Foreign investors bought $46.6 billion worth of Canadian securities in October, the highest level of investment since March 2022, according to Statistics Canada.
The activity was led by foreign purchases of debt securities ($34 billion) and equity securities ($12.6 billion). Investment activity has rebounded since July, as non-resident investors bought $126.9 billion worth of Canadian securities, mostly bonds. This reflected a reversal from a general divestment pattern observed in the first half of the year, when foreign investors reduced their holdings of Canadian securities by $22.4 billion.
As a result, international transactions in securities generated a net inflow of $58.2 billion in the Canadian economy in the month, the highest net inflow since March 2022.
Meanwhile, Canadian investors reduced their foreign securities holdings by $11.6 billion in October. This was the highest level of divestment since January 2023 and the first month of divestment in eight months.
Canadian investors divested from both equity and debt foreign securities, mainly U.S. instruments, in the month. They sold $6.1 billion in foreign shares. Sales of U.S. shares (-$6.6 billion) were slightly moderated by purchases of non-U.S. shares ($0.4 billion). The divestment in U.S. shares in October followed strong acquisitions in August ($16 billion) and September ($10 billion).
Canadian investors divested $5.4 billion in foreign debt securities in October, mainly in U.S. government bonds (-$6.9 billion). At the same time, Canadians increased their holdings of U.S. government paper by $0.6 billion.