Foreign investors acquired $30.1 billion of Canadian securities in November, the largest investment since April 2020. At the same time, Canadian investors increased their holdings of foreign securities by $17.5 billion, led by purchases of US shares.
As a result, international transactions in securities generated a net inflow of funds of $12.6 billion in the Canadian economy in November.
Chart 1
Canada’s international transactions in securities
The largest foreign investment in Canadian securities since April 2020
Foreign acquisitions of Canadian securities totalled $30.1 billion in November, the largest investment since April 2020, during the first wave of the COVID-19 pandemic in Canada. In November, foreign investment targeted federal government debt securities, and to a lesser extent, private corporate debt securities. A foreign divestment in Canadian equities moderated the overall acquisition activity in the month.
Foreign investors added $31.4 billion of debt securities to their portfolios in November, up from a $20.4 billion investment in October. This activity mainly reflected purchases of federal government debt securities, both bonds ($8.6 billion) and money market instruments ($6.5 billion). In addition, investors added $9.8 billion of private corporate debt securities to their holdings in November, a seventh consecutive monthly investment, for a total of $87.6 billion. In November, Canadian long-term interest rates rose to the highest level since February 2019. Meanwhile, the Canadian dollar depreciated against the US dollar.
Chart 2 Foreign investment in Canadian debt securities, by sector of issuer
Non-resident investors reduced their overall exposure to the Canadian equity market by $1.3 billion in November, after three consecutive months of investment. The reduction reflected retirements of Canadian portfolio shares resulting from cross-border merger and acquisition activities. Foreign purchases of Canadian shares on the secondary market, led by shares of chartered banks, moderated the overall reduction in the month. Canadian share prices, as measured by the Standard and Poor’s/TSX composite index, were down by 1.8% in November after reaching a record-high level in October.
Canadian investment in foreign securities rebounds
Canadian acquisitions of foreign securities reached $17.5 billion in November, up from a $5.4 billion investment in October and similar to the average investment observed in August and September. The investment activity in November was led by acquisitions of US shares.
Canadian investors added $7.4 billion of US shares to their holdings in November, following an investment of $652 million in October. The activity in November focused on shares of large capitalization technology firms and investment fund shares tracking broad market indices. US stock prices, as measured by the Standard and Poor’s 500 composite index, were down by 0.8% in November. In addition, Canadian investors purchased $4.0 billion of non-US foreign shares, after a divestment of $2.5 billion in October. November’s investment mainly targeted British companies’ shares.
Chart 3 Canadian investment in foreign equity and investment fund shares
Meanwhile, Canadian investors added $6.1 billion of foreign debt securities to their portfolios, mainly in US dollar-denominated instruments. This activity represented the 10th straight month of investment in foreign debt securities for a total of $47.4 billion. Investment in November mainly focused on US corporate bonds ($2.8 billion) and US government bonds ($1.6 billion). In November, Canadian long-term interest rates exceeded their US counterpart with the largest value increase since August 2011.
Chart 4 Canadian investment in foreign bonds
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 international accounts.
Equity and investment fund shares include common and preferred equities, as well as units or shares of investment funds. For the sake of brevity, the terms “shares” and “equity and investment fund shares” have the same meaning.
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 December 2021 will be released on February 17, 2022.
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.
The Canada and the World Statistics Hub (Catalogue number13-609-X) is available online. This product illustrates the nature and extent of Canada’s economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China and Japan.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
