Canada's international transactions in securities, September 2013
Foreign investment in Canadian securities strengthened to $8.4 billion in September and was focused on Canadian equities. Canadian investors reduced their holdings of foreign securities in the month by $1.5 billion, including both debt and equity securities.
Foreign investment in Canadian securities focuses on equities
Foreign investment in Canadian securities amounted to $8.4 billion in September, the highest such inflow of funds in five months. Non-resident investors added equities while reducing their holdings of debt securities over the month.
Foreign acquisitions of Canadian equities reached $10.8 billion in September, the largest such investment since September 2009. This followed a divestment of $2.2 billion in August. The investment activity in September was led by foreign purchases on the secondary market, and more than offset the overall divestment recorded between January and August. The Canadian stock market was up for a third straight month in September to close at its highest level since February 2013.
Non-resident investors reduced their holdings of Canadian bonds by $2.8 billion in September. The divestment of $3.7 billion in federal government bonds, led by retirements, was the fourth in five months. Foreign investment in new Canadian private corporate bonds, mainly US dollar denominated instruments, moderated the overall divestment.
Foreign investors acquired $0.4 billion of Canadian money market instruments, a sixth straight month of investment. Foreign purchases of $2.7 billion of federal treasury bills were partly offset by a divestment in provincial government and corporate paper. Canadian long- and short-term interest rates edged down in September. The Canadian dollar appreciated against its US counterpart by 2.1 US cents.
Canadian investors reduce their holdings of foreign securities
Canadian investors reduced their holdings of foreign securities by $1.5 billion in September, the first divestment in four months. Holdings of both equity and debt securities were down over the month.
Canadians sold $0.5 billion of foreign equities, following a $3.4 billion acquisition in August. Secondary market sales of $1.3 billion in non-US foreign stocks were moderated by investment in US stocks. US stock prices, according to the Standard and Poor's 500 index, increased by 3.0% in September while other major global stock indices were also up.
Canadian investors also reduced their holdings of foreign bonds by $0.8 billion. This activity reflected secondary market sales of $2.2 billion in US government bonds, partially offset by acquisitions of US corporate bonds and non-US foreign bonds.
Note to readers
The data series on international transactions in securities cover portfolio transactions in equity and investment fund shares, bonds and money market instruments for both Canadian and foreign issues. This activity excludes transactions in equity and debt instruments between affiliated enterprises, classified as foreign direct investment in the international accounts.
Equity and investment fund shares include common and preferred equities as well as units/shares of investment funds.
Debt securities include bonds and money market instruments.
Bonds have an original term to maturity of more than one year.
Money market instruments have an original term to maturity of one year or less.
Government of Canada paper includes treasury bills and US-dollar Canada bills.
All values in this release are net transactions unless otherwise stated.
Data on Canada's international transactions in securities for October will be released on December 16.
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