Canada's international transactions in securities, April 2014
Foreign investment in Canadian securities resumed in April as non-residents added $10.1 billion to their holdings, marking the highest such acquisition in a year. Meanwhile, Canadian investment in foreign securities slowed to $2.5 billion.
Foreign investment in Canadian debt securities resumes
Foreign investment in Canadian debt securities was $6.5 billion in April, following a $4.3 billion divestment in March. Non-resident investors continued to shift their portfolios in favour of Canadian corporate debt securities, and reduced their holdings of government debt instruments for a ninth straight month.
Foreign investment in the Canadian money market amounted to $4.1 billion, following a $6.1 billion divestment in the previous month. The inflows in April were led by foreign purchases of provincial government paper. Non-resident investors also acquired federal government paper following six months of divestment in these instruments, largely retirements. Canadian short-term interest rates edged up by six basis points in April.
Foreign acquisitions of Canadian bonds amounted to $2.4 billion and reflected purchases of new private corporate bonds ($6.5 billion), which were strong for a second consecutive month. This investment was partially offset by a $3.9 billion reduction in foreign holdings of federal government bonds in April. Over the last three months, foreign divestments of federal government bonds totalled $9.0 billion. Canadian long-term interest rates were down slightly in April and the Canadian dollar appreciated 0.8 US cent against the US dollar.
Foreign investors add to their holdings of Canadian equities
Foreign investors acquired $3.6 billion of Canadian shares in April, all secondary market purchases. This marked an eighth consecutive month of such investment in the domestic equity market. Canadian stock prices continued their upward trend, gaining 2.2% in April to reach their highest level since May 2008.
Canadian investors acquire foreign equities and sell foreign debt
Canadian investors' acquisitions of foreign equities amounted to $3.5 billion in April as investment in US shares exceeded that of non-US foreign shares for the first time in three months. The US stock market, as measured by the Standard and Poor's 500 index, was up slightly (+0.6%) at month-end.
Canadian investors repatriated $1.0 billion of funds from foreign debt markets in April. Canadian holdings of US Treasury securities were down by $3.7 billion, the largest divestment since January 2013. This activity was moderated by acquisitions of US corporate debt securities, led by bonds denominated in Canadian dollars. Both long and short-term US interest rates were down in April.
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 May will be released on July 17.
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