Securities inflows resume in October: StatsCan

Foreign investors returned to Canadian markets in October, adding $8.5 billion worth of securities during the month, after a $22.5 billion divestment the previous month, Statistics Canada reports.

The foreign investment activity focused on corporate debt, while investors continued to shed equities, albeit at a slower pace than in September.

Investors added $14.4 billion in Canadian corporate debt securities in October, primarily through new issuances from Canadian chartered banks, StatsCan said.

At the same time, foreign investors cut their holdings of provincial bonds by $5.3 billion, and sold $253 million worth of equities. The modest selling of equities in October followed a $9.0-billion divestment in September.

Activity by Canadian investors also reversed course in October, with investors selling $1.7 billion in foreign securities, after adding $10.4 billion in September.

“The reduction in October was mainly due to sales of U.S. shares and was moderated by acquisitions of foreign bonds,” StatsCan said.

Specifically, investors sold $13.0 billion of foreign equity securities in October, including $11.4 billion worth of U.S. shares.

Through the first 10 months of the year, Canadian investors have sold off $71.9 billion in foreign equities, largely unwinding the $86.2 billion that investors added over the same period in 2021.

The selloff in equities was tempered by continuing acquisitions of foreign bonds by Canadian investors, which remained strong at $10.7 billion in October, down a bit from $12.9 billion in September.

Overall, the return of foreign buying, and the resumption of selling by Canadian investors, combined to generate a net inflow of $10.1 billion to the Canadian economy from cross-border securities transactions. Through the first 10 months, inflows totalled $123.8 billion, StatsCan said.

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.