Canada's international transactions in securities, April 2022
Released: 2022-06-17
Canadian investors purchased a record $29.2 billion of foreign securities in April, after a $46.2 billion divestment in the first quarter of 2022. At the same time, foreign acquisitions of Canadian securities totalled $22.2 billion, led by investment in new bonds denominated in foreign currencies.
As a result, international transactions in securities generated a net outflow of funds of $7.0 billion from the Canadian economy in April, following an unprecedented net inflow of funds of $71.7 billion in March.
Chart 1
Canada's international transactions in securities
Canadian investment in foreign securities reaches a record high
Canadian investors acquired $29.2 billion of foreign securities in April, following a divestment of $25.2 billion in March. The investment activity in April was mainly attributable to acquisitions of non-US securities, both equities and bonds.
Canadian investors resumed their purchases of foreign shares by adding $14.7 billion worth to their holdings in April, after three consecutive months of divestment totalling $56.9 billion. Investors added $9.7 billion of non-US foreign shares to their holdings, the largest investment since December 2000. The investment activity in April focused on European shares and, to a lesser extent, Asian shares. On the other hand, after divesting $22.1 billion of US shares in March, Canadian investors added $5.0 billion worth to their holdings in April. US stock prices, as measured by the Standard and Poor's 500 composite index, were down by 8.8% in April, the largest percentage decrease since March 2020.
Chart 2
Canadian investment in foreign equity and investment fund shares
Canadian investment in foreign debt securities reached an unprecedented high of $14.5 billion in April, led by a record $9.6 billion acquisition of non-US foreign bonds. In addition, Canadian investment in US corporate bonds continued in the month, reaching $2.1 billion. In April, US long-term interest rates reached their highest levels since December 2018.
Chart 3
Canadian investment in foreign bonds
Foreign investment in Canadian securities focuses on new bonds
Foreign investment in Canadian securities amounted to $22.2 billion in April, following a $46.5 billion investment in March. Foreign investment in April targeted private corporate bonds, and was moderated by a divestment in Canadian equities.
Foreign investment in Canadian bonds reached $24.3 billion in April. This activity was led by a $25.9 billion investment in Canadian private corporate bonds, largely new bonds denominated in foreign currencies and issued by banks. In addition, the Government of Canada issued a US $3.5 billion global bond contributing to the inflow of funds in the month. The proceeds from the issuance were used to supplement Canada's international foreign reserves. In April, Canadian long-term interest rates rose by 37 basis points. Meanwhile, the Canadian dollar appreciated against all major foreign currencies except the US dollar.
Chart 4
Foreign investment in Canadian bonds, by sector of issuer
Foreign investors reduced their overall exposure to Canadian equities by $615 million in April, after investing $13.6 billion in March. Canadian companies buying back shares from their foreign investors contributed to the overall reduction in April. Foreign purchases of Canadian shares on the secondary market moderated the overall decline, mainly shares of the trade and transportation industry. Overall, Canadian equity prices, as measured by the Standard and Poor's/Toronto Stock Exchange composite index, were down by 5.2% in April, the largest percentage decrease since March 2020.
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 May will be released on July 15.
Products
The Canada and the World Statistics Hub (13-609-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 (71-607-X), is available online.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-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).
- Date modified: