Canada's international transactions in securities, April 2016

Released: 2016-06-16

Foreign investment in Canadian securities amounted to $15.5 billion in April, the fourth straight month of relatively strong activity. At the same time, Canadian investors acquired $4.7 billion of foreign securities, mainly debt instruments.

International transactions in securities generated a net inflow of funds into the Canadian economy in each of the first four months of 2016.

Foreign investment in Canadian securities remains relatively strong

Foreign acquisitions of Canadian securities amounted to $15.5 billion in April, led by investment in debt securities. Foreign acquisitions of Canadian securities for the January to April period totalled $59.9 billion, with two-thirds of this investment in private corporate instruments.

Chart 1 
Foreign investment in Canadian securities

Foreign investors purchased $13.5 billion of Canadian debt securities in April, the highest such investment in a year. Non-resident investment in Canadian bonds was $7.5 billion, with three-quarters of that investment in new bonds denominated in foreign currencies and issued by private corporations. Foreign investors also acquired $2.0 billion of provincial government bonds during the month, largely new issues denominated in foreign currencies. Canadian long-term interest rates were up 28 basis points in the month, the largest increase in almost three years. At the end of April, rates were back to levels seen at the end of 2015.

Activity in the Canadian money market in April resulted in a $6.0 billion injection of funds by non-residents, mostly paper denominated in foreign currencies. Half of the investment was in provincial government paper. Foreign acquisitions of federal government paper reached $1.9 billion, following two straight months of divestment in these instruments. Canadian short-term interest rates were up 11 basis points and the Canadian dollar appreciated against its US counterpart by 2.7 US cents in April, the third straight month of appreciation.

Non-resident investors acquired Canadian shares for an eighth consecutive month, adding $2.0 billion to their holdings in April. This activity followed strong acquisitions in March and largely reflected purchases on the secondary market. Canadian stock prices were up 3.4% in the month and have risen 7.2% since the beginning of the year.

Canadian investors acquire foreign debt securities

Canadian investors added $4.7 billion of foreign securities to their holdings in April, the third consecutive month of investment led by acquisitions of foreign debt instruments.

Canadian acquisitions of foreign debt securities amounted to $3.9 billion and were almost evenly split between US and non-US foreign instruments. Canadian investors increased their holdings of non-US foreign bonds by $1.7 billion in April, marking a fifth straight month of investment in these instruments. At the same time, Canadian holdings of US Treasury bonds were up, following a divestment in March. US long-term interest rates were down eight basis points in the month.

Canadian purchases of foreign stocks remained weak in April, as investors added $804 million to their portfolios. An investment of $1.2 billion in US equities was moderated by a divestment in non-US foreign shares. US stock prices edged up in the month. Canadian investors have reduced their holdings of foreign equities by $13.9 billion so far in 2016, with the bulk of divestment activity recorded in January.

Chart 2 
Canadian investment in foreign securities

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Éric Simard (613-219-5932; eric.simard@canada.ca), International Accounts and Trade Division.