Canada's international transactions in securities

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Investment in Canada continued to dominate cross-border transactions in securities in November. Foreign investors acquired a further $10.5 billion of Canadian securities in the month, adding significant amounts of private sector and government bonds to their portfolios. At the same time, Canadian residents acquired $2.4 billion of foreign securities, marking a return to US government debt instruments.

Foreign holdings of Canadian bonds continue to expand

Non-resident investors continued to expand and adjust their portfolios of Canadian debt instruments in November, adding $12.9 billion of bonds and removing $1.9 billion from their holdings of short-term securities.

Robust foreign investment in Canadian private corporate bonds of $7.2 billion mainly reflected purchases of new US dollar-denominated bonds. Canadian private corporate bonds have attracted substantial foreign investment so far in 2009, especially in the second half of the year as credit conditions improved and the Canadian dollar strengthened against the US dollar.

Non-residents' demand for Canadian government bonds was also sustained in November. Foreign acquisitions of federal bonds slowed but remained strong at $1.6 billion, while purchases of provincial government bonds increased to $3.1 billion, all new issues.

The trend of reduced foreign holdings of Canadian short-term securities that began in July extended into November, as non-residents disposed of $1.9 billion of these instruments. This was accounted for by a $2.4 billion divestment of federal Treasury bills, partially offset by acquisitions of paper issued by provincial governments. Non-residents, who had been important buyers of federal paper at the peak of the financial crisis in late 2008, have considerably reduced their holdings of these instruments over the last five months, as retirements exceeded acquisitions on secondary markets.

Non-resident investors sell Canadian equities for the first time in 10 months

Foreign investors disposed of $464 million of Canadian equities in November, following nine months of acquisitions. As in October, November sales were led by energy and technology stocks. Canadian stock prices were up 4.9% in November, fully recouping losses recorded in October.

Canadian investors return to US government debt securities

Canadian investors acquired $2.6 billion of foreign debt instruments in November, the largest acquisition since June 2007. This investment activity reflected a return of Canadian investors to US government debt instruments, as they added $1.3 billion of US Treasury bonds and $1.4 billion of US Treasury bills to their portfolios. Yields on both long- and short-term US government debt instruments declined in November.

The remainder of transactions in foreign debt instruments was comprised of sizable retirements of Maple bonds. This was offset by acquisitions of foreign corporate bonds on secondary markets, mainly asset-backed instruments.

Canadians divestment of foreign stocks slows

Canadians removed a further $178 million from their holdings of foreign stocks in November, following two months of more pronounced divestment. This activity was comprised of sales of $330 million of non-US foreign stocks, partly offset by the acquisition of US shares. US stock prices were up 5.7% in November, while most other major foreign stock markets also advanced.

Available on CANSIM: tables 376-0018 to 376-0029, 376-0042, 376-0058 and 376-0063.

Definitions, data sources and methods: survey number 1535.

The November 2009 issue of Canada's International Transactions in Securities (67-002-X, free) will soon be available.

Data on Canada's international transactions in securities for December will be released on February 18.

For more information, or to order data, contact Client Services (613-951-1855; infobalance@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Yiling Zhang (613-951-2057; yiling.zhang@statcan.gc.ca), Balance of Payments Division.