Canada's international transactions in securities, January 2024
Released: 2024-03-15
Foreign investment in Canadian securities amounted to $8.9 billion in January, led by acquisitions of government debt securities. Meanwhile, Canadian investors reduced their holdings of foreign securities by $7.6 billion, led by sales of equity securities. As a result, international transactions in securities generated a net inflow of funds of $16.5 billion in the Canadian economy.
Chart 1
Canada's international transactions in securities
Strong foreign investment focuses on government debt securities
Foreign investors acquired $8.9 billion of Canadian securities in January, a third consecutive monthly investment. The activity in January focused on debt securities of governments and their business enterprises, both short- and long-term instruments, and was moderated by a divestment in private corporate money market instruments.
Foreign acquisitions of public sector debt securities totalled $21.3 billion in January, the largest investment since November 2021. The activity in January 2024 was led by a $14.1 billion investment in federal government debt instruments and a $6.6 billion investment in debt securities of government business enterprises. On the other hand, non-resident investors reduced their holdings of private corporate paper by a record $15.5 billion, largely attributable to retirements of instruments from the banking sector.
Chart 2
Foreign investment in Canadian debt securities, by sector of issuer
Foreign investment in Canadian shares was marginal in January as acquisitions on the secondary market (+$1.6 billion) were offset by retirements. Canadian share prices, as measured by the Standard and Poor's (S&P)/Toronto Stock Exchange composite index, edged up 0.3% in January.
Substantial Canadian divestment in foreign shares
Canadian investors reduced their exposure to foreign securities by $7.6 billion in January, after a record investment of $29.4 billion in the previous month. A significant divestment in foreign shares was moderated by investments in foreign bonds.
Chart 3
Canadian investment in foreign equity and investment fund shares
The divestment in foreign equity securities totalled $14.8 billion, nearly equally split between US and non-US foreign shares. January's divestment activity was the highest in one year and followed a record $29.5 billion investment in December 2023. US share prices, as measured by the S&P 500 index, were up by 1.7% in January 2024. At the same time, Canadian investors added $8.1 billion of foreign bonds to their portfolios, mainly bonds of the US government and international organizations.
Chart 4
Canadian investment in foreign bonds
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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 February will be released on April 17.
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.
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