Foreign investors snapped up Canadian government bonds at a record level in April, driving a $46.9 billion total acquisition of Canadian securities during the month, according to new data from Statistics Canada.
Acquisitions of both Canadian government bonds in general, and federal government bonds specifically, hit record heights in April — with foreign investors adding $38.5 billion, and $27.7 billion, of those kinds of assets, respectively.
“While U.S. investors were the main contributor to the investment activity in federal bonds in April, increased purchases from Asian and European investors also contributed,” Statistics Canada noted.
Alongside the strong demand for federal bonds, foreign investors also added $10.6 billion worth of provincial government bonds and $10.2 billion of corporate bonds in the month.
Investors also acquired $5.6 billion worth of Canadian equities in the month, but pulled $7.4 billion from money market instruments.
“The divestment in April largely targeted private corporate paper and was moderated by acquisitions of federal government paper,” Statistics Canada said.
On the equity side, foreign investors primarily targeted the energy and mining sectors, adding $5.3 billion in those segments.
Through the first four months of the year, foreign investors have added a total $104 billion worth of Canadian securities, Statistics Canada said.
While foreign investors were adding Canadian securities to their portfolios in April, domestic investors were selling their offshore holdings, reducing their foreign securities exposure by $11.4 billion in the month.
Investors sold $8.4 billion worth of foreign bonds and $3 billion in foreign equities — led by a $1.6-billion divestment of U.S. shares, primarily in large cap tech stocks.
The combination of strong buying by foreign investors, and Canadian investors selling foreign assets, resulted in a net inflow of $58.3 billion to the Canadian economy in April, Statistics Canada said.
Source link