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Canada's international transactions in securities, January 2018

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Released: 2018-03-16

Foreign investors resumed their investment in Canadian securities by adding $5.7 billion to their holdings in January. Meanwhile, Canadian investment in foreign securities totalled $13.3 billion, a second consecutive month of strong acquisitions. As a result, Canada's international transactions in securities generated a net outflow of funds of $7.6 billion from the Canadian economy in the month.

Foreign investors resume their investment in Canadian securities

Foreign investors resumed their investment in Canadian securities by adding $5.7 billion to their holdings in January, following a divestment of $1.5 billion in December. The investment activity in January mainly targeted the Canadian money market.

Non-resident investors strengthened their acquisitions in the Canadian money market by adding $6.1 billion to their holdings in January, the largest investment since October 2016. Foreign acquisitions of private corporate paper accounted for the bulk of the investment, mainly paper denominated in foreign currencies. The Canadian dollar appreciated against its US counterpart by 1.6 US cents in the month.

Chart 1  Chart 1: Foreign investment in Canadian securities
Foreign investment in Canadian securities

Foreign holdings of Canadian bonds were down by $3.3 billion in January, following a divestment of $4.3 billion in December. The divestment activity in January was in government bonds and, to a lesser extent, corporate bonds. Foreign investors reduced their holdings of Canadian private corporate bonds for the first time since June 2015. From July 2015 to December 2017, foreign acquisitions of private corporate bonds were sizable, totalling $187.3 billion.

Foreign investment in Canadian equities amounted to $2.9 billion in January, the largest investment in four months. On an industrial basis, a significant reduction in foreign holdings of Canadian shares in the energy and mining sector was more than offset by an increase in the manufacturing sector, mainly resulting from domestic merger and acquisition activity. Canadian stock prices were down 1.6% in January.

Canadian investors increase their holdings of foreign securities

Canadian acquisitions of foreign securities totalled $13.3 billion in January, following a record investment of $22.0 billion in December. Acquisitions in January mainly targeted US shares, as in December.

Canadian investment in foreign equities amounted to $11.6 billion, following an investment of $19.8 billion in December. The bulk of the purchases in January were directed to the US market. US stock prices increased by 5.6% in January.

Canadian investors added $1.6 billion of foreign debt securities to their holdings in January. Canadians resumed their acquisitions of US Treasury bonds by adding $3.0 billion to their portfolio, the largest investment since November 2015. A divestment in other foreign bonds moderated the overall investment in the month.

Chart 2  Chart 2: Canadian investment in foreign securities
Canadian investment in foreign securities


  Note to readers

The data series on international transactions in securities covers 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, which are 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.

Next release

Data on Canada's international transactions in securities for February will be released on April 17.

Products

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is also available. This publication will be regularly updated to maintain its relevance.

The updated Canada and the World Statistics Hub – United States (Catalogue number13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the United States using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel, including merchandise trade by Canadian provinces and US states.

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.

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