Meanwhile, foreign investors add $11 billion to Canadian securities exposure
Canadian investors hit the brakes on their investments in foreign securities in July, the latest month of data reported by Statistics Canada.
The $4.5 billion acquired by Canadians was a sharp slowdown from the previous month’s $16.4 billion investment and impacted both foreign debt securities and shares.
There was a stronger interest in US government bonds with Canadians increasing their holdings by $2.1 billion in July compared to $0.7 billion in June, continuing the high level of demand for these securities in 2024 with a total $24.6 billion acquired year-to-date compared to just $2.3 billion during the same period of 2023.
Canadians pulled back from money market bonds though, reducing holdings by around $2.4 billion, roughly the amount they had invested in the previous month, mostly as they cut exposure to the Japanese yen.
There was also a change of heart regarding US equities with Canadians decreasing acquisitions to $6.4 billion in July from $12.5 billion in June, reflecting the softer S%P 500. Overall, Canadian acquisitions of foreign shares decreased from $10.0 billion in June to $2.1 billion in July.
Foreign investors load up
Meanwhile, foreign investors added $11 billion to their exposure to Canadian securities in July.
This was a large jump from the $5.2 billion in June and was driven by $9.1 billion in Canadian debt securities, mostly federal government debt securities ($8.8. billion) especially bonds (+$6.5 billion), bringing their investment in federal government bonds to $59.4 billion so far in 2024, compared with $12.5 billion over the same period in 2023.
They also added $6.9 billion in Canadian private corporate bonds, and shares totalling $1.9 billion after two consecutive months of divestment.
