New data from Statistics Canada shows a continued interest in domestic securities amid turbulent times for the global economy
New data from Statistics Canada shows a continued divestment of foreign securities by Canadian investors.
Canadians reduced their holdings of foreign securities by $1.4 billion in August, mostly selling US corporate bonds, moderated by purchases of $2.0 billion in non-US foreign bonds. This follows a $4.3 billion investment in foreign securities in July.
However, in equities the pull-back is clearer with divestment of $2.3 billion, marking a seven-month run of reducing exposure to foreign equities. This included $1.4 billion of US shares sold, mostly investment fund shares tracking broad stock market indices, reflecting a downturn in US share prices.
There has been a year-to-date reduction in Canadians’ holdings of foreign shares of $57.6 billion, a sharp turnaround from the $71.2 billion investment seen in the same period of 2021.
Canadian bonds
Meanwhile, non-resident investors remained in favour of Canadian securities in August.
Bonds led the shopping list with investors buying $20.1 billion, mostly new US dollar and euro denominated bonds issued by Canadian chartered banks.
Canadian federal bonds ($6.1 billion) and their enterprises ($5.1 billion) were also in demand, mostly those maturing in three years or less.
Foreign investors sold just $15 million in Canadian equities in August, easing back from more than a $16 billion divestment of these assets over four consecutive months. Manufacturing and energy stocks made up a large share of the share sales while banks and trade and transportation stocks were bought.
Overall, non-residents added $22.0 billion of Canadian securities to their portfolios in August.
Foreign #investment in Canadian securities growth accelerated in August and reached $22.0 billion, the largest investment since April. Learn more: https://t.co/oUmFRhRMlo. pic.twitter.com/KpYtmVR4z6
— Statistics Canada (@StatCan_eng) October 18, 2022
