Canada's international transactions in securities, April 2013
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Non-resident investors acquired $14.9 billion of Canadian securities in April, adding both debt and equity securities to their holdings. Meanwhile, Canadian investors added $2.8 billion of foreign securities, a third straight month of acquisitions.
Foreign investment in Canadian securities was led by debt instruments, mainly reflecting private corporate bonds and the first acquisition of money market instruments in 2013. Canadian investment in foreign securities also focused on debt instruments in April.
Foreign investment in the Canadian bond market led by private corporate bonds
Non-resident investment in Canadian debt securities reached $12.8 billion in April. This was the largest investment since May 2012 and reflected increased demand for both long- and short-term debt instruments, mainly US dollar-denominated securities. The Canadian dollar appreciated against its US counterpart for a second consecutive month in April.
Foreign investors acquired Canadian bonds for a fourth straight month, adding $7.8 billion worth to their holdings in April, largely new issues of private corporate bonds. Non-residents continued to increase their holdings of federal bonds, though the pace of their acquisitions slowed during the month.
Non-residents invested $5.0 billion in the Canadian money market in April. Inflows were primarily in provincial paper and, to a lesser extent, private corporate paper. Foreign holdings of Canadian Treasury bills edged up after three months of sizable divestments. In April, the differential between long- and short-term interest rates was the lowest since July 2012.
Foreign investors resume their investment in Canadian equities
Non-resident investors acquired $2.2 billion of Canadian equities in April, after two months of divestment. Activity in the month focused on Canadian gold and energy shares. Canadian stock prices were down 2.3%, closing the month at their lowest level in 2013.
Canadian acquisitions of foreign debt securities strengthen
Canadian investors purchased $2.7 billion of foreign bonds in April, led by demand from pension funds. Canadians resumed investment in US government bonds, adding $1.6 billion to their portfolio, mainly short- to medium-term bonds. The differential between US and Canadian long-term interest rates narrowed in April, but remained in favour of investment in the United States. Canadians also increased their holdings of foreign paper by $0.7 billion, mostly instruments issued by governments.
Canadian holdings of foreign equities down for the first time in eight months
Canadian investors reduced their holdings of foreign equities by $0.7 billion in April, following seven straight months of acquisitions. Canadian divestment of $1.1 billion in US equities was the largest since October 2011 and was led by information technology and financial shares. This was partially offset by a $0.4 billion investment in non-US foreign equities. The US stock market was up 1.8% in April.
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 May will be released on July 17.
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