Canada's international transactions in securities, November 2016

Released: 2017-01-19

Canadian investors reduced their holdings of foreign securities by $7.9 billion in November, largely through sales of US instruments. At the same time, foreign acquisitions of Canadian securities slowed to $7.2 billion, following a $15.8 billion investment in October.

As a result, international transactions in securities generated a net inflow of funds of $15.1 billion into the Canadian economy in the month. From January to November, foreign investment in Canadian securities has exceeded Canadian investment in foreign securities by $142.3 billion.

Canadian investors sell US securities

Canadian investors reduced their holdings of foreign securities by $7.9 billion in November, marking a first divestment since January 2016. The divestment was in both foreign debt securities and equities.

Chart 1 
Canadian investment in foreign securities

Canadian holdings of foreign debt securities were down by $4.8 billion in November, mainly US Treasury instruments. Canadian investors sold $2.8 billion of US Treasury bonds and reduced their holdings of US Treasury bills by $864 million. This was the fourth consecutive monthly divestment in US Treasury bonds. In addition, Canadian investors sold non-US foreign bonds but acquired US corporate bonds. US long-term interest rates were up by 38 basis points and short-term interest rates were up by 12 basis points in the month.

Canadian investors sold $3.1 billion of foreign equities in November, following eight straight months of acquisitions. They reduced their holdings of US shares by $5.0 billion, the largest divestment since February 2016. Investments totalling $1.9 billion in non-US foreign shares moderated the overall reduction in the month. US stock prices were up by 3.4% in November.

Foreign investment in Canadian securities slows

Foreign investment in Canadian securities slowed to $7.2 billion in November, led again by acquisitions of private corporate instruments. The investment in November was the lowest since December 2015.

Chart 2 
Foreign investment in Canadian securities

Foreign acquisition of Canadian equities reached $5.5 billion in November. Foreign purchases on the secondary market accounted for the bulk of this activity. Canadian stock prices were up by 2.0% in the month.

Foreign investment in Canadian bonds slowed to $2.9 billion in November, compared with a $6.3 billion acquisition in October. Non-resident investors purchased corporate bonds, both government business enterprises and private corporate bonds during the month. Foreign divestment of $3.0 billion in provincial government bonds moderated the overall investment, while holdings of federal government bonds were almost unchanged. Canadian long-term interest rates were up by 43 basis points in November.

Foreign investors reduced their holdings of Canadian money market instruments by $1.1 billion in November, following a $7.7 billion investment in October. The reduction was in corporate paper and provincial government paper. The divestment activity was moderated by $1.6 billion foreign investment in federal government paper. Canadian short-term interest rates were up by two basis points and the Canadian dollar edged down in the month.

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 Lauren Dong (613-668-3140; lauren.dong@canada.ca), International Accounts and Trade Division.