Foreign investors in C$ rises by $29.3B vs $10.33B last month (revised from $9.97B)

• Foreign investors increased their exposure to Canadian securities by $29.3 billion in September (largest investment since April) vs 10.33 prior month (revised from 9.97B..
• Canadian acquisitions of foreign securities slowed to $4.14 billion in September (down from $12.3 billion in August).
• International transactions in securities generated a net inflow of $25.2 billion in the Canadian economy in September.
• Total net inflow for the third quarter amounted to $30.6 billion.

Details:

Canadian debt securities:

• Foreign acquisitions totaled $14.7 billion, mostly in bonds.
• Year-to-date bond acquisitions reached $172.0 billion in 2024 (up from $61.9 billion in 2023).

Private corporate bonds:

• Foreign investors added $10.1 billion in September, mainly in new bonds by financial institutions denominated in foreign currencies.
• Federal government bond holdings increased by $2.7 billion (lowest monthly investment in 2024).

Canadian shares:

• Non-residents invested $14.6 billion in Canadian shares in September (largest since December 2021).
• Investment followed a divestment of $11.9 billion in August.
• Year-to-date foreign divestment in Canadian shares totaled $9.7 billion (down from $40.7 billion in 2023).

• Market performance:

  • Canadian share prices (S&P/TSX composite index) increased by 2.8% in September.

Foreign securities acquisition slowed:

• Canadian investors acquired $4.1 billion of foreign securities in September (down from $12.3 billion in August).

Foreign debt securities:

• Added $4.4 billion to holdings, including $6.6 billion in bonds.
• US government bond investment totaled $3.5 billion (rebounding from a $3.9 billion divestment in August).

Foreign shares:

• Reduced exposure by $296 million in September (after a $15.5 billion investment in August).
• US equity holdings decreased by $1.2 billion (following a $12.7 billion investment in August).

Market performance:

• US share prices (S&P 500 composite index) increased by 2.0% in September.

Bank of Canada reduced its policy rate to 4.25% in September (down from 4.5%). Policy rate has been reduced by 75 basis points since January.

This article was written by Greg Michalowski at www.forexlive.com.