Foreign investment levels securities reach near-record proportions

Canadian investors acquired a near-record $13.2 billion worth of foreign securities in April, equally split between bonds and stocks, Statistics Canada reported today.

Investment over the first four months of 2007 has amounted to $39.2 billion, nearly half of the record $78.7 billion invested in 2006.

Meanwhile, non-residents invested $1.5 billion in Canadian securities with April’s investment all in Canadian shares as non-residents reduced their holdings of Canadian debt instruments.

Canadian residents acquired a near-record $7.1 billion worth of foreign bonds in April, adding to a record $16.5 billion invested in the first quarter.

Over half of April’s acquisition ($3.8 billion) was in U.S. government bonds. Another one-third ($2.3 billion) went to buy non-U.S. bonds, half with a term-to-maturity of five years or less.

Canadian residents bought $2.6 billion worth of maple bonds — Canadian dollar-denominated bonds issued by foreign entities — with nearly 85% ($2.2 billion) issued by non-U.S. entities.

While Canadian investors were snapping up maple bonds, foreign investors withdrew Canadian bonds from their portfolios

After a near-record acquisition of $8.9 billion in March, non-residents removed $1.2 billion worth of Canadian bonds from their portfolios in April.

On a sector basis, April’s divestment was concentrated in the federal government sector as non-residents sold $2.4 billion worth. Meanwhile, they continued to invest in federal government enterprise bonds, buying $1.6 billion worth, adding to the $1.1 billion invested in March.