Canada's international transactions in securities, April 2012

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Non-resident investors acquired $10.2 billion of Canadian securities in April, following a divestment in the previous month. Canadian investors' holdings of foreign securities declined $2.7 billion, predominantly in bonds.

Non-residents resume their acquisitions of Canadian debt instruments

Foreign investors acquired $9.0 billion of Canadian bonds in April after a $1.2 billion divestment in March. Foreign acquisitions were led by secondary market purchases of federal bonds, mainly medium-term instruments. New issues of US dollar-denominated bonds by provincial governments and private corporations also contributed to the inflows during the month.

Chart description: Foreign portfolio investment in Canadian securities

CSV version of the chart

Non-resident purchases of Canadian money market securities amounted to $2.1 billion in April and were focused on provincial government paper. This activity followed three straight months of divestment, largely of federal Treasury bills. The inflows in April were moderated by retirements of paper issued by non-financial corporations. Short-term yields in Canada increased 14 basis points during the month.

Foreign investors reduce their holdings of Canadian equities

Non-resident investors sold $941 million of Canadian stocks in April, following two straight months of acquisitions. The divestment in the month was led by secondary market sales of Canadian shares by US residents. Canadian equity markets fell for a second straight month, decreasing 0.8% in April. The Canadian dollar appreciated relative to the US dollar to its highest level since August 2011.

Canadians further reduce their holdings of foreign debt instruments

Canadians divested an additional $2.9 billion of foreign long-term debt securities in April, following a $3.0 billion sale in the first quarter of 2012. The activity in April was concentrated in US government medium-term bonds. The reduction in holdings of US government bonds was the largest since June 2011. US long-term yields fell 20 basis points in April, leading to an interest rate differential in favour of investment in Canada.

Chart description: Canadian portfolio investment in foreign securities

CSV version of the chart

Canadians also removed $388 million from their holdings of foreign money market instruments in April, a sixth straight month of divestment. The reduction was concentrated in European government paper and was partially offset by investment in US government Treasury bills.

Canadian investors acquire foreign stocks at a slower pace

Canadians added $578 million of foreign equities to their portfolio in April, compared with a $6.3 billion purchase in March. The investment was split almost evenly between US and non-US shares. Despite the reduced activity, April marked the 12th straight monthly net investment in non-US foreign stocks by Canadians, a period during which $14.0 billion of these instruments were added to their holdings. US equity markets were down 0.7% in April after four straight months of gains, following a similar pattern in most major foreign stock markets.