Canada's international transactions in securities, February 2014
Foreign investment in Canadian securities advanced $6.1 billion in February and was focused on corporate instruments. This was matched by Canadian acquisitions of foreign securities at $6.0 billion.
Foreign investment in Canadian securities focuses on corporate debt and equities
Foreign investors purchased $6.1 billion of Canadian securities in February, the largest such investment in three months. This activity was led by a $4.5 billion foreign acquisition of Canadian debt securities, balanced between short- and long-term instruments.
Non-residents acquired $2.2 billion of Canadian bonds, following two straight months of divestment. This activity was led by a $3.9 billion purchase of federal government business enterprise bonds, the largest investment since May 2009. Foreign investors also added provincial government bonds to their portfolios, but reduced their holdings of federal government bonds through secondary market sales and retirements.
Foreign investment in the Canadian money market amounted to $2.3 billion in February and was diversified across all sectors, except the federal government. Non-residents have now divested federal government paper for a fifth straight month, reflecting the continued reduction in the overall outstanding amounts of these instruments over this period.
Foreign investors continued to inject funds in the Canadian stock market in February as they acquired $1.6 billion worth of equities. This was a sixth straight month of investment in these instruments, a period during which non-residents increased their holdings by $27.2 billion. Canadian stock prices were up for an eighth consecutive month in February, reaching their highest level since June 2008. The Canadian dollar appreciated against its US counterpart for the first time in five months, up by less than one US cent by the end of February.
Canadian investment in foreign securities strengthens
Canadian investors acquired $6.0 billion of foreign securities in February, marking a fifth straight month of such investment. Acquisitions in the month targeted a broad range of foreign securities, led by bonds. Canadian investment in foreign bonds was up to $2.7 billion, mainly in foreign currency-denominated instruments. Canadian acquisitions of foreign money market instruments were $938 million, and reflected the largest investment in US Treasury bills since October 2010. US long-term interest rates were down but short-term interest rates edged up in February.
Canadian acquisitions of foreign equities amounted to $2.4 billion in February, mainly non-US foreign shares. Major global equity markets were up in the month with the US stock market closing at a record high.
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 March will be released on May 16.
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