International transactions in securities generated a net inflow of funds of $6.1 billion in the Canadian economy in May to total $34.2 billion in the first five months of 2019, reported Statistics Canada on Tuesday.
The federal agency said foreign investors acquired $10.2 billion of Canadian securities in May, following two months of divestment. At the same time, Canadian investment in foreign securities resumed to reach $4.1 billion, led by purchases of U.S. corporate bonds.
“Non-resident investors added $12.9 billion of Canadian bonds to their portfolio in May. Foreign investment in federal government bonds reached $8.8 billion, mainly secondary market purchases of Canadian dollar-denominated instruments. This was the first monthly investment in these instruments in four months. In addition, non-resident investors added $3.9 billion of federal government business enterprises bonds to their holdings,” said StatsCan.
“Non-resident investors resumed their acquisitions of Canadian money market instruments by adding $1.9 billion to their holdings in May, following three straight months of divestment. Foreign acquisitions of private corporate paper were moderated by a divestment in government of Canada paper during the month.”
It said Canadian investors resumed their acquisitions of foreign securities with purchases totalling $4.1 billion in May, following a $189-million divestment in April.
“Canadian acquisitions of foreign debt securities totalled $6.0 billion in May. The activity was led by purchases of foreign bonds, as investors mainly added U.S. corporate bonds and non-U.S. foreign bonds to their holdings. Canadian pension funds were the main contributors to these purchases in the month. U.S. long-term interest rates decreased for a seventh straight month in May,” said Statistics Canada.
“Canadian investors reduced their holdings of foreign equities by $1.9 billion in May. Sales of non-U.S. shares were moderated by purchases of U.S. shares. This was the first monthly investment in U.S. shares following six straight months during which investors reduced their exposure to this market. The U.S. stock market decreased by 6.6 per cent in May.”