Canada's international transactions in securities, March 2013
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Non-resident investors acquired $1.2 billion of Canadian securities in March, led by investment in government bonds. Acquisitions of bonds were largely moderated by continued reductions in foreign holdings of money market instruments.
Meanwhile, Canadian investors added $3.8 billion of foreign securities to their holdings, following a $4.3 billion acquisition in February.
Foreign investment in the Canadian bond market focuses on government instruments
Foreign investment in Canadian bonds slowed for a second straight month, reaching $5.2 billion in March. On a sector basis, non residents acquired government bonds at a similar pace than in February, while their acquisitions of corporate bonds slowed.
Foreign acquisitions of government bonds were $4.3 billion in March, led by secondary market purchases of instruments with short to medium-term maturities. Non-resident investors also added $0.9 billion of Canadian corporate bonds to their holdings, reflecting fewer net new issues for a second consecutive month. Acquisitions of federal government enterprise bonds were partly offset by a divestment in private corporate bonds. Overall, foreign investors accumulated $25.2 billion of Canadian bonds in the first quarter of 2013.
Foreign investors withdrew $3.4 billion from the Canadian money market in March. Foreign holdings of federal paper were down for a third straight month despite an increase in the overall supply of these instruments. Provincial government and private corporate paper also contributed to the reduction over the month.
Non-resident holdings of Canadian equities edge lower
Foreign portfolio investors sold $0.6 billion of Canadian equities in March, following an $11.6 billion reduction in their holdings in February that was largely attributable to merger and acquisition activity. The divestment in March mainly focused on Canadian energy, gold, and banking shares. Canadian stock prices edged down 0.6% after three months of increases.
Canadian investment in foreign securities evenly split between bonds and equity
Canadian investors added $2.0 billion of foreign equities to their holdings in March, led by demand from pension funds. Canadian investment of $2.4 billion in non-US stock markets, the highest such outflow since March 2010, mainly targeted Asian equities. Japanese stocks led the growth in global equity markets in March. In addition, Canadians sold $0.4 billion of US equities after four straight months of investment. US stock prices increased 3.6% in March and 10% in the first quarter of 2013.
Canadian investors also acquired $1.9 billion of foreign bonds in March. Outflows were led by non-US foreign bonds and, to a lesser extent, US corporate bonds. This activity was moderated by a divestment in US government bonds. Residents have acquired foreign bonds in six of the last seven months.
Note to readers
The data series on international transactions in securities cover 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, 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.
Data on Canada's international transactions in securities for April will be released on June 17.
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