Canadian securities still in high demand from foreign investors as latest stats continue inflow trend
Canadian securities continue to be a strong draw for non-resident investors according to new data from Statistics Canada.
May saw these investors buy $11.2 billion worth of Canadian securities following $12.8 billion acquired in April, but a deeper dive into what they bought shows an overwhelming preference for federal government debt securities.
These investments totalled $16.9 billion including a record-high $11.8 billion investment in government of Canada paper, which was offset by divestment of corporate paper holdings.
Canadian shares to the tune of $4.9 billion in May making a sixth month run of divestment from these securities. May saw the S&P/TSX Composite Index fall 4.9%.
Canadian investors cut back
Meanwhile, Canadian investors reduced their holdings of foreign securities by $2.8 billion in May, flipping their position from April when they invested $2.4 billion.
The biggest pullback in May was in US government debt which at $5.6 billion was the largest divestment of these securities since April 2020. However, this was offset somewhat by investment in US corporate bonds ($1.8 billion) and non-US foreign bonds ($1.1 billion).
Foreign shares were out of favour with Canadian investors, totalling just $231 million compared to April’s $3.5 billion.
Overall, international transactions in securities generated a net inflow of funds of $13.9 billion into the Canadian economy in May.
