Foreign investors flocked back into Canadian securities in October.
“Surprisingly, in a month when the Canadian dollar set a new record low and interest rates traded in a tight range until the last few days, foreigners pumped up their net holdings of Canadian securities by $13.5 billion,” says BMO Nesbitt Burns.
The firm notes that the month’s net foreign investment in October more than offset the upwardly revised $8.7 billion divestment in September.
Most of the buying was in U.S. dollar-denominated corporate bonds, reflecting record issuance by Canadian firms in international markets, it says. Year-to-date, foreigners have purchased $31.4 billion of Canadian bonds, a small fraction of which is denominated in Canadian dollars. Foreigner investors also shed $2.1 billion of Canadian stocks, slashing the net investment this year to just $1.6 billion.
At the same time, Canadians reduced their holdings of foreign stocks and bonds by $3.4 billion. “Although investment in foreign bonds is down for the year thus far, Canadians are still on pace to have the second largest net investment abroad on record,” it says.
Foreign investors snap up Canadian securities in October
U.S. dollar denominated bonds prove popular
- By: James Langton
- December 21, 2001 December 21, 2001
- 15:25