Canada sees “unprecedented” flows from international securities transactions in March

Amid a spike in market volatility, Canadian investors dumped foreign securities in March and offshore investors piled into Canadian securities, Statistics Canada reports.

The economy experienced an “unprecedented” net inflow of funds from international securities transactions in March, StatsCan said.

The net inflow for March reached $70.9 billion, pushing the first quarter total to $119.7 billion, which StatsCan said was “by far the largest amount ever observed since data have been compiled.”

“This activity occurred against the backdrop of rising interest rates and prices and uncertainty related to the global geopolitical situation,” the national statistical agency said.

The record-setting activity came as foreign investors acquired $46.9 billion of Canadian securities in March, and Canadian investors sold $24.0 billion worth of foreign securities in the month.

The hefty foreign investor buying in March pushed the first quarter total to $74.5 billion, compared with $16.1 billion for the same period last year.

Foreign investors added $30.3 billion worth of Canadian bonds in March, largely corporate bonds, and $14.1 billion in stocks.

Conversely, Canadian investors’ pullback in foreign holdings was led by selling $27.6 billion worth of stocks.

“The divestment was mainly in U.S. shares with sales totalling $20.8 billion, notably shares of large capitalization technology firms,” StatsCan said.

The selling in foreign stocks was somewhat offset by the addition of $3.6 billion of foreign debt, led by purchases of U.S. government and corporate bonds.

StatsCan said that Canadian divestment of foreign securities in the first quarter totalled $45.3 billion.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.