Canada's international transactions in securities, October 2024
Released: 2024-12-17
Foreign investors increased their exposure to Canadian securities by $21.5 billion in October, a second consecutive month marked by significant investment activity. Meanwhile, Canadian investors reduced their holdings of foreign securities by $2.6 billion, the first divestment since January.
As a result, international transactions in securities generated a net inflow of funds of $24.2 billion to the Canadian economy in October.
Chart 1
Canada's international transactions in securities
Notable foreign investment in Canadian securities continues
Foreign investors acquired $21.5 billion of Canadian securities in October, mainly federal government debt instruments and corporate shares.
Foreign acquisitions of Canadian debt securities totalled $11.8 billion in October, largely bonds. Foreign investors increased their holdings of federal government bonds by $8.1 billion. They also added $8.4 billion of private corporate bonds, mainly newly issued bonds by chartered banks denominated in foreign currencies. On the other hand, foreign investors reduced their holdings of provincial government bonds by $2.0 billion in October due to retirements, the largest divestment since February 2023.
Chart 2
Foreign investment in Canadian bonds, by sector of issuer
Meanwhile, foreign holdings of Canadian money market instruments were reduced by $2.1 billion in October. The divestment mainly targeted private corporate paper (-$4.4 billion) and was moderated by acquisitions of Government of Canada paper (+$3.4 billion).
In October, the Bank of Canada lowered its policy rate from 4.25% to 3.75%.
Non-resident investors increased their exposure to Canadian shares by $9.8 billion in October, following a significant $14.9 billion investment in September. The acquisitions in October were mainly in shares of the management of companies and enterprises, as well as the trade and transportation industries.
Canadian share prices, as measured by the Standard & Poor's (S&P)/Toronto Stock Exchange composite index, edged up in October.
Chart 3
Foreign investment in Canadian equity and investment fund shares
Largest Canadian divestment in foreign shares since March 2022
Canadian investors reduced their holdings of foreign securities by $2.6 billion in October, the first divestment since January. Sizable sales of foreign shares were moderated by large acquisitions of foreign debt securities.
Canadian investors sold $15.6 billion of foreign equities in October, the largest divestment since March 2022. On a geographical basis, this divestment was comprised of $11.1 billion of US shares and $4.5 billion of non-US shares. Canadian investors had acquired $43.3 billion of US shares from January to September.
US share prices, as measured by the S&P 500 composite index, were down by 1.0% in October, following five consecutive months of increases.
Chart 4
Canadian investment in foreign equity and investment fund shares
Meanwhile, Canadian investment in foreign debt securities reached $12.9 billion, led by a $11.2 billion investment in foreign bonds. Canadian investors, mainly pension funds, acquired $10.4 billion of non-US foreign bonds in October, the largest monthly investment on record.
Canadian investors also added $1.8 billion of foreign money market instruments to their holdings, mainly US government paper. The activity in October followed three consecutive months of divestment.
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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 November will be released on January 17, 2025.
Products
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.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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