Canada's international transactions in securities
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Foreign investment in Canadian securities increased to $6.3 billion in March, with acquisitions equally split between bonds and stocks. In contrast, Canadians removed $1.7 billion from their holdings of foreign securities in March, all debt instruments.
Foreign investors acquire Canadian bonds on the secondary market
Foreign investors added $3.2 billion of Canadian bonds to their holdings in March. Foreign investment on the secondary market of $8.0 billion was the largest amount since May 2010, and was concentrated in federal government and corporate bonds. This was partially offset by a record high in retirements of federal government enterprise bonds in the month.
Note to readers
All values in this release are net transactions unless otherwise stated.
The data series on international security transactions cover portfolio transactions in stocks, bonds and money market instruments for both Canadian and foreign issues.
Stoc k s include common and preferred equities, as well as warrants.
Debt securities include bonds and money market instruments.
Bonds have an original term to maturity of more than one year.
Money mar k et instruments have an original term to maturity of one year or less.
Government of Canada paper includes treasury bills and US-dollar Canada bills.
Non-resident investment in federal government bonds rebounded to $3.8 billion and was concentrated on medium term-to-maturity bonds, following significant activity in short-term bonds over the previous two months. Purchases of corporate bonds on the secondary market remained robust in March and were focused in Canadian mortgage backed securities.
Non-resident investor holdings of Canadian money market instruments were down $209 million in March. This resulted from sizeable retirements of provincial government paper, which more than offset foreign investment in new Canadian US dollar denominated corporate paper.
Strong foreign acquisitions of Canadian equities continue
Foreign investors added a further $3.3 billion of Canadian equities to their portfolio in March, with investment over the quarter reaching its highest level since the third quarter of 2009. Shares of Canadian financial and mining firms attracted the bulk of foreign investment in March. By month end, Canadian stock prices stood at levels last seen in the first half of 2008.
Canadians reduce their holdings of US government debt securities
Canadian investors reduced their holdings of foreign bonds by $2.3 billion in March, more than offsetting the acquisitions of the previous month. This activity was largely accounted for by US government short-term bonds. Resident investors also removed $701 million from their holdings of foreign money market instruments in March. The divestment was all in US government T-bills and completely offset the investment accumulated over the previous two months. In March, US short-term interest rates fell to their lowest level in more than a year.
Canadians acquire foreign stocks for a third straight month
Canadian investors added $1.3 billion of foreign stocks to their holdings in March, a third consecutive monthly acquisition. This activity was almost equally split between US stocks and other foreign stocks. In March, US stock prices continued to rise and reached their highest level since May 2008, as Canadians favoured US funds tracking broad US equity market indices. Meanwhile, Canadian investment in non-US foreign equities was focused on European stocks and was led by Canadian pension funds.
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 March 2011 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 April will be released on June 16.
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 Éric Boulay (613-951-1872; eric.boulay@statcan.gc.ca), Balance of Payments Division.
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