Foreign investors back in Canadian bond markets

Foreign investors returned to the Canadian bond market in April, retracing much of the selloff that took place in March, according to new data from Statistics Canada.

The national statistical agency reported that offshore investors added $13.5 billion worth of Canadian securities in April, led by $10.4 billion of corporate bonds, followed closely by $8.1 billion in federal government bonds. Foreign investors also added $3.2 billion worth of provincial government bonds.

However, the bond buying was tempered by investors reducing their holdings of Canadian equities by $8.2 billion.

“The decline was due to the retirement of shares of Canadian firms involved in merger and acquisition activities,” StatsCan noted.

The acquisitions of Canadian securities by foreign investors in April followed a large ($19.7 billion) divestment in March, including $11.1 billion worth of federal bonds.

At the same time, Canadian investors added to their holdings of foreign securities for the first time in 2023, acquiring $2.4 billion worth in April — led by $3.5 billion of foreign equities (primarily U.S. equities).

“This activity followed four consecutive months of divestment, totalling $28.2 billion,” StatsCan noted.

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.