Canada's international transactions in securities, August 2015
Foreign investors added $3.1 billion of Canadian securities to their holdings in August, after a $10.1 billion divestment in July. At the same time, Canadian investment in foreign securities resumed with acquisitions totalling $8.7 billion, mainly US securities.
Foreign investors acquire Canadian debt securities and sell equities
Foreign investors added $3.1 billion of Canadian securities to their holdings in August. The activity during the month was all in the form of debt securities, as non-residents reduced their exposure to Canadian stocks for the third time in four months.
Foreign acquisitions of Canadian bonds amounted to $5.6 billion, mainly federal government and federal government business enterprise bonds. Albeit small, foreign investors continued to reduce their exposure to provincial government bonds in August with a seventh consecutive monthly divestment in these instruments.
Net cross-border transactions in the Canadian money market were subdued in August, with foreign investors acquiring $249 million worth of these instruments. Foreign acquisitions of $2.3 billion of federal Treasury bills were largely offset by a reduction in holdings of Canadian corporate paper. Both short- and long-term interest rates in Canada were down, while the Canadian dollar depreciated slightly against its US counterpart in August.
Foreign investors reduced their holdings of Canadian shares by $2.7 billion in August, following a $9.7 billion divestment in July. This divestment during the month resulted from sales on the secondary market. The Canadian stock market was down by 4.2% during the month, the largest decline in 11 months.
Canadian acquisitions of foreign securities resume
Canadian investment in foreign securities resumed in August with acquisitions totalling $8.7 billion. This activity followed a slight divestment in July. US securities accounted for most of the acquisitions during the month.
Canadian investment in foreign debt securities totalled $2.9 billion in August. Canadians purchased $2.6 billion of US corporate bonds, marking the highest such activity since March 2007. Holdings of US Government bonds were up by $2.5 billion, following a $4.0 billion investment in July. A divestment in non-US foreign bonds moderated the overall acquisitions during the month. US long-term interest rates declined by 15 basis points in August.
Canadian investment in foreign equities was $5.8 billion in August, the largest since July 2014. This investment included both US and non-US foreign shares. Canadian acquisitions of US equities were the highest in 2015 at $3.2 billion, at the same time as a sizable decline in US stock prices.
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 September will be released on November 16.
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