Canada’s International Transactions In Securities, June 2015

August 17, 2015 Share Print 0

Foreign investors added $8.5 billion of Canadian securities to their holdings in June, following a $5.5 billion divestment in May. At the same time, Canadian investors acquired $8.6 billion of foreign securities, all non-US instruments.

In the second quarter, Canada’s international transactions in securities generated a net outflow of funds from the economy of $4.4 billion, as Canadian investors placed more funds abroad than foreign investors placed in Canada.

The remainder of the divestment activity was retirements of private corporate bonds. Foreign investment in federal government and government business enterprise bonds moderated the overall divestment over the month. Canadian short-term interest rates were down by 5 basis points in June, while long-term rates were up by 10 basis points. The Canadian dollar depreciated slightly against its US counterpart in June.

Foreign acquisitions of Canadian shares amounted to $5.3 billion in June and almost completely offset the divestment recorded in May. The Canadian stock market, as measured by the Standard and Poor’s / Toronto Stock Exchange composite index, was down by 3.1% at the end of the month.

Canadian acquisitions of foreign securities focus on non-US instruments

Canadian acquisitions of foreign securities reached $8.6 billion in June, led by investment in non-US instruments. On a quarterly basis, Canadian investment in foreign securities amounted to $24.2 billion in the second quarter, the highest such investment in eight years.

Canadian investment in foreign equities was $4.4 billion in June. Canadian purchases of non-US foreign shares amounted to $6.0 billion, the highest such activity since April 2007. A divestment in US shares moderated the overall investment in the month. US stock prices declined by 2.1%.

Canadian investors acquired $4.2 billion of foreign debt securities in June, led by non-US foreign instruments. A decline in Canadian holdings of US Treasury securities partially offset the overall investment in the month. US long-term interest rates were up by 16 basis points in June.

Stats Canada Agency

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Dean Popplewell

Vice-President of Market Analysis at MarketPulse

Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.