Canada's international transactions in securities, July 2023
Foreign investment in Canadian securities totalled $11.6 billion in July, a fourth consecutive month of strong investment. Meanwhile, Canadian investors acquired $2.6 billion of foreign securities, down from a $14.4 billion investment in June. As a result, international transactions in securities generated a net inflow of funds of $9.0 billion into the Canadian economy.
Non-resident investors acquire Canadian private corporate and government bonds
Non-resident investors increased their exposure to Canadian securities by $11.6 billion in July, representing a fourth consecutive month of investment and bringing their total acquisition of Canadian securities during these four months to $48.1 billion. The activity in July focused on long-term debt securities.
Foreign investors acquired $10.3 billion of Canadian private corporate bonds in July, largely new issuances of foreign currency instruments by chartered banks. In addition, they increased their exposure to Canadian government bonds by $5.2 billon, targeting both federal and provincial bonds. In July, Canadian long-term interest rates were up to reach the highest level since April 2010.
Meanwhile, foreign investors reduced their holdings of Canadian equity securities by $1.2 billion in July, bringing their total value to $36.7 billion so far in 2023. In contrast, non-resident investors have acquired $75.9 billion worth of Canadian debt securities since the beginning of the year, led by investment in private corporate bonds.
Canadian investment in foreign securities slows down
Canadian investment in foreign securities totalled $2.6 billion in July, down from a $14.4 billion investment in June. The investment activity in July focused on US equity securities and was moderated by a divestment in foreign bonds.
Canadian investors increased their holdings of US equity securities by $5.5 billion in July, the largest amount since November 2022. In July 2023, investment activity focused on shares of large capitalization firms and investment funds tracking broad market indexes. US share prices, as measured by the Standard and Poor's 500 composite index, were up to reach the highest level since December 2021.
Meanwhile, Canadian investors reduced their holdings of foreign bonds by $5.4 billion in July 2023, in both government and corporate bonds. This activity followed a strong $14.4 billion investment in June. In contrast, they added $1.9 billion of foreign money market instruments to their portfolios in July, the largest amount so far in 2023.
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.
Data on Canada's international transactions in securities for August will be released on October 17.
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.
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