Foreign investors piled into Canadian securities in April, producing a record net inflow of funds into the economy, according to Statistics Canada.
The national statistical agency reported that foreign buying of Canadian securities reached a record $49.0 billion in April, powered by a surge in debt investment.
At the same time, Canadian investors sold off just $134 million worth of foreign securities in April.
The combination of record foreign buying and modest selling by Canadian investors resulted in a record net inflow of $49.2 billion in April.
In the year to date, the economy has now seen $120 billion worth of portfolio inflows, StatsCan said.
The strong foreign buying of Canadian debt in April came as governments and companies sought financing in the face of the effects of the Covid-19 outbreak.
For instance, the federal government issued $136.8 billion worth of debt in April, and corporations issued a record $25.0 billion of new bonds in foreign markets, StatsCan said.
Amid the jump in issuance activity, foreign investors bought $54.0 billion worth of Canadian debt during the month, more than reversing the $39.1 billion that investors sold throughout the first quarter.
While foreign investors were buying up Canadian debt, they also sold off $4.9 billion worth of Canadian stocks in April.
StatsCan noted that this marked the seventh consecutive month of investors selling equities, despite Canadian equity prices rising by 10.5% in April.
Canadian investors added $4.4 billion worth of U.S. equities in April, after selling $29.2 billion worth in March.
StatsCan noted that Canadian investors focused on index funds and large cap tech stocks.
Canadians also invested $2.3 billion in U.S. corporate bonds in April.
However, investors sold $8.8 billion worth of U.S. Treasuries during the month, as U.S. interest rates dropped sharply in response to the pandemic.