Foreign investors piled into Canadian debt in June, pushing second quarter investment past the $100-billion mark, according to new data from Statistics Canada.
In a new report, the national statistical agency revealed that foreign investors added $40.8 billion worth of Canadian securities in June — primarily into bonds — which pushed the total inflow from foreign investors to a record $100.6 billion for the second quarter.
In June, offshore investors acquired $39.9 billion of Canadian debt securities, led by $25.4 billion into federal government debt securities, and $16.2 billion into corporate bonds.
For the first six months of the year, investors snapped up a record $175 billion worth of debt securities — including $80 billion in federal debt — up from $20.9 billion in the same period last year.
Alongside the surge in federal debt acquisitions, foreign investors also added $901 million in Canadian equities in June, Statistics Canada reported.
By sector, the manufacturing industry was the primary target for foreign investor inflows, it noted.
“These acquisitions were moderated by a divestment in shares from the trade and transportation as well as the finance and insurance sectors,” Statistics Canada noted.
Foreign investor buying of Canadian securities outpaced flows in the opposite direction.
In June, Canadian investors added $35.4 billion worth of foreign securities, led by a $23.5-billion flow into U.S. equities — primarily large cap tech stocks.
For the first half, investors added a record $78.1 billion of U.S. equities — more than double the $35.1 billion that went into U.S. stocks in the same period last year, Statistics Canada noted.
Canadian investors also put $5.3 billion into foreign bonds in June, led by U.S. corporate bond buying, which was partly offset by $9.9-billion divestment from U.S. federal government bonds.
Overall, international securities transaction activity generated a net inflow of $5.4 billion into the Canadian economy in June. For the second quarter, a total of $55.1 billion flowed into the economy from securities activity.