Investors fled Canadian securities in September: StatsCan

Foreign investors slashed their holdings of Canadian stocks and bonds in September, according to new data from Statistics Canada.

Overall, investor portfolio moves produced a $31.8-billion outflow from the economy in September, as Canadian investors added $9.6 billion worth of foreign securities, and foreign investors dumped $22.3 billion of Canadian securities.

The selloff of Canadian securities represented the largest monthly divestment since December 2018, but also came on the heels of two months of strong foreign buying. In the two previous months foreign investors had added a total $41.8 billion of Canadian securities.

StatsCan reported that the foreign selling was led by an “unprecedented” $15.0 billion divestment of federal government debt, and $8.9 billion worth of selling in Canadian equities, primarily bank stocks ($7.7 billion).

Foreign investors also acquired $3.2 billion in corporate debt.

At the same time, Canadian investors added a record $12.9 billion in foreign bonds in September, primarily government securities.

Investors also reduced their holdings of foreign equities by $1.4 billion, which represented the fifth consecutive monthly divestment.

Despite the large outflow in September, the balance of international transactions in securities remain slightly positive for the third quarter, at $7.3 billion.

And, through the first nine months, there was a net inflow of $119.9 billion due to cross-border portfolio activity.

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.