Canada's international transactions in securities

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Foreign investors reduced their holdings of Canadian securities by $4.2 billion in January after a cumulative acquisition of $55.1 billion in the previous six months. Canadian investors acquired foreign securities for a ninth straight month as they added $1.3 billion to their holdings, purchasing equities while selling debt instruments.

Foreign portfolio investment in Canadian securities

Chart description: Foreign portfolio investment in Canadian securities

Non-residents make first divestment in Canadian short-term paper since June 2011

Foreign investors removed $4.6 billion from their holdings of Canadian short-term instruments in January after accumulating $26.0 billion in the second half of 2011. The divestment was primarily in Federal Treasury bills where retirements exceeded acquisitions. This was partly offset by foreign investment of $1.1 billion in provincial government and corporate paper.

Non-resident acquisitions of Canadian bonds slowed to $1.9 billion in January. Inflows were led by purchases of federal and provincial bonds on the secondary market, mainly by investors from the United Kingdom. These acquisitions were moderated by net retirements of provincial bonds for a fourth straight month. Canadian long-term yields increased eight basis points in January, with the resulting differential between long- and short-term rates widening by five basis points.

Non-residents sell Canadian shares as prices increase

Foreign investors reduced their holdings of Canadian stocks by $1.4 billion in January, as Canadian equity prices gained 4.2% in the month. On a geographical basis, sales were led by investors from the United Kingdom, with a $1.1 billion divestment. This was the first monthly divestment in Canadian stocks since April 2011, and the largest since November 2008.

Canadian investment in foreign equity markets sustained

Canadians added a further $3.4 billion of foreign stocks to their holdings in January, spread evenly between US and non-US equities. US equity prices increased 4.4% as all other major world stock markets also posted gains during the month. Demand in January was led by Canadian pension funds. January marked the 13th straight month of investment in foreign stocks, a period during which Canadians have added nearly $30 billion to their portfolios.

Canadian portfolio investment in foreign securities¹

Chart description: Canadian portfolio investment in foreign securities

Canadians reduce their holdings of foreign debt instruments

Canadian investors reduced their holdings of foreign debt instruments by $2.1 billion in January. The divestment, the first in four months, was mainly in US government bonds and Treasury bills. This was partially offset by a fourth straight monthly acquisition of US corporate bonds. US long-term interest rates were up by eight basis points in January, the first increase in three months.

Available without charge in CANSIM: tables 376-0018 to 376-0029, 376-0042, 376-0058 and 376-0063.

Definitions, data sources and methods: survey number 1535.

The January 2012 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 February will be released on April 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 Brian Law (613-951-3835; brian.law@statcan.gc.ca) or Éric Boulay (613-951-1872; eric.boulay@statcan.gc.ca), Balance of Payments Division.