Foreign investment in Canadian securities slowed to $2.2 billion in May, down from $9.1 billion in April and the lowest level so far in 2018, Statistics Canada announced Monday.
Meanwhile, Canadian investors resumed their investment in foreign securities by adding $5.7 billion worth to their holdings, mainly in foreign bonds.
Non-resident investors added $7.3 billion worth Canadian bonds to their portfolios in May, but reduced their holdings of money market and equity instruments. Foreign investors sold $2.8 billion worth of Canadian equities, which was the first divestment of equities in six months.
“Redemptions of Canadian equities held by foreign portfolio investors resulting from merger and acquisition activity accounted for a large proportion of the divestment in the month,” StatsCan says in a news release.
Canadian investors added $8.5 billion in both U.S. and non-U.S. bonds during the month, while also selling $3.5 billion of foreign equities, largely from U.S. investment funds.
Overall, international transactions in securities have generated a net inflow of $4.6 billion through the first five months of 2018, StatsCan says, compared with $72.8 billion for the same period in 2017.