Canada's international transactions in securities, April 2023
Released: 2023-06-16
Foreign investors acquired $13.5 billion of Canadian securities in April, following a significant divestment in March. Meanwhile, Canadian investors added $2.4 billion of foreign securities to their holdings, after four consecutive months of reductions. As a result, international transactions in securities generated a net inflow of funds of $11.2 billion into the Canadian economy in April.
Chart 1
Canada's international transactions in securities
Foreign investment in Canadian securities resumes
Foreign investors resumed their acquisitions of Canadian securities as they purchased $13.5 billion in April after divesting $19.7 billion in March. In April, investments from abroad targeted the Canadian bond market and was moderated by a reduction in foreign holdings of equity securities.
Foreign investors acquired $10.4 billion of Canadian private corporate bonds in April, largely as new issuances of foreign currency instruments by chartered banks. Furthermore, they increased their exposure to federal government bonds by $8.1 billion, after a reduction of $11.1 billion in March. They also acquired $3.2 billion of provincial bonds, their largest investment since January 2022. In April 2023, Canadian long-term interest rates edged down, and the Canadian dollar depreciated against the US dollar.
Chart 2
Foreign investment in Canadian debt securities, by sector of issuer
On the other hand, foreign holdings of Canadian equity securities were down by $8.2 billion in April. The decline was due to the retirement of shares of Canadian firms involved in merger and acquisition activities. Foreign purchases of Canadian shares on the secondary market moderated the overall reduction observed in April. Canadian share prices, as measured by the Standard and Poor's/Toronto Stock Exchange composite index, were up in April to reach the highest levels since January 2023.
Canadian investors acquire foreign shares
Canadian investors acquired $2.4 billion of foreign securities in April, the first monthly investment in 2023. Investors added $3.5 billion of foreign shares to their holdings, mostly US shares. This activity followed four consecutive months of divestment, totalling $28.2 billion. US share prices, as measured by the Standard and Poor's 500 composite index, were up by 1.5% in April. The overall investment in foreign securities was moderated by sales of US government bonds (-$2.4 billion). In April, US long-term interest rates fell to the lowest levels since August 2022.
Chart 3
Canadian investment in foreign equity and investment fund shares
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. These 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 May will be released on July 17.
Products
The Canada and the World Statistics Hub (13-609-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.
As a complement to this release, the data visualization product "Securities statistics," part of the series Statistics Canada – Data Visualization Products (71-607-X), is available online.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
Contact information
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