Canada's international transactions in securities, April 2015
Foreign investors purchased Canadian securities for a fourth straight month in April, adding $12.9 billion to their holdings. At the same time, Canadian investment in foreign securities resumed with acquisitions totalling $6.6 billion in the month, mainly non-US foreign securities.
Foreign investment in Canadian securities continues
Foreign investment in Canadian securities amounted to $12.9 billion in April, a fourth consecutive month of investment. Foreign investors continued to add both Canadian debt securities and equities to their holdings in the month. Foreign acquisitions of Canadian securities since the beginning of the year totalled $50.1 billion, nearly three times the amount recorded during the same period in 2014.
Foreign investment in Canadian debt securities was $9.3 billion in April, almost evenly split between long- and short-term instruments. Non-resident investors acquired $5.0 billion in Canadian bonds, led by investment in federal government bonds, which was relatively strong for a third straight month. A reduction in foreign holdings of both provincial government and corporate bonds, largely through retirements, moderated the overall acquisitions of Canadian bonds in April. Canadian long-term interest rates increased by 26 basis points in April.
Foreign investors resumed their acquisitions in the Canadian money market by injecting $4.2 billion in April. Federal government Treasury bills accounted for the bulk of this activity, as non-residents invested $3.0 billion in these instruments, marking the highest inflow since December 2012. The remainder of the activity in the month was mainly in private corporate paper. Canadian short-term interest rates were up by 12 basis points in April, following a significant decline of 37 basis points in the first quarter. The Canadian dollar appreciated against its US counterpart by 3.9 US cents in the month, the highest increase in 42 months.
Foreign investment in Canadian shares reached $3.7 billion in April, a fourth straight month of such activity. Canadian stock prices were up 2.2% in the month and up 4.1% since the beginning of the year.
Canadian acquisitions of foreign securities resume
Canadian investment in foreign securities resumed in April, with acquisitions totalling $6.6 billion. This activity was led by investment in non-US foreign instruments.
Canadian investment in foreign equities totalled $4.7 billion, accounting for over two-thirds of overall acquisitions in April. Outflows were mainly in non-US foreign shares. After a sizeable divestment in January, investments in foreign shares strengthened in the last three months as all major foreign stock markets increased during this period.
Canadian investors purchased $1.8 billion of foreign debt securities in April, following a sizable divestment in March. Acquisitions of non-US foreign bonds accounted for the bulk of the investment and marked the largest such investment since May 2013. Canadian holdings of US Treasury bonds were down for a second consecutive month. US long-term interest rates were down by 10 basis points 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 16.
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To enquire about the concepts, methods or data quality of this release, contact Lauren Dong (613-668-3140; firstname.lastname@example.org), International Accounts and Trade Division.
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