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Canada's international transactions in securities, April 2018

Released: 2018-06-15

Foreign investment in Canadian securities totalled $9.1 billion in April, up from $6.4 billion in March. At the same time, Canadian investors reduced their holdings of foreign securities by $652 million, on large sales of US shares.

Foreign acquisitions of Canadian bonds resume

Foreign investment in Canadian securities amounted to $9.1 billion in April and mainly targeted the Canadian bond market.

Chart 1  Chart 1: Foreign investment in Canadian securities
Foreign investment in Canadian securities

Foreign investors resumed their acquisitions of Canadian bonds in April by adding $8.8 billion worth to their holdings, following four straight months of divestment. The activity in the month reflected foreign purchases of corporate bonds moderated by sales of government bonds.

Chart 2  Chart 2: Foreign investment in federal government bonds
Foreign investment in federal government bonds

Non-resident investors acquired $10.6 billion worth of corporate bonds, mainly new issues denominated in foreign currencies. Meanwhile, they reduced their holdings of federal government bonds by $5.9 billion, a fifth consecutive month of divestment. Since the beginning of the year, foreign investors have reduced their holdings of federal government bonds by $33.5 billion. Canadian long-term interest rates were up by 26 basis points and the Canadian dollar edged up against its US counterpart in April.

Foreign investors reduced their holdings of Canadian money market instruments by $2.1 billion in April, following a $6.3 billion investment in March. A divestment in federal and provincial government paper contributed to the reduction in the month. Canadian short-term interest rates were up by 11 basis points in April.

Foreign investment in Canadian equities amounted to $2.4 billion in April, a fifth consecutive month of investment. Foreign purchases mainly targeted shares from the finance and insurance sector. Canadian stock prices were up by 1.6% in April.

Canadian investors continue to sell US shares

Canadian investors sold $652 million of foreign securities in April, following a $2.1 billion divestment in the previous month. As in March, a divestment in foreign equities was moderated by acquisitions of foreign debt securities in the month.

Canadian holdings of foreign equities were reduced by $4.8 billion in April. Record sales of $11.3 billion in US shares were moderated by purchases of non-US foreign shares in the month. This was the second consecutive month of strong divestments in US shares. US stock prices edged up in the month.

Canadian investment in foreign debt securities was $4.1 billion in April, down from $8.5 billion in March. Acquisitions of US Treasury bonds amounted to $3.2 billion, for a total of $7.2 billion since the beginning of the year. There were also acquisitions of non-US foreign bonds and sales of US Treasury bills in the month. US long-term interest rates were up by three basis points in April and by 47 basis points compared with the end of 2017.

Chart 3  Chart 3: Canadian investment in foreign securities
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 May will be released on July 16.

Products

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is also available. This publication will be regularly updated to maintain its relevance.

The updated Canada and the World Statistics Hub (Catalogue number13-609-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.

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 Lauren Dong (613-668-3140; lauren.dong@canada.ca), International Accounts and Trade Division.

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