Canadian investors have been busy buying foreign securities

And foreign investors love Canadian government bonds according to Statistics Canada’s latest data

Canadian investors have been busy buying foreign securities
Steve Randall

An unprecedented $5 billion in US corporate bonds acquisitions has contributed to another month of eager purchasing of foreign securities by Canadian investors.

As well as the corporate bonds, mostly Canadian dollar denominated, the figures for April, just released by Statistics Canada, show that Canadians bought $2 billion in US government bonds and $2.8 billion in (mainly government) non-US foreign bonds.

US long-term interest rates reached their highest levels since January 2020 in April.

Canadian investors added $18.6 billion in foreign securities to their portfolios in April, marking a twelfth consecutive month of investment and a total of $140.9 billion since May 2020.

Along with bonds, Canadians acquired $8.5 billion in foreign shares, with $5.4 billion in US equities, mostly large tech firms. Their total purchase of non-US foreign shares totalled $3.1 billion.

Foreign investors buy Canadian debt

Meanwhile, Canadian government bonds were favoured by non-resident investors.

Reversing a recent divestment trend, these investors snapped up $8.4 billion in federal government bonds – the largest in a year - and $3.9 billion in provincial government bonds.

However, they divested corporate bonds worth $5.8 billion.

Canada’s long-term interest rates were down slightly in April while the value of the loonie rose to 81.4 cents, its highest in 6 years.

Foreign investment in Canadian shares totalled $2.8 billion, but this was the lowest since October 2020 and well below the previous five-month average of $7.5 billion.