Canada's international transactions in securities, June 2017
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.
Released: 2017-08-16
Foreign investors reduced their holdings of Canadian securities by $923 million in June, the first monthly divestment since July 2015. At the same time, Canadian investment in foreign securities amounted to $13.2 billion, led by acquisitions of equities.
As a result, Canada's international transactions in securities generated a net outflow of funds from the economy of $14.1 billion in June. Despite the net outflow, there was an overall net inflow of funds of $31.6 billion in the second quarter, led by significant foreign acquisitions of Canadian bonds in April and May.
Chart 1
Canada's international transactions in securities, quarterly
Foreign investors reduce their holdings of Canadian dollar-denominated debt instruments
Non-resident investors reduced their holdings of Canadian securities by $923 million in June, following a $29.4 billion investment in May. Overall, foreign investors reduced their exposure to Canadian debt securities but acquired equities in the month.
Foreign investors reduced their holdings of Canadian bonds by $2.6 billion in June, including a $12.3 billion divestment in Canadian dollar-denominated instruments. Holdings of federal government bonds by non-residents were reduced by $9.8 billion on both sales on the secondary market and retirements. This activity followed acquisitions totaling $11.0 billion in the previous two months. Foreign acquisitions of Canadian private corporate bonds, mainly new bonds placed in foreign markets, moderated the overall divestment. Canadian long-term interest rates were up by 20 basis points in June, after four consecutive monthly declines. At the same time, the Canadian dollar appreciated against its US counterpart by almost three US cents.
Chart 2
Foreign investment in Canadian securities
Net cross-border activity in the Canadian money market was subdued in June, as foreign holdings of these instruments edged down by $66 million. Foreign acquisitions of corporate paper were more than offset by a reduction in holdings of government paper. Canadian short-term interest rates increased by 13 basis points in June.
Foreign investment in Canadian equities amounted to $1.7 billion in June, following a $7.2 billion investment in May. Issuance of new Canadian shares to non-resident portfolio investors, resulting from cross-border mergers and acquisitions, led the activity during the month. Canadian stock prices were down by 1.1% in June.
Canadian investors acquire foreign shares at a strong pace
Canadian investment in foreign securities amounted to $13.2 billion in June, following a $4.3 billion investment in May. Acquisitions of equities were moderated by sales of debt instruments in the month.
Canadian investment in foreign equities totalled $15.3 billion and targeted both US and non-US foreign shares. Since the beginning of the year, Canadian investors have acquired $34.1 billion of foreign shares, compared with sales of $1.8 billion for the same period in 2016. US stock prices edged up in June and have increased by 8.3% since December 2016.
Canadian investors reduced their holdings of foreign debt securities by $2.1 billion in June, led by retirements of US Treasury bills. Acquisitions of foreign bonds, mainly US Treasury bonds, moderated this decline. US long-term interest rates were down by 11 basis points, while short-term rates were up by 10 basis points in the month.
Chart 3
Canadian investment in foreign securities
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, which are classified as foreign direct investment in the international accounts.
Equity and investment fund shares include common and preferred equities as well as units/shares of investment funds.
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 July will be released on September 18.
Products
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available. This publication will be regularly updated to maintain its relevance.
The updated Canada and the World Statistics Hub – United States (13-609-X) is now available from the home page of the Statistics Canada website. This new product illustrates the nature and extent of Canada's economic and financial relationship with the United States, using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel, including merchandise trade by Canadian provinces and US states.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).
To enquire about the concepts, methods or data quality of this release, contact Éric Simard (613-219-5932; eric.simard@canada.ca), International Accounts and Trade Division.
- Date modified: