Investors returned to foreign stocks in November: StatsCan

Cross-border securities activity picked up in November, resulting in a net outflow of $1.4 billion from the Canadian economy due to international securities transactions, Statistics Canada reports.

The national statistical agency said the foreign investment in Canadian securities rose to $12.8 billion in the month, up from $9.1 billion in October.

At the same time, Canadian investors added $14.1 billion worth of foreign securities in November, which was the largest total since April 2022, following a $1.7-billion divestment in October.

In particular, Canadian investors resumed buying foreign stocks in November. Investors added $9.9 billion worth of foreign equities during the month, led by $5.8 billion in U.S. stocks. Those purchases followed $29.9 billion in divestments over the previous six months.

With equity buying on the rise, investors’ appetite for foreign debt securities cooled, with $4.3 billion added in November, down from $10.7 billion in October.

Foreign investors, for their part, ramped up their buying of Canadian equities in November, adding $3.5 billion worth during the month. StatsCan said this marked the largest investment in stocks since March 2022.

“Foreign acquisitions of shares of the banking sector were moderated by a divestment in shares of the manufacturing sector,” it noted.

Additionally, foreign investors increased their holdings of federal government debt, adding $5.0 billion in bonds and $2.1 billion worth of money market instruments.

“The foreign investment in federal government paper followed seven consecutive months of divestment that totalled $32.1 billion,” StatsCan said.

With equity and government bond purchases on the rise, acquisitions of Canadian corporate debt dropped in November, slowing to $2.5 billion from $14.4 billion in October. This was the lowest monthly investment since July 2021.

Staff

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