-term maturities and provincial bonds with long-term maturities led the inflows. This activity was partially offset by retirements of Canadian private corporate bonds, mainly held by US residents. Canadian long-term interest rates fell by 19 basis points, as a result, the differential between long- and short-term rates reached the lowest level since August 2008. For the year, foreign purchases of $42.9 billion of Canadian bonds amounted to less than half the inflows recorded in 2010.
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.
Stocks 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 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.
Non-residents placed $3.5 billion in Canadian money market instruments in December, mainly in provincial government and federal government enterprise paper. Foreign investors increased their holdings of federal Treasury bills for a sixth straight month, though December marked the lowest such acquisition in this period. Foreign investment in the Canadian money market intensified in the second half of the year to a high of $32.0 billion in 2011. Over 80% of the investment was directed to federal Treasury bills.
Foreign investment in Canadian stocks slows
Foreign investors purchased $1.7 billion of Canadian equities in December, down from $3.1 billion in November. Secondary market acquisitions by investors from the United Kingdom led the buying in December. This was partially offset by the retirement of Canadian stocks resulting from merger and acquisition activity in the month.
Canadians further increase their holdings of foreign bonds
Canadian investors acquired $2.3 billion of foreign long-term debt instruments in December. US government bonds led foreign purchases over the month, making for the first quarterly investment in these instruments since the fourth quarter of 2009. Despite increased activity in the fourth quarter, Canadians reduced their holdings of foreign bonds for a fourth straight year in 2011.
Canadian investors removed $918 million from their holdings of foreign money market instruments in December. This was the largest monthly divestment in 2011 and was driven by retirements of US government and corporate financial paper. This divestment was partially offset by acquisitions of corporate financial paper from Australia. US short-term interest rates held at 0.01% for a second month.
Canadians continue to accumulate foreign equities
Canadian investors added $1.4 billion of foreign stocks to their holdings in December, evenly split between US and non-US corporate shares. Investment was focused on technology and energy shares, as stock prices rose in most major global markets in December. Canadian investors have added foreign equities to their portfolios in every month of 2011, for a total of $25.5 billion, which was almost twice the amount invested in 2010.
Canadian portfolio investment in foreign securities1
Chart description: Canadian portfolio investment in foreign securities
Available without charge in CANSIM: tables 376-0018 to 376-0029, 376-0042, 376-0058 and 376-0063.
Definitions, data sources and methods: survey number 1535.
The December 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 January will be released on March 16.
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 Brian Law (613-951-3835; brian.law@statcan.gc.ca) or Éric Boulay (613-951-1872, eric.boulay@statcan.gc.ca), Balance of Payments Division.
- Date modified: