Canada's international transactions in securities, October 2023
Released: 2023-12-15
Non-resident investors reduced their exposure to Canadian securities by $15.8 billion in October, led by an unprecedented divestment in private corporate debt instruments. Meanwhile, Canadian investors lowered their holdings of foreign securities by $8.2 billion, nearly all of which was in US shares. As a result, international transactions in securities generated a net outflow of funds of $7.6 billion from the Canadian economy in October.
Chart 1
Canada's international transactions in securities
Unprecedented foreign divestment in private corporate debt securities
Foreign investors reduced their holdings of Canadian securities by $15.8 billion in October, the largest divestment since March. A record foreign divestment in Canadian private corporate debt securities was moderated by a sizable investment in Canadian government paper in October.
The divestment in Canadian private corporate debt securities totalled $17.3 billion and was mainly attributable to substantial retirements of both short-term and long-term instruments denominated in US dollars. At the same time, foreign acquisitions of Canadian government paper reached their highest amount since June and were composed of federal government ($3.8 billion) and provincial governments ($2.3 billion) instruments.
Chart 2
Foreign investment in Canadian debt securities, by sector of issuer
Foreign investors reduced their exposure to Canadian equities by $2.0 billion in October, mainly in shares of the banking and the manufacturing industries. The foreign divestment in Canadian shares totalled $42.2 billion from January to October. Canadian equity prices, as measured by the Standard and Poor's (S&P)/Toronto Stock Exchange composite index, decreased by 3.4% in October.
Significant reduction in Canadian holdings of US shares
Canadian investors reduced their holdings of foreign securities by $8.2 billion in October, after four consecutive monthly investments totalling $42.8 billion. The activity in October was led by a divestment in US shares and was moderated by an investment in US debt securities.
Canadian divestment in US shares totalled $8.3 billion in October, the largest amount since March. The activity in October focused on shares of large capitalization US firms. US share prices, as measured by the S&P 500 composite index, were down 2.2% in October.
Chart 3
Canadian investment in foreign equity and investment fund shares
Further, Canadian investors purchased US debt securities in October, adding $1.5 billion of government paper and $1.2 billion of corporate bonds to their holdings. Meanwhile, Canadian investors reduced their exposure to both non-US foreign short-term (-$1.0 billion) and long-term (-$1.0 billion) debt securities, mainly government instruments.
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 November will be released on January 17, 2024.
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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