Canadian investors dump US equities, other foreign shares
Foreign investors were snapping up Canadian federal and provincial government bonds in January with more than $18 billion invested, the largest monthly investment on record.
Overall, non-resident investors increased their exposure to Canadian bonds by $33.5 billion, the highest investment since April 2020, Statistics Canada reported Monday. They also added $15.4 billion of corporate bonds to their holdings, the largest investment since April 2022.
The acquisition of Canadian bonds in January followed divestment in December that was centred on Canadian government enterprise bonds.
However, they pulled back sharply on money market instruments, reducing their exposure by almost $19 billion. They also cut $6.6 billion from their holdings of Canadian shares, mostly due to retirement of shares from M&A activity and sales on secondary markets. The TSX/S&P Composite Index was up 3.3% in January.
In total, foreign acquisitions of Canadian securities totalled $7.9 billion in January.
Canadian investors eased back on foreign securities, reducing their exposure by $3.2 billion and selling $17.6 billion of foreign shares, the largest pullback in almost three years. This included $15.6 billion of US shares divested, along with $1.9 billion of non-US shares.
Canadians added $14.4 billion of foreign debt securities, focused on $15.1 billion of bonds including $6.7 billion US bonds, while cutting US government money market instruments by $1.4 billion.
Total international transactions in securities generated a net inflow of funds of $11.1 billion to the Canadian economy in January 2025.
